By Matthew Roy for Arizona Builder’s Exchange
More than 300 Commercial Real Estate professionals packed a full house at the JW Marriott Camelback Gold Club in Scottsdale Wednesday as Arizona Builder’s Exchange hosted its 2016 Phoenix Metro Development Summit.
AZBEX’s second annual summit drew three times the number of attendees as last year’s inaugural event. This year, they were treated to presentations from prominent voices in the Phoenix Metro-area Economic Development community, followed by a happy hour networking event.
Mark Stapp, MRED, a professor and Executive Director of the Master’s of Real Estate Development program in ASU’s W.P. Carey School of Business, kicked off the half-day event with his description of the local real estate market.
Stapp described an “interesting” market that has, according to a number of indicators, showed signs of slowing over the past six months, despite 12 to 18 prior months of consistent growth and optimism. He suggested that a variety of factors may be affecting investor opinions and behavior in a market driven more by psychology than statistics.
Some of these factors include economic and political uncertainty. Stapp said that even though there has been slowing in some areas and with some specific products, the Metro market is poised for broader expansion. He said that small, infill, locally focused projects remain the most viable, despite challenges. And that the urbanization of our suburbs will continue.
Research & Biomedical Development Around the Valley
Vanessa Hickman, Executive Director of ASU’s Large Landowner’s Initiative (also former Director of the Arizona State Land Department and State Land Commissioner) moderated a panel, which included Phoenix Deputy City Manager Paul Blue, current Arizona State Land Department Director Max Masel, and ASU Associate Vice President for Program Development Planning Rick Naimark. That panel provided an overview and update on developments in healthcare in North Phoenix and Downtown Phoenix.
Development of Downtown Phoenix’s Biomedical Campus – in partnership with ASU and UA – has seen 1.6MSF and $526M of investment so far. In the future, according to Blue, ASU could add 1.5MSF of development on seven acres, while UA may add another 1MSF on four to five acres.
Along the Loop 101 in North Phoenix’s Desert Ridge area, the Mayo Clinic campus encompasses 210 acres with 1MSF of development to date. Total development could max out at 7.9MSF in a long term strategy that will take decades to build out. Naimark said ASU’s Health Solutions Innovation Campus at the Mayo Clinic Hospital is a cutting-edge partnership, which plays on the strengths of both entities.
“We want to create one of the world’s best wellness destinations,” Naimark said, describing a synergy between partners that includes shared missions of community engagement and research. He suggested that public private partnerships would lead to the development of not only clinical and research facilities, but also a wide range of amenities to provide holistic care.
Naimark also praised plans for a new Downtown Mesa ASU campus, which is seen as a good bet in an area reaping the benefits of the recent extension of the Valley Metro light rail. He also answered questions about the reported development of Forest Service Land in the Payson area, which officials there hope to turn into a small college campus of up to 6,000 students. If negotiations succeed, students at that campus might have access to ASU resources.
Transit’s Impact on Development
Another panel touted the impact of light rail on economic development along its route from Downtown Phoenix into Tempe, including the Discovery Triangle, ASU Stadium District and Tempe Town Lake.
David Adame, President of Chicanos Por La Causa, moderated that panel, which was comprised of Discovery Triangle CEO Don Keuth, Catellus Senior Development Manager Brian Kearney, and Lincoln Property Company’s Director of Development/Construction Management Doug Klocke.
The Discovery Triangle – a 25-square-mile area bounded by Papago Park, ASU Tempe, Sky Harbor International Airport and Downtown Phoenix – was described as an Innovation District.
Keuth said the challenge has been to take an area that had long been overlooked and to, “… bring new things to life,” through public-private partnerships. He said that partners – such as SRP, APS, Cox, Blue Cross/Blue Shield, ASU and UA – are helping place the Discovery Triangle, “… among the most asset-rich 25 miles in the Southwestern U.S.”
Kearney said of ASU Athletic District developer Catellus, “Our mission is to make Tempe great again, and to make Scottsdale pay for it!”, a joke that landed and drew ripples of laughter from the crowd of more than 300.
More seriously, Kearney described a long term plan that will see most of ASU’s athletic facilities, except Sun Devil Stadium, moved and rebuilt in a process funded by up to 7MSF of private development. The result will be an Olympic-style athletic village, which will enhance ASU’s athletic programs and become a rich asset to the community.
Grady Gammage – longtime economic development advocate and Partner at Gammage & Burnham – rounded out the presentations, providing his unique insight and perspective on the information presented throughout the day and Phoenix’s development over the past four decades.
In years past, economic development has been driven by, “… pale Midwesterners buying houses,” Gammage said. Phoenix has long judged its success almost solely on the number of houses built each year, which peaked at 60K homes before the Great Recession brought that party to an abrupt end, he said.
“Instead of judging ourselves on how many houses we can build, we are focused on enriching urban cores,” said Gammage. This is among the topics he discusses in his recently released book, The Future of the Suburban City: Lessons from Sustaining Phoenix, now available at Amazon.
Gammage said that changing demographics and emerging technologies – such as autonomous vehicles – will have a dramatic, if uncertain, impact on the shape of future Phoenix. But as an area with almost no natural disasters, Phoenix will continue to be a prime destination for companies relocating from the Midwest and elsewhere.
Gammage suggested that instead of the migration of pasty Midwesterners we have seen in the past, we will see the arrival of more and more companies from that region.
To learn more about this event, including a complete list of program participants, visit summit.azbex.com.