A Surprise Sale

The auction of a downtown parcel of land shocks some artists

A tattered Safeway bag skips across the parched lot before clinging to a chunk of jagged concrete. Nearby, traffic bumps across the railroad tracks on Sixth Street before idling at a stoplight near the Stone Avenue underpass.

As downtown properties go, this dusty parcel easily goes unnoticed. So did its recent sale to a Tucson investment partnership, which placed a winning bid right under the noses of a downtown arts group.

This lot is among six or seven properties in the old Warehouse District being sold by the Arizona Department of Transportation, which acquired them in the 1980s as right of way for a road that has yet to be built.

Downtown artists have hoped to incorporate this and other parcels into a thriving arts community with affordable studios. That's why the folks with the Warehouse Arts Management Organization were a bit startled when they recently learned that this spot next to the Steinfeld Warehouse had been snapped up in an ADOT auction by the Fenton Investment Co. and Town West Realty.

Their surprise is understandable, considering that the auction wasn't advertised in any Tucson newspapers. Instead, notice appeared only on ADOT's website and in The Arizona Republic, which primarily serves the Phoenix metropolitan area.

State Transportation Department staffers defend their move, calling the Republic a "general circulation" newspaper covering most of the state. But as one city official here puts it, "no one in Tucson reads The Arizona Republic."

In any case, folks missed the notice that a bid had been placed on the property, opening a 30-day window during which a second bid prompted an auction and the eventual sale.

And so goes one more pillar from the Tucson Historic Warehouse Arts District Master Plan. Developed by the city in 2004, it was meant to guide development of this area as an artists' enclave. Instead, the dream of a larger arts district has grown ever more elusive.

The recent sale sparked consternation within WAMO. While the nonprofit group wasn't necessarily prepared to place its own bid on the parcel, "had we known there was movement on it, we may have had a more serious conversation, or let others know that there was movement on it," says board president Elizabeth Burden. "Our mission is to preserve and protect the spaces in the district for arts uses. ... We may have encouraged other artists or arts organizations that are looking for space in the area to have looked into it."

Burden says it's a matter of the state "not doing its due diligence" by giving public notice of the sale locally.

The bidding was likely sparked by recent ADOT appraisals marking down Warehouse District properties. While the parcel—ranging from 12,000 to 17,000 square feet in various state valuations—previously had an asking price of $256,000, an appraisal earlier this year pegged its value at $100,000. That reappraisal sparked immediate interest; there were soon two bids, and the property ultimately sold for $125,000.

Obtaining that information was the easy part. Far tougher was simply interviewing department staff members, since ADOT officials attempt to block reporters from contacting staff members directly. Instead, public information officers act as gatekeepers.

After going through two PIOs, I was finally able to interview Raul Torres, who heads ADOT's property-management section. He defends the practice of only placing an auction ad in the Phoenix paper, saying that WAMO is familiar with the policy and with ADOT's website.

Still, Tucsonans might be excused for finding this a bit confusing, since less than two years ago, ADOT did advertise an auction of several Warehouse District properties in a Tucson paper. Torres calls it an exception. "That was a general auction with multiple properties," he says. "The actual (advertisements) for bids go in The Arizona Republic."

Still, WAMO isn't alone in questioning why a Tucson auction would appear only in a Phoenix paper. "If that's the only form of notification, it's a little bit questionable," says Tim Murphy, program coordinator for the city's Real Estate Division.

Reasons aside, this missed opportunity perhaps symbolizes the cross-purposes and a lack of coordination between ADOT and the city over the Warehouse Arts District Master Plan, which emphasizes the development of an arts enclave. According to Torres, the arts concept plays no role in how ADOT properties are dispatched. "It's just the highest bidder, sir," he says. "We don't get involved in that. ... We're leasing them to various tenants, including artists, for various purposes. We've been doing that over the last 20 years. But our mission isn't to own property. It's to build freeways."

True enough, says Murphy. "The city doesn't really have any ability to facilitate what ADOT is going to do with their surplus properties. It's really kind of private-sector-driven. The city did try to acquire as many properties from ADOT as possible within the Warehouse District, so that we could have more control over those assets. But because of the city's funding shortfall, we were only able to acquire three properties."

Those holdings include the Steinfeld building, and two others on Toole Avenue. The city also controls several Warehouse District buildings currently under easement with ADOT. Some may eventually be demolished as part of the Downtown Links project, which will connect the Barraza-Aviation Parkway with Interstate 10.

Plans for the recently sold lot are also uncertain, says Toby Horvath, a property manager with Town West. But buzz in business circles is that the Fenton/Town West partnership may look to build student housing on the site.

Either way, the property's arts-related future remains in doubt. And that's what worries folks like Susan Gamble, a WAMO board member who owns Santa Theresa Tile Works in the Warehouse District.

Gamble sees plenty of looming complications to WAMO's goal of creating a wider arts district. One is the new city-county courthouse planned near the junction of Toole and Stone avenues. "If you've got property there, and you're getting really low rents from artists, and something comes along that puts attorneys in there who pay a lot higher rents, that's fair," she says. "It's just been a window that we haven't really been able to secure, to keep as much (affordable) property as we can."

She predicts that property values will begin to rise. "And when that happens, the artists will leave, and a few more years down the road, we'll be like all the other major cities that didn't protect space for artists: It will become gentrified, and everyone will move out."

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