Apache Junction: Candidates Propose Solutions (video embedded).

It may take a while for investors to get excited about unimproved state trust land in Apache Junction.

It might also be the right time to chat with this year’s M.R.E.D. candidates.

The cohorts competed last Friday in a mock-auction at the Arizona State Land Department to purchase approx. 160 raw acres at the intersection of Idaho Rd and U.S. 60.

For a fourth year in a row, the collaborative “Synthesis 1” assignment required the students to identify the highest and best use of aggregated parcels, navigate entitlement challenges, and determine a competitive bidding strategy.

Each of the five teams was required to make at least one bid, which opened at $4.5 million and climbed in $100k increments.

Following the auction, each team presented their detailed analysis and proposals for the site, and endured on-the-spot inquiry from faculty, alumni, and industry professionals.

There were very few softball questions as the site bore several challenges like utility and flood district easements, and conflicting land designations.

The groups almost unanimously proposed master-planned single and multi-family residential communities, several with specific land designations for commercial uses that ranged from a hotel to private education.

Taylor Wall raised the winning paddle on behalf of his teammates to secure the land at $6.5 million (approx. $40.6k/acre), which he said was about $300k under the team’s pre-determined ceiling.

“It was interesting that everyone had a different way of doing things,” Wall said after the auction.

He and teammates Molly Jackson, Josh Schripsema, and Will Greene proposed a top tier charter school they said could draw students from up to 15 miles away.

“We have an opportunity to exploit the potential of struggling schools (in the area)” Shripshema told his professors.

Wall and competitor Alex Vanderhout went toe-to-toe in bidding for about 4 rounds after the other teams bowed out.

It was unclear for several minutes who would out-wager the other.

“We had a creative financing strategy that allowed us to hold the land for 5 years,” Jackson explained after the auction.

Vanderhout seceded after $6.4 million.

“When I saw the (winning) bid I was thinking to myself, ‘are we talking about the same parcel?” said Max Masel of the Arizona State Land Department. “We had no specific expectations, but we have had offers.”

Masel emphasized the unique position ASLD plays as a government entity and landowner.

“We don’t pay taxes or (conventional) carrying costs,” he explained. “We don’t liquidate the trust because there’s a glitch in the market.”

ASLD owns thousands of acres in the far-east valley on behalf of Arizona citizens.

“In theory (the public auction) is the most realistic way to find out what the market value of land is,” said Mark Stapp, M.R.E.D. program director. “This problem caused these guys to think ‘what can I do with this land?”

Collectively, the groups presented data reflecting an area median income between $30k and $42k per year.

Unemployment was higher than the valley average, and there were fewer college graduates.

Several groups reported area absorption for homes around 8/month.

There were no direct comparisons for multifamily presented Friday, but several pointed to the expanse of the Phoenix multi-family market in the last two years as evidence of potential.

“We needed to give people a reason to drive out to Apache Junction,” said Denise Christensen, a Global Business grad from A.S.U. “We had to create place.”

Christensen recently began working with infill developer Tim Sprague of Habitat-Metro.

She and teammates Reid Mossman and Cameron Hildreth proposed a community anchored by a “corporate college,” what they described as a hybrid office complex/trade school where professional receive on-the-job training and certification.

“I think just about every group asked if they could buy and hold,” she said during a class discussion after the presentations.

The assignment did not allow the students to walk away from the deal, but instead required them to justify what they would pay and why.

“It was such a specific site, and required us to check off (a list) of the things we were learning in class,” said Jason Certilman, an architecture grad from ASU.

“It’s important to be literate in all the different areas,” agreed Kira Kramlich, who graduated with a degree in history from Bates College in Maine.

The candidates will prepare individual “Synthesis 2” development proposals for a Phoenix infill site in February.

Alumni are encouraged to attend.