Published October 23, 2023
BILLION-DOLLAR BETS - How five key East Valley municipalities are wrangling huge developments
BILLION-DOLLAR BETS - How five key East Valley municipalities are wrangling huge developments
By Ron Davis
The 2023 Manufacturer of the Year luncheon, put on Oct. 10 by the Arizona Manufacturers Council and Arizona Chamber of Commerce & Industry, had a distinct East Valley flavor to it.
Awards for Excellence in Innovation and Small, Medium and Large Manufacturer of the Year each went to a company in the East Valley, while Champion of the Year was awarded to Queen Creek Mayor Julia Wheatley.
Recognition for strong-performing companies is one thing, but economic development directors in Chandler, Gilbert, Mesa, Queen Creek and Tempe are working toward long-term, sustainable growth in their cities. Each director aims to maximize their city’s assets, land top-tier companies and spur development projects that become community assets.
There is at least one billion-dollar project in each of the five East Valley municipalities. Whether already being built or in the pipeline, these developments, upon completion, will bring thousands of jobs to the East Valley and a ripple effect of indirect jobs and additional investments.
The Phoenix Business Journal surveyed each of the five East Valley cities’ economic development offices on what’s important when considering a project, the pockets of opportunities that exist within their city and what’s the game-changing project that will be felt in the East Valley for years and decades to come. Here is a rundown of the key projects cited:
Chandler: Intel
In a partnership that has now spanned five decades, Intel continues to bolster its presence in Chandler.
Intel is constructing two fabs that total $20 billion at its Ocotillo campus in Chandler. Those fabs are expected to spur the creation of more than 3,000 high-paying tech jobs directly and another 15,000 indirect jobs, which add to the more than 12,000 workers Intel employs at the campus. In total, Intel supports roughly 13,000 jobs in Arizona as one of the Grand Canyon State's largest employers.
A crawler crane, the world’s largest of its kind, is at work in September 2023 lifting steel trusses into place for Intel’s Fab 52 and Fab 62 in Chandler. The crane can lift 3,000 tons at a time — the weight of more than 400 adult elephants. An estimated 50 cranes are needed at the job site.
The expansion at the campus, located near Dobson and Ocotillo roads, began in 2021 and is expected to wrap up “within three to five years from the initial groundbreaking date,” Intel officials told the Phoenix Business Journal earlier this year.
The fabs will have more than 250,000 square feet of clean room space and will produce wafers, which are thin slices of semiconductor material used for the fabrication of integrated circuits. Each wafer can hold hundreds or thousands of chips, depending on size.
Chandler’s semiconductor ecosystem spans far beyond Intel’s campus as Yield Engineering Systems, Bechtel and Edwards Vacuum have each opened offices in Chandler — citing a desire to be near a large concentration of companies and people in the semiconductor and/or electric vehicle sectors.
Outside of the semiconductor space, the city recently welcomed Scheels to Chandler Fashion Center Mall, which quickly saw the impact. The 250,000-square-foot sporting goods retailer saw tens of thousands of first-day shoppers on Sept. 30, which more than doubled the normal foot traffic at the Macerich Co.-owned shopping center.
With 95% of the city either developed or entitled, Chandler is being creative to find pockets for redevelopment. The Uptown Chandler Business District north of downtown could play a key part in that effort as it offers smaller office and industrial space that’s been mostly leased up by smaller tenants. There are additional opportunities in retail spaces from tenants that left the area over the last 30 years for centers closer to the freeways. Empty big-box spaces left behind could be redeveloped and utilized for several possibilities, including some needed multifamily housing.
Gilbert: The Ranch
After a tense town council meeting last November on The Ranch, an amicable path between project developers IndiCap and Colmena Group and Gilbert residents looked murky.
But the more than 300-acre project on the southwest corner of Power and Elliot roads received approval in June. While most of the acreage is earmarked for industrial development, the project owners made retail, restaurants and multifamily a larger part of The Ranch, which could end up having a $1 billion valuation upon full build-out.
The Ranch, though modified, remains mostly an industrial project, with that use accounting for 221 of the 311 acres of the site. Plans for the rest call for more than 50 acres of general commercial and more than 35 acres for residential use, which will include 750 multifamily units.
The updated plans call for more than 50 acres of general commercial and more than 35 acres for residential use, which will include 750 multifamily units.
In August, Power Ranch LandCo LLC closed on the deal to acquire more than 300 acres from the Dale C. Morrison Trust in a deal that amounted to $105 million. Construction is expected to start in 2024 on The Ranch.
Elsewhere in town, Gilbert approved Cactus Surf Park’s plans to develop a 25-acre surf park at Gilbert Regional Park near Queen Creek and Higley roads under the same name. Features planned for the venue include a water park, a surf lagoon, a sand beach and more.
Gilbert has spent several years focusing on the evolution of its Heritage District, the town’s downtown, and during that time it has become a premier East Valley dining and entertainment center. The town is bolstering that effort by way of the Vaughn Ventilator project, which will extend Vaughn Avenue from its existing dead end to run parallel with the Union Pacific Railroad.
In September, town councilors approved the $18.4 million purchase of 18 acres of land in the Heritage District. Those 18 acres are between North Neely Street and the southeastern side of the Union Pacific Railroad tracks that cut through the Heritage District.
The preferred use for a portion of the purchased land is either transit or multifamily. Another portion of the land is marked out in the plan for a park that can accommodate large events.
Mesa: Google
The decision to establish the Elliot Road Technology Corridor has paid dividends for the city of Mesa. Tech giants like Apple, Amazon and Meta Platforms Inc. have all set up or moving forward on constructing new developments along Elliot Road.
