Land in Fountain Hills fetches $110 million bid
Information for Sellers

Tatiana Hensley
The Arizona Republic
Mar. 16, 2007 12:00 AM

Two square miles of Fountain Hills sold Thursday for $110.1 million, the second-most-expensive piece of state trust land ever auctioned by the Arizona State Land Department.

The Ellman Cos. placed the winning bid, making the Phoenix firm one of the biggest land developers in the northeast Valley.

"We have a sizable investment in the Fountain Hills area already," said Don Kile, president of the Preserve at Goldfield Ranch, an Ellman subsidiary where as many as 1,000 homes are planned on 2,200 acres east of the Fort McDowell Reservation.

"We are pleased with the purchase price. I think it is an indicative of the value. We are proud to add this (land) to our portfolio," said Kile, whose land in Fountain Hills could sprout as many as 1,750 houses.

The largest state trust land sale in Arizona history was in August 2005, when Toll Brothers and Pulte Homes bought a 502-acre Desert Ridge property in north Phoenix for $135 million.

Among the five registered bidders on Thursday, three dropped out without submitting a bid: Toll Brothers, Cherry Street Station and SCC Acquisitions.

That left Ellman to compete against Pivotal Fountain Hills.

The Fountain Hills trust land was estimated by the department at $95 million, down from the previous estimate of $130 million for an auction that was canceled in September because of low interest. A stagnant Valley housing market has led to an abundance of homes for sale and less interest in developing new housing tracts.

State Land Commissioner Mark Winkleman said that for well-located properties there are still buyers.

"There has been a lot of publicity about how bad the real estate market has become," he said. "When you look at the last three auctions that we've had - starting with the one in Apache Junction, then one month ago in Peoria, and today - we have a group that steps up and pays $110 million. What that shows is that the market has slowed, but it is not dead."