Summary: Legislation passed in 1988 authorized the Interior Department to swap its former Indian School property in downtown Phoenix for more than 100,000 acres of land near the Florida Everglades owned by the Collier family along with $34.9 million in cash to set up two Indian trust funds. While most of the exchange conditions set by the law have been met, the City of Phoenix placed limitations on the uses of the Indian School land and the Barron Collier Co. had the right to match the highest bid. As a result, no competing bids for the property were received, and Congress' intent to test the value of the land by exposing the school site to meaningful competitive bidding was not met. For several reasons, GAO cannot conclude that the Florida land, along with the $34.9 million, equals the value of the Colliers' portion of the Indian School property. For instance, the Florida land, which was possibly overvalued in 1988, has not been reevaluated since then, and its value could have fallen during the recession. GAO does not question the right of the City of Phoenix to decide how privately-owned property should be used. Yet the city's action in this case raises questions about whether a locality should have the authority to use zoning as a way of acquiring land in federal disposition programs without compensation to the federal government. Conflict arose during the Phoenix exchange because of efforts by the various entities to meet the intent of the exchange. Such natural conflict raises the issue of how future exchanges can be designed to accommodate the demands of several parties and still meet a market demand test.
