The Valley is booming with cranes rising across the metro building everything from apartments, industrial warehouses and manufacturing facilities and office buildings to restaurants, shopping centers, hotels and theme parks. There are literally tens of billions of dollars worth of construction going on right now around Phoenix and the economic impact of these projects will be even larger once they are completed.
With so many projects across so many different sectors, the Business Journal’s commercial real estate and economic development team has come up with a list of 15 developments that everyone should be keeping their eyes on in 2022 and beyond. Click on the project name to learn more details.
Taiwan Semiconductor Manufacturing Co. plant and north Phoenix supplier sites: Arizona’s largest foreign direct investment in history began construction in 2021 and will continue through all of 2022. The shell of the building is expected to be complete in the middle of 2022, and then the process of "conditioning" the fab, meaning establishing clean rooms and removing all contaminants will begin. That process is expected to take another 12 months, city of Phoenix officials said. The plant is being built on 1,128 acres of land near Loop 303 and the 43rd Avenue alignment in north Phoenix and has already begun to create a ripple effect in the area. Mack Real Estate Group bought land in the Deer Valley area designated as a supplier site for TSMC, and will begin constructing the Mack Innovation Park in 2022, which will eventually include 4 million square feet of buildings, including manufacturing and other industrial space. Sunlit Chemical, a Taiwan-based chemical manufacturer, bought a parcel from Mack and will begin construction on its facility in early 2022.
Intel expansion: Intel Corp. has been one of the largest employers in the Valley for decades, but the California company is growing its presence with two new semiconductor chip factories in Chandler. Altogether, the project is expected to cost $20 billion and will employ 3,000 more people once completed. It is also expected to create 3,000 construction jobs while the fabrication facilities are being built. In 2021, Intel created a new foundry business, which it will manufacture chips designed by other companies. The new fabs in Chandler will be the first in Intel’s system with dedicated capacity just for the foundry business. The city of Chandler has already committed to spending up to $30 million on water and road infrastructure for the new Intel site. Intel started construction on the new factories in September 2021. They are expected to be operational by 2024.
KORE Power battery facility: Coeur d’Alene, Idaho-based KORE Power Inc. plans to start construction on its planned 1 million-square-foot, 12 gigawatt-hour battery manufacturing facility in the first half of this year in Buckeye. The massive facility will be built on about 214 acres near State Route 85 and MC 85 and is expected to start production by the end of 2023 and bring 3,000 well-paying jobs along with it. KORE aims to be the first major U.S.-owned manufacturer of high-density lithium-ion pouch cells and build out the surrounding area as what it’s calling the “Sustainable Valley,” where investors and real estate firms have started purchasing and selling land.
Novus: Construction on the third phase of the Novus Innovation Corridor at Arizona State University is well underway, and a hockey and multisport arena is expected to be open by the end of 2022. Planning is underway for another 600,000 square feet of buildings in the area, on the east side of Arizona State University’s campus. A six-story apartment complex that is planned to have 200 micro-units is planned to begin construction in early 2022, as well as a speculative office building, an additional 340-unit apartment building and some low-rise creative office, which will be built on the former Karsten Golf Course.
Metrocenter: After years of trying to find a buyer for the shuttered north Phoenix mall, Concord Wilshire Capital and TLG Investment Partners are under contract to buy it and are scheduled to close on the sale in the summer of 2022 but have agreed to begin demolition ahead of closing. The redevelopment plan, called the Village, will include 2,600 multifamily units and 100,000 square feet of essential and service retail. The plans also call for boutiques, retail stores, restaurants, bars, a town-center park, and other commercial and entertainment venues. The redevelopment is expected to cost about $750 million, and vertical construction will likely begin in 2023.
Facebook Mesa Data Center: Meta Platforms Inc., formerly known as Facebook Inc., choose Mesa in 2021 as a destination for an $800 million data center. The first phase of the Facebook Mesa Data Center will consist of two buildings totaling 960,000 square feet, and the first building should be online by the end of 2023. Once operational, Facebook expects the project to support approximately 100 jobs. The construction of the data center is expected to require up to 1,500 construction jobs at peak. In July, Facebook purchased 396 acres in Mesa on the southeast corner of Elliot and Ellsworth Roads for $123.2 million and announced that construction started in August.
Industrial growth in Casa Grande: While TSMC’s effects are the most obvious in north Phoenix, an unexpected area south of Phoenix is also seeing the benefit. Chang Chun Group bought 84 acres near Burris and Clayton roads in Casa Grande for $5.2 million, according to real estate database Vizzda. Another supplier to TSMC, LCY Chemical, has also already closed on a location in Casa Grande. The company bought 34 acres near Burris Road and Gila Bend Highway for $5.5 million. Kirk McCarville, a broker with Land Advisors, said several other TSMC suppliers are also expected to close on land in Casa Grande in 2022.
