With more budget cuts looming, the Arizona State Land Department has made significant changes to its Tucson office.

"We've had to reduce the size of the staff," said Jamie Hogue, assistant state land commissioner.

The cuts represent a 50 percent reduction of the Tucson office. There were eight employees in Tucson; now four remain. Of those, three were laid off and one took an early retirement.

Statewide, the department had 172.9 employees at the beginning of fiscal 2009. The land department implemented a hiring freeze earlier this year and later eliminated 32.4 positions, a 21 percent reduction in force. The state filled eight of those positions.

Hogue wrote in an e-mail to The Explorer that after the Legislature approves a state budget, "the department anticipates that even under the best case scenarios, we may need to eliminate an additional four vacant positions."

The department, which manages more than 9 million acres, has 136.5 remaining positions as of this writing.

Until recently, the state land department was riding high on a string of banner revenue years. But the cuts exemplify a reversal of fortunes that has reverberated throughout the state.

The prosperity of the land department, like much the state, is largely linked to real estate and development. During the recent boom, with developments cropping up across Arizona, demand for department holdings was strong. In fiscal 2002, the department earned about $150 million for the trust beneficiaries ā€” mostly state schools. By fiscal 2008, the department took in more than $330 million through land sales, ranching leases and natural resource agreements.

In April 2007, the department sold a 269-acre parcel to Rightpath Limited in Maricopa County for nearly $150 million. The transaction ranked as the department's most lucrative sale in its more than 90-year history. The department also sold numerous other properties in the same area dating back to 2004, where thousands of homes today stand and more than 7,000 houses, condos and apartments were planned.

By mid-2008, numerous developers that had signed on to build in the area defaulted on loans and pulled out of the project. The state land department took back more than 1,000-acres from developers, among them Rightpath's 269-acre plot and a 500-acre property Pulte Homes bought in a joint venture with another developer.

In the wake of the cutbacks, department officials intend to refine the scope of the agency's activities, limited largely to managing its current holdings and working only on the projects that hold the promise of immediate revenue.

"Our focus has become more narrowly focused to revenue generation," Hogue said.

For now, the department's more remote holdings likely may remain undeveloped. That includes the 14-square mile section of state land north of Oro Valley called Arroyo Grande.

"From our perspective, we see the development that project put off for a few years," Hogue said.

State and Oro Valley officials have been in negotiations for the annexation of the property for nearly two years. Last November, the town approved a general plan amendment that included land use designations for the area, paving the way for full annexation.

The two parties also had made strides in negotiations over a proposed wildlife corridor and vast tracts of open space in Arroyo Grande. Those discussions were seen as significant because of the strict constitutional mandates under which the department operates. In part, those orders include maximizing the profitability of its holdings.

"The extent of natural open space was certainly new," Hogue said.

In the past that usually meant that the entirety of acreage sold was priced as if it were developable. In Arroyo Grande, 68 percent was slated for conservation ā€” a designation not directly associated with revenue generation and lacking constitutional definition.

Hogue said the department considers Arroyo Grande active and would continue to work behind the scenes on the project. Much of that work likely would involve planning for future annexations and land auctions.

"We've got to make sure that whatever we do is economically viable," Hogue said.

New state land commissioner

In June, former Phoenix City Council member Maria Baier was named commissioner of the Arizona State Land Department.

Baier was elected to the Phoenix City Council in 2007. She also served as the City of Phoenix representative on the League of Arizona Cities and Towns, and on the Maricopa Association of Governments Transportation Policy Committee.

Baier is an active member of the Arizona State Bar and a volunteer on numerous state boards and commissions, including the Trust for Public Land Arizona Advisory Board, Great Hearts Academies Board of Directors, Valley Partnership Board of Directors, Agricultural Protection Commission and Central Arizona Partnership Board of Directors.

She received her bachelor's degree from Arizona State University and a law degree from the James E. Rogers College of Law at the University of Arizona.

Baier resides in Phoenix with her husband Chris and their two daughters.

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