Arizona Revised Statutes
Title 37 - Public Lands
§ 37-335 - Sale or lease of state lands for development

37-335. Sale or lease of state lands for development
A. On approval of the development or secondary plan, the commissioner may reclassify the lands consistent with the plan. The existing lessee is entitled to compensation as provided by this chapter.
B. Upon the reclassification of state lands, the existing lessee shall be given notice of this reclassification and of the lessee's rights as provided in section 37-290, subsections A and C.
C. Upon the cancellation of a lease due to a reclassification of state lands under subsection A of this section, the existing lessee shall have a preferred right to lease the reclassified land by offering a bid that matches the highest and best bid received by the commissioner for the reclassified land at public auction. The highest bidder may offer one subsequent bid that exceeds the bid of the existing lessee, but the existing lessee has the right to match the final bid. If the existing lessee is not successful in obtaining the reclassified lease, or if the existing lessee chooses not to exercise the preferred right specified in this subsection, the existing lessee is eligible for compensation and reimbursement as provided in section 37-335.01. The preferred right described in this section is subject to the requirements of section 37-291, subsection B, and the preferred right shall expire after the commissioner receives the highest and best bid at public auction. If the commissioner determines that no bid will be accepted, the preferred right to lease the reclassified lease shall remain in effect, subject to any subsequent public auction. The preferred right is not transferrable and can be exercised only by the existing lessee.
D. At least one independent appraisal is required for commercial leases that are offered at public auction if a former lessee has a vested preferred right under subsection C of this section. The commissioner shall require the successful bidder to pay the cost of the appraisal.
E. Following cancellation of a lease due to reclassification, the commissioner may issue an interim use permit for the urban lands reclassified for a term the commissioner deems necessary to protect the income of the trust and this state. For thirty days after cancellation of a lease, the prior lessee has a preferred right to obtain the interim use permit.
F. On determination by the board of appeals that the lands to be developed under this article should be sold, the commissioner shall comply with all publication and other statutory requirements for the sale of state lands. In determining the minimum amount acceptable as a bid, the commissioner shall include the related proportionate part, based on the ratio of lands proposed to be sold to lands covered by the development or secondary plan, of the actual costs incurred by this state in obtaining the development or secondary plan adopted for implementation. All state costs recovered at the time of sale shall be paid to the state general fund.
G. The certificate of purchase or patent shall require the purchaser to honor any covenants and restrictions as deemed necessary by the commissioner to implement the approved development or secondary plan. A breach of any covenant or restriction results in the reversion of all rights, title and interests in the land to this state pursuant to the conditions prescribed by section 37-247.
H. If urban lands in the area of the adopted plan are sold, the purchaser shall conform the use of the land to the development or secondary plan and to other local zoning ordinances.
I. On a determination by the board of appeals that the land to be developed under this article should be leased, the commissioner shall incorporate the provisions of the approved development or secondary plan into the lease. The commissioner shall comply with all publication and other statutory requirements for the lease of state lands.
J. The successful bidder shall pay to this state the relative proportionate part, based on the ratio of lands proposed to be leased to lands covered by the development or secondary plan, of the actual costs incurred by this state in obtaining the development or secondary plan adopted for implementation. Payment to this state shall be made at the time the lease is signed. All state costs recovered at the time of lease shall be paid to the state general fund.
K. The lessee shall submit to the jurisdiction of the county or the incorporated city or town within whose jurisdiction the land is located with respect to compliance with building, safety and housing codes or ordinances and any development or site plan review procedures applicable to the development of the land for the uses permitted by the lease.
L. A lease issued pursuant to this section may be terminated, at the option of the commissioner, for any violation of lease provisions pursuant to the conditions prescribed by section 37-288. On cancellation or termination of a lease issued pursuant to this section, the commissioner may seek a new lessee only by complying with the same process through which the original lease was issued. If the costs of the development or secondary plan have been received by the state as provided in subsection J of this section at the time of termination or cancellation, a subsequent lessee under this subsection need comply with subsection J of this section only to the extent that the lease offered to the subsequent lessee includes lands for which the proportionate part of the costs to the state for obtaining the development or secondary plan have not been recovered.
M. An encumbrance shall not be placed upon this state's interest in land leased for development. The lease may contain provisions that will permit the encumbering of the lessee's interest in the lease by mortgage or deed of trust.
N. Within the scope of an approved development or secondary plan, the commissioner may assess the value of rights-of-way or parcels to be used for parks, schools, public facilities, open space or other public purposes, and assign those values to parcels that will be sold or leased for residential, commercial or industrial purposes as payment for the purchase or lease price that otherwise would be required for such rights-of-way, or parcels to be used for parks, schools, public facilities, open space or other public purposes. The total revenues derived from all parcels within the development plan shall not be less than the aggregate appraised value of all the parcels.

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