Google started this summer on the first phase of its massive data center within the corridor. The 288,530-square-foot data center is expected to go live in 2025. By 2030, Mesa expects all three phases to be complete, which will spread across three buildings and 750,000 square. In total, the investment is estimated in excess of $1 billion.
A project that’s a bit more fluid, however, could reignite a southeast corner of Alma School Road and Southern Avenue, which is the former site of Fiesta Mall. The mall shuttered in early 2020 as Dillard’s — the last operating tenant at the mall — closed its doors.
In October, Tempe-based Verde Investments filed a re-zoning application that proposes to develop the old mall with up to 4,000 apartment units; 750,000 square feet of office space; 1.1 million square feet for commercial use including a hotel; and more than 520,000 square feet of open space. Those proposed plans come with a new project name: Fiesta Redefined.
Demolition of the mall started in July and is about two-thirds complete as of Oct. 17.
Elsewhere in Mesa, the city continues to invest in a 10.5-mile water pipeline to ensure the resource will remain available to residents as well as commercial and industrial users. The pipeline starts in north Mesa, which takes reclaimed wastewater from a city treatment plant and delivers it to the Gila River Indian Community for irrigation use. For every 10 gallons given to Gila River, Mesa gets eight gallons back that can be converted into potable water.
Construction is expected to be completed on the pipeline in 2025.
Throughout 2023, Mesa brought in hundreds of new jobs and millions of dollars in investment from economic deals such as Benchmark Electronics and Xnrgy Climate Systems, which will bring more than 1,000 jobs collectively to Mesa.
Queen Creek: LG Energy
A multibillion-dollar economic development deal that has only gotten bigger could pay off for years to come in the emerging town of Queen Creek.
LG Energy Solution Ltd. won 650 acres of Arizona State Trust Land in Queen Creek in April 2022. There, LG has plans to bring on both a cylindrical battery facility and a lithium-iron-phosphate battery plant to the northeast corner of Germann and Ironwood roads. Since the company’s announcement, the project has faced some delays. The company previously said it was pausing its plans to reevaluate its investment, citing economic conditions, after originally expecting to start production in 2024.
A rendering shows the planned battery manufacturing facility that LG Energy Solution is going to build in Queen Creek.
Earlier this year, however, LGES reaffirmed its commitment to build in Arizona and upped its investment from $1.4 billion to $5.5 billion for what the state has called the largest single investment in a standalone battery facility in North America.
A new CBRE Group Inc. report said the 1.4 million-square-foot plant is expected to create 4,000 jobs. LGES is expected to be Queen Creek's largest employer once it is built out. Both plans are expected to be open by 2026, according to previous reporting.
Queen Creek has been making good use of more than 4,000 acres of state trust land, which is an option for large employees looking to set up shop in the southeast valley, particularly along Germann Road near the new State Route 24.
Keeping up with the town’s growth and making sure transportation corridors are among the chief priorities for the town’s economic development office.
As the plant and those jobs at LG come to fruition, the new hires could take advantage of retail and restaurants in Queen Creek, particularly near Ocotillo and Ellsworth roads. Two shopping centers with major anchors are emerging: Vineyard Towne Center, anchored by Sprouts and Target, and Queen Creek Crossing, which will be anchored by Costco.
West of Queen Creek Library, the town is considering bringing a pedestrian-oriented development of 35,000 square feet of needed office space, 27,000 square feet of specialty restaurant and retail uses, and luxury multifamily to a seven-acre site.
Tempe: South Pier
With arguably the best views in the Valley, nearby amenities and some of the region's biggest and newest buildings, Tempe commands the highest asking office rents in all of the Valley, particularly along the lakefront.
South Pier — another multibillion-dollar project that will add to the office mix as well as rentable luxury apartments, condominiums for purchase and senior housing — got going earlier this year. Washington state-based McBride-Cohen Management is developing 18 acres along Vista Del Lago Drive on the Tempe lakefront.
South Pier at Tempe Town Lake is a waterfront mixed-use project that will include 724 residential units and 26,267 square feet of retail space in the first phase of development.
The developer also plans two luxury hotels, more than 600,000 square feet of high-rise office space and a multi-acre entertainment district that will include restaurants, nightlife experiences, concert venues, fountain shows and a large Ferris wheel.
The full buildout is expected to take place over the next 15 years with three apartment towers and 26,000 square feet being first up on the list.
In 2024, McBride-Cohen is expected to start on the office tower, a luxury hotel, a for-sale condo tower, a senior housing tower and more retail and multifamily.
Tempe’s economic development office has made the area around the lake and Mill Avenue a big priority. In 2023, the 18-story 100 Mill — regarded as one of the more sought-after amenity-rich office buildings in the Valley — inched closer to 100% occupancy.
Down the street, Venue Projects is partnering with Sunbelt Holdings to turn the historic Hayden Flour Mill at Rio Salado Parkway and Mill Avenue back into a community asset. The mill, which is the namesake of Mill Avenue, closed in 1998.
Venue Projects and Sunbelt Holdings look to bring on eight buildings, including six newly built structures.
“It’s iconic, you truly know you are in Tempe when you see it. We’re bringing it to life with new office space, new restaurants and new shopping experiences while preserving the mill and silos,” the city wrote in a statement to the Phoenix Business Journal.
Housing remains a top concern for Tempe. At recent city council meetings, councilors, in separate actions across two meetings, approved four mixed-used projects that will bring on nearly 1,200 rentable units.
