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NOVEMBER Friday Morning Breakfast

Posted By Heather Garbarino, Thursday, November 21, 2019

 

‘Go West, Young Developers!’

West Valley development corridors driving huge opportunities 

An analogy can be made between the popular movie “Field of Dreams” and what is happening in Metro Phoenix’s West Valley – at least in the eyes of developers.

A corn farmer in Iowa hears a voice telling him: "If you build it, he will come." It’s to be interpreted as instructions to build a baseball diamond in his fields. In the expanses of the West Valley, developers are finding their diamonds in the rough.

When Maricopa County approved a Regional Transportation Plan in 1985, not even the most optimistic Arizonan would have predicted the population boom to arrive in the Valley over the next three decades.

The Loop 303 was a critical part of its passage at the time. While it took longer than initially planned, the West Valley freeway's expansion is now playing a crucial role in bringing new development and attracting world-class businesses like Red Bull, Nike, Sub-Zero, REI, Dick’s Sporting Goods and many others to the area.

With the completion of the Loop 202 South Mountain Freeway connecting the East Valley to West Phoenix, business leaders, real estate experts and developers throughout Arizona are projecting another wave of smart development around the new transportation corridor to continue the region's strong economic growth.

November’s Friday Morning Breakfast brought together development leaders who are extolling the virtues of the “Go West” mantra.

Panelists included Don Bessler, Chief Capital Investment Officer, City of Glendale; Nic Fischer, Vice President, Merit Partners, Inc.; David Krumwiede, Executive Vice President, Lincoln Property Company; and Kelly Patton, Senior Economic Development Consultant, APS. Moderating the breakfast was Rusty Kennedy, Senior Vice President, Industrial, CBRE.

“With the arrival of the 303 and PV303, you saw a cross section of many things giving the West Valley an edge,” Fischer said. “Infrastructure. An employment base. Transportation. You can see where the population has shifted. This presents a real opportunity to answer the question: ‘Is this a place where you want to work and also live?’ Also, the availability of infrastructure has been the key to the West Valley’s success.”

According to Bessler, it’s all about “connectivity and labor.”

“Our market features the third-largest labor pool behind Los Angeles and San Francisco,” Bessler said. “Everything is about attraction and retention. Back in the day, a company’s HR person came to the site visit on the last day. Now, the HR person is on all the tours. They’re not just moving location. These are all new hires. With connectivity, you’re a day’s truck drive from 65 million people in the West.”

To prepare for all these new residents and development, energy is a vital commodity. APS is very aware of this, Patton said.

“There is so much activity in the West Valley, and that’s great to see,” she said. “When a company comes into our service area, we can offer a generational mix of coal, nuclear and natural gas. So we don’t put all our eggs in one basket, we can shift our power from one source to another to offset liability and cost. Companies like Nike, Microsoft and REI want their own (carbon free) footprint. We help them get there.”

With major development comes the fear of overdevelopment, which some economists say hurt the Valley during the Great Recession. Patton said infrastructure capacity is a major priority in this cycle.

“The question is how much capacity can we have and still stay ahead,” she said. “You have to remember this is growth not just in the business sector but in the residential sector as well. We are working with these two entities on the development side. It takes about 18 months to build a substation.

“We have to identify where are those areas growing. Where is the best location? We have to make sure we are prepared for that growth. That will make us much more competitive. To have the ability to plan and bring business here. The West Valley presents that opportunity,” Patton said.

Available amenities are also helping drive the West Valley’s momentum. Bessler says he wants to see Westgate become “the downtown of the West Valley.”

“We had 10.2 million visitors to Westgate last year,” he said proudly. “There is so much excitement there. We have a millennial workforce that resides in the community. The West Valley has raised the live-work-play desire greatly.”

The panel also discussed the role the Loop 303 has played and the development boom the West Valley has enjoyed around that transportation corridor.

“Major tenants are out there and want to come to the West Valley,” Krumwiede said. “They are driven by common factors, and one is access to transportation. The freeway had a big part in a company like Sub-Zero locating a facility out here.”

Fischer said the second piece is that the West Valley has room to grow.

“In a traditional industrial market, land constraints are an issue. Sometimes there is no sizable land available. The users along the 303 each bought their building. These are not lease transactions. They are making a long-term commitment. It’s pretty exciting that they want to plant their flag here.”

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