Discussion and possible action to approve a budget amendment in the amount of $33,300,000 from the City’s contingency appropriation to fully purchase (patent) approximately 144 acres of the parcel recently acquired from State Land as well as advance funding for the 96th Avenue sewer utility, a collector road and drainage projects in Peoria Innovation Core 2.

The City seeks to exchange a portion of the land it recently acquired from the Arizona State Land Department (ASLD) with Amkor Technology to facilitate their relocation from Vistancia Commercial Core to the Peoria Innovation Core.  The City has identified approximately 104 acres of land ideally suited for the construction of their facility.  In order to accomplish this exchange, the City of Peoria must patent the identified parcel of land in the PIC.  To patent a portion of the land, the Participation and Infrastructure Contract between Peoria and ASLD requires the balance of the bid price per acre at 101% plus interest be paid. Additionally, also consistent with the Participation agreement, the City must patent a proportional amount of the undevelopable acres.  This is approximately 15 acres.  Further, the City seeks to develop a collector street within PIC 2.  This requires a patent for the land to place the road upon.  This is anticipated to consist of another 25 acres. To patent the total of 144 acres of land for these purposes is anticipated to cost approximately $8.5 million dollars.

The funds to build the aforementioned collector street on the patented land are projected at $6.4 million. This will be a contingency transfer from the Transportation fund.

There is a need to accelerate several public infrastructure projects.  This includes the sewer line (CIP Project UT00543) on 96th avenue and the associated lift station (CIP Project UT00544).  Both were budgeted across FY26, FY27 and FY28.  The majority of the work will now be completed in FY26.  Therefore, this agenda items asks for a contingency transfer from the Wastewater fund of $7 million ($4M for UT00543 and $3M for UT00544) into FY26.

Another infrastructure project to be funded is the APS extension line to service Core 1 and Core 2.  This is a $6 million project.

Lastly, this agenda item makes a contingency transfer to fund drainage work in Core 2.  There are several drainage elements that need to be protected as well as drainage areas that need to be redirected to maximize developable land.  This project is estimated at $5.4 million.

On June 3, 2025, City Council approved the Final Budget for FY2026, including Capital Improvement Project ED00034, State Land Purchase.

Staff recommends approval of a budget amendment in the amount of $33,300,000 from the City contingency appropriation to the appropriate capital projects.

Staff has been anticipating the development of the Peoria Innovation Core and specifically Core 2; however, some of these projects have a more accelerated timeline than initially anticipated. First, a large economic development initiative has been contemplated for many years and the Half Cent Sale Tax fund has been accumulating fund balance for just such an occasion.  Secondly, land acquisition costs will be recovered through the sale of land either by the City or by State Land.  Third, the FY26 Budget was crafted with a larger than average contingency fund in anticipation of this event. 

Specifically, the $8.5 million associated with the patent of land will be a contingency transfer from Half Cent Sales Tax fund which is partially dedicated to economic development activities.

The $7 million contingency transfer to the 96^th Avenue sewer pipe and Agua Fria lift station will be from the Wastewater fund.

The $6.4 million contingency transfer for the collector road in Core 2 will come from the Transportation Fund.

The $6 million contingency transfer for the APS extension line will come from Half Cent Sales Tax Fund.

The $5.4 million contingency transfer for drainage improvements will be from the Half Cent Fund.