Sky Harbor expansion: There are always multiple projects underway at Phoenix Sky Harbor International Airport, but two major ones are expected to be delivered in 2022. A new eight-gate concourse is being built in Terminal 4 for Southwest Airlines. McCarthy Building Companies Inc. is the general contractor for the $310 million project, which will add 130,000 square feet to this final concourse in Terminal 4. Sky Harbor will also be completing a $745 million extension of the PHX Sky Train this year. The project will extend the train line more than two miles to the rental car center. Sky Harbor received more than $19 million from the federal Infrastructure Investment and Jobs Act in December and will continue to get grants from that legislation for the next five years, meaning a lot more construction will be arriving soon.
Southbridge: After the original plans for the second phase of Southbridge were withdrawn, a new ownership group is planning a scaled-down version of the mixed-use project in Old Town Scottsdale. Phoenix-based Creation RE is buying the land, which is in three noncontiguous sites totaling 4.5 acres, from the Unger family for $38 million. Creation is still in the early stages of what the project will look like, but the plans still call for a mixed-use development with restaurants, hotels, office and residential uses, but “a lot less density” than the original plan.
Santan Mountain Casino: The Gila River Indian Community began construction on its fourth casino in the Phoenix metro in the fall of 2021. The casino is being built south of Chandler on 160 acres of Gila River community trust land on the southeast corner of Gilbert Road and Hunt Highway. The project is expected to cost at least $150 million and could open in 2023. The tribe has wanted a fourth casino for years but agreed not to open one in the early 2000s as part of gaming compact negotiations with the state. But in 2021 the tribe, Arizona Gov. Doug Ducey and the state Legislature agreed to a new gaming compact, which allowed both sports wagering within the state and the Gila River Indian Community to open its fourth casino. The tribe expects it to employ more than 650 people.
Food innovation: Arizona Fresh Holdings is planning a major redevelopment to a former landfill in South Phoenix, which aims to create a large-scale food distribution center, along with a food market, community park and education and research facilities related to food and agriculture near Seventh and Elwood streets, including the former Rio Salado Park. The project will include 153 acres and is estimated to cost $200 million to develop. The first phases to be built include a 20-acre park, the wholesale food distribution buildings and research and development space. Early construction will begin in 2022.
Central Station: The redevelopment of the downtown Phoenix transit station is planned to begin in 2022. Current plans call for two towers of residential units, including some that are planned for student housing and others that will be apartment units, as well as 47,350 square feet of ground-floor retail, restaurant or grocery space and 35,350 square feet of office space. Phoenix City Council approved the lease and development agreement for the transit depot, at Central Avenue and Polk Street, in April 2019 after a request for proposals was issued for redevelopment of the transit depot site, and Medistar was the chosen developer.
Glendale’s lagoon, amusement park and mixed-use office projects: Construction is underway for the massive mixed-use entertainment project near 95th Avenue and Cardinals Way in Glendale. The Crystal Lagoons Island Resort, a planned mixed-use entertainment project that will be anchored by an 11-acre lagoon in Glendale, will also be home to the first-ever Mattel Adventure Park. In total, the development will include 978,000 square feet and cost about $260.24 million to construct. The project will also include about 630 new hotel rooms. The project will be developed in a single phase and be operational by October 2022. A 62-acre parcel near State Farm Stadium and the amusement park comprised of 600,000 square feet of new, class A office space, 60,000 square feet of retail, restaurant and entertainment space; new hotels and 230 apartment units are also on the way. Early improvements like infrastructure and the hotel and apartment components were expected to move quickly.
Cannon Beach: Glendale’s isn’t the only lagoon project under construction right now. Developer and Gilbert resident Cole Cannon began construction in 2021 on his lagoon and entertainment project called Cannon Beach in Mesa. The project is planned near Power and Warner roads and will feature a 1.8-acre surfing lagoon complete with a sand beach and splash pad. The surf lagoon will be part of a larger, mixed-use portion of the site, totaling about 30 acres, which will include a hotel, restaurants, a gymnasium and office buildings surrounding the surfing area.
The Cubes at Mesa Gateway: Massive industrial real estate projects have become extremely common in Phoenix’s West Valley, but East Valley officials are saying, “We can do large industrial too.” In 2021, Mesa landed a big one, The Cubes at Mesa Gateway from national real estate and development firm CRG. The Chicago-based firm purchased 268 acres between Pecos and Germann roads just south of the Phoenix-Mesa Gateway Airport for $30 million, according to Maricopa County records. The developer plans to invest $300 million to build as much as 4 million square feet of speculative and build-to-suit industrial space on the property. Construction is expected to start in the second quarter of 2022 and the first buildings should be delivered by the end of 2022. The entire project should be completed in late 2024. CRG has an even bigger Cubes project in the West Valley that has already attracted the likes of Williams-Sonoma Inc. (NYSE: WSM) as a tenant.
|