Yesterday we reported on the presentation by consultant Mark Longacre, the State Land Department’s new annexation process, and council concerns about such. Today we discuss other unanswered questions and concerns raised by the Town Council about whether annexing these State Lands makes sense for Oro Valley.
Several Council members questioned whether Oro Valley has sufficient water to support annexing and developing the State Trust Land. Vice Mayor Melanie Barrett noted the property would rely entirely on CAP water, which could increase rates for all residents. Water Utility Director Peter Abraham said full build-out would require roughly 1,000 acre-feet per year [See bases of estimate after article] and flagged uncertainty after 2026 when the current Colorado River drought-contingency plan expires. He added that the Town’s infrastructure could serve the property, but future CAP cuts could make that service unsustainable.
Is this annexation economically feasible?
Several Council members questioned whether annexation would make financial sense. Councilmembers Jones-Ivey, Nicholson, and Murphy pointed to prior analyses indicating the project would be viable only with substantial commercial/retail development. They observed that nearby Marana centers already meet most retail demand, leaving limited room for new stores. Nicholson added that local sales tax is about 44% of Town revenue, while residential growth alone generates limited ongoing income. Without sufficient retail, the Town could face added service costs without offsetting revenue.
Environmental and sensitive-lands considerations
Council members raised concerns about the site’s environmentally sensitive features. Barrett cited the large number of saguaros, ironwoods, and washes mapped on the property and said any plan would likely need a low-density “finger” pattern similar to nearby Marana to preserve natural corridors. Earlier work under an Environmentally Sensitive Lands Overlay (ESLO) identified core resource areas and resource-management zones that would significantly limit where construction could occur.
Are there State Lands on Oracle better suited to the Town? Shouldn't the town identify and pursue these first?
Councilmember Josh Nicholson suggested exploring other State Land parcels—particularly along Oracle Road—where utilities and existing retail make development more practical. He argued those sites could generate revenue without the environmental and infrastructure challenges of the 888-acre tract near Tangerine Road.
Why act now?
Councilmember Murphy questioned the urgency to proceed, noting Marana has shown no interest in the property and there is no immediate development pressure. She favored waiting until financial conditions, water availability, and public sentiment clearly support such an expansion.
Several Council members questioned whether annexation would make financial sense. Councilmembers Jones-Ivey, Nicholson, and Murphy pointed to prior analyses indicating the project would be viable only with substantial commercial/retail development. They observed that nearby Marana centers already meet most retail demand, leaving limited room for new stores. Nicholson added that local sales tax is about 44% of Town revenue, while residential growth alone generates limited ongoing income. Without sufficient retail, the Town could face added service costs without offsetting revenue.
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Council members raised concerns about the site’s environmentally sensitive features. Barrett cited the large number of saguaros, ironwoods, and washes mapped on the property and said any plan would likely need a low-density “finger” pattern similar to nearby Marana to preserve natural corridors. Earlier work under an Environmentally Sensitive Lands Overlay (ESLO) identified core resource areas and resource-management zones that would significantly limit where construction could occur.
Are there State Lands on Oracle better suited to the Town? Shouldn't the town identify and pursue these first?
Councilmember Josh Nicholson suggested exploring other State Land parcels—particularly along Oracle Road—where utilities and existing retail make development more practical. He argued those sites could generate revenue without the environmental and infrastructure challenges of the 888-acre tract near Tangerine Road.
Why act now?
Councilmember Murphy questioned the urgency to proceed, noting Marana has shown no interest in the property and there is no immediate development pressure. She favored waiting until financial conditions, water availability, and public sentiment clearly support such an expansion.
Shouldn’t the town first consider the financial prospect and resident interest to annexing this property before opening conversation with the State?
Vice Mayor Barrett and Councilmember Murphy said the sequence in the new State Land Department process should be reversed. They argued that public engagement and an updated fiscal analysis must occur before requesting a Planning Authorization Letter (PAL) or hiring consultants. Both cautioned against spending Town funds before residents are heard and the economic implications are clear, reminding colleagues the last attempt faced strong opposition over density, traffic, and environmental impacts. Members also noted the Town would be navigating an untested, jurisdiction-led process with uncertain outcomes and potential procedural conflicts with the State.
Council wants more confidence that State Land annexation process has really changed and will remain that way
There was no formal Council direction to pursue annexation further. Members agreed that too many questions remain—about the process’s stability, the Town’s water capacity, and fiscal viability—to justify moving ahead now. The topic may be revisited after the State clarifies its administrative approach and there is more evidence from other jurisdictions or updated local analyses.- - -
Note: Oro Valley’s current Central Arizona Project (CAP) allocation is about 10,305 acre-feet per year. The estimated 1,000 acre-feet of water needed for full build-out of the State Trust Land would represent roughly 10% of the Town’s total CAP supply. Water Utility Director Peter Abraham said this estimate assumes that the entire area would eventually be developed, using typical Oro Valley per-acre water demand rates for mixed residential and limited commercial uses. He also assumed the property would rely entirely on CAP water—not groundwater—and that current CAP allocation levels remain stable. Abraham noted that nearly all of Oro Valley’s existing CAP supply is already committed to current customers, meaning such an annexation would reduce the Town’s flexibility during future CAP shortages or to support other growth areas.
