June 29, 2005 - Oro Valley will spend $4.7 million on land for a new municipal service center, according to a tentative agreement announced June 24.

The agreement was negotiated on behalf of the town by Councilman Terry Parish and Town Manager Chuck Sweet with representatives of Meritage Homes, formerly Monterey Homes, as a condemnation lawsuit involving the property worked its way through Pima County Superior Court.

The 24-acre site is located in Rancho Vistoso, South of Rancho Vistoso Boulevard and east of Innovation Park Drive.

Meritage Homes was in the process of readying the site for home construction when the town moved to take the land through eminent domain.

The Oro Valley Town Council unanimously approved a resolution Sept. 15 to acquire, either through purchase or condemnation the land needed to move the public works yard and other town facilities to the bigger location.

The town already paid $3.8 million of the total $4,725,000 to Meritage Homes when it was granted immediate possession of the land by Superior Court Judge John F. Kelly in January. In the 2005-06 tentative budget, $6 million is allocated for buying the land and beginning to build on the site, according to the town's Finance Director David Andrews. Andrews said that the town plans to do a master plan of the site and that some buildings will be constructed as soon as possible, but that there will be land left to build on it in the future.

The budget is scheduled to be adopted in July. The council is scheduled to vote on whether to accept the land agreement at the July 6 council meeting.

Parish said he is pleased with the tentative agreement.

"I'm impressed with (Meritage Homes President) Jeff Grobstein and Meritage Homes and their willingness to negotiate at a fair price," he said. "It's been a tough experience but very positive. I am glad we were able to form a partnership between Meritage Homes and Oro Valley."

Parish said negotiations were "tough," particularly at the beginning, because while he and town staff were trying to look out for the best interests of the town by negotiating a low price Grobstein was trying to look out for his company by getting the best price for land that he will no longer be able to use for building homes that would sell for top dollar in a hot market.

Meritage Homes had disputed the amount the town was willing to pay to acquire the land when the condemnation was first announced. While not giving a figure of his own, Grobstein said at the time that the company spent money grading the property and installing a sewer system to prepare the area for a large housing development overlooking the Santa Catalinas, two activities that increased its value.

"It's hard to take somebody's land and make them happy about it," Parish said. "But instead of being angry about it, they (Meritage Homes representatives) sat down with us and decided to partner with us."

The result, Parish said, is that the town will have to spend less time and money on litigation. With a budget to adopt, a general plan yet to be ratified by voters, and several historic preservation projects in the works, he said he is glad the town staff and the council will be able to know this looming matter is resolved.

Also, as land values continue to escalate in Oro Valley, locking in a price for the land now likely saved the town money because the litigation could have dragged through the courts for a long time, he said.

According to information provided by Governmental and Community Affairs Administrator Bob Kovitz, the town will use the site as its operation center, moving the public works, water utility and transit staff and equipment to new buildings on the property. According to Kovitz, there will still be 17 acres of land available at the site after those departments are moved, and the town council will decide any other future uses.

Representatives from Meritage Homes could not be reached for comment regarding the agreement, but Kovitz stated that the "positive relationship" created through the agreement will "serve everyone well if Meritage should wish to purchase and develop other land in Oro Valley."

The town looked for land on which to build a new operations center for more than three years before settling on the Meritage Homes site.

When the town first located is operations facilities at 680 W. Calle Concordia in 1978, Oro Valley had a few thousand residents and a handful of employees who worked there. But since the town's population has exceeded 40,000 and its employees number nearly 400, the operations center has overflowed, according to many of the people who work there.

Today, the town's old town hall and smaller buildings remain on the Calle Concordia site where more than 50 people are employ-ed. As many as 100 vehicles, including those of employees and the town, as well as 14 pieces of heavy machinery also occupy the site at various times.

The town was sued by a group of residents with homes near the Calle Concordia property, led by Stephen and Celta Sheppard, who believe that the facilities are too noisy and dirty to be in a community with homes surrounding them and that the value of their properties is diminished by the close proximity of the yard. The residents lost their suit when a Superior Court judge ruled that the town has the right to build its facilities where it sees fit and does not have to abide by its zoning codes.

The court ruled that the Sheppards' case failed to prove an existence of a nuisance and supported the town in arguing that the facilities are "critical" to its operation and that an injunction would significantly reduce its ability to conduct business.

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