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Mayo Clinic Expansion a Regional Game Changer

Courtesy of Mayo Clinic

Project Could Accelerate Development from SR 51 to Scottsdale Road

By Roland Murphy for Arizona Builder’s Exchange

A long-standing vision to create a biomedical corridor south of Loop 101 in north Phoenix and to hasten general development in the area got a major boost this week when Mayo Clinic announced a $648M, 1.4MSF expansion that will nearly double the size of its Phoenix campus over the course of the next five years.

The plan, known as “The Arizona Forward Project” will expand “clinical capacity, support services and infrastructure at the campus located near Loop 101 and 56th Street in North Phoenix,” the announcement said. The facility’s inpatient bed count will increase from 280 to 374 by 2023. By 2029, nearly 2,000 new jobs, including approximately 200 physicians, will be added to the staff rolls.

“Growing our facilities in Arizona to accommodate increased demand is essential,” said Wyatt W. Decker, M.D.; VP, Mayo Clinic, and CEO of Mayo Clinic in Arizona. “Arizona Forward represents our commitment for the next several decades and beyond — innovating to improve the physical health of patients and the economic health of the state we call home.”

The expansion includes “a new six-story patient tower; a three-floor addition to the existing four-story Mayo Clinic Building; a new three-story building to house an expanded