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Mackay Outlines Strategies for Phoenix Economic Development

Companies like Mayo Hospital and USAA (pictured) continue to expand their Phoenix operations because of investments the city made a decade or more ago in strategically located infrastructure improvements. Phoenix hopes further investments in infrastructure will foster continued economic growth for the city. Photo credit:

By Luci Scott for Arizona Builder’s Exchange

Phoenix is being urged to pull out the stops and engage in a big way with developers and real estate professionals, including site selectors, to make Phoenix more competitive in the global economy.

Christine Mackay, director of community and economic development, detailed her department’s ambitious goals in a wide-ranging memo to Deputy City Manager Paul Blue.

She is urging the city to make capital infrastructure investments in major employment corridors to increase ready-to-develop sites.

Mackay identified two potential major sites as ripe for development into tech corridors: the Gateway market in the area bounded roughly by 32nd and 52nd streets and Van Buren and Washington streets, and Desert Ridge along Loop 101 from State Route 51 east to the Phoenix border.

“Major corporate players would invest in this (Desert Ridge) market if infrastructure was in place,” she wrote. “In fact, this would become the key tech market of the entire Valley.”

Her memo was a recipe for boosting Phoenix, which she said had been outpaced in economic development, especially by the East Valley.

“To be competitive, Phoenix will need to make significant investments in infrastructure and transportation corridors to win these significant projects,” Mackay wrote.

She said the city needed to identify key economic-development sites and the required infrastructure as well as sites that need zoning to support employment. The city also needs to consider ways to finance infrastructure construction that would support large land tracts for employers.

Mackay urged the city to commit resources toward job creation, which would include leveraging partnerships with GPEC, ACA and GPCC, and launching outreach campaigns to real estate owners, developers and consultants.

Goals include work with private sector

Her other goals are to cultivate entrepreneurship and emerging enterprise ecosystems and pursue redevelopment opportunities to revitalize economic activity, which includes collaborating with the private sector to facilitate private capital investment in mixed-use infill/redevelopment projects.

Her goals also include encouraging public/private partnerships, collaborating with the private sector to deliver more residential units downtown, and streamlining processes to enhance efficiency.

She suggested a “New Urban Tech” campaign focusing on the Warehouse District and obsolete buildings in downtown and midtown.

To revitalize the Camelback Corridor, she is urging owners, brokers and the entire community to form a working group to elevate the image to reflect a Class A location.

Employment corridors have suffered from lack of occupancy and lack of investment, and redevelopment – both public and private – is key to resuscitating them, she said.

“To compete against suburban sites that develop faster and at less cost, (Phoenix should) collaborate with the private sector to facilitate private capital investment in mixed-use infill/redevelopment projects,” she said.

She also wants RFPs on city-owned sites to encourage public/private partnerships to redevelop neighborhoods or employment corridors.

Fund proposed to get sites shovel ready

To get sites shovel ready, her staff proposes that the City Council create a Strategic Economic Development Fund, capitalized from 50 percent of net new sales tax (utility, construction, telecommunications and rental) for all new CEDD-supported projects. The other 50 percent would go to the General Fund.

“The revenue sharing would remain in effect for five years for any given project,” the memo said.

“Based on current activity levels, staff believes the funding level generated in the first year would be about $2-3 million,” which would be allocated by City Council toward infrastructure, job training, entrepreneurship and marketing.

She predicted that within two years of the fund’s creation, CEDD might be able to reduce its burden on the General Fund, drawing a portion of its annual budget from the fund.

“It would allow quality job growth to pay for itself, with infrastructure, entrepreneurial and job investments, only to the level that this growth has occurred.”

Mackay also asked for three new staff positions to drive the proposed programs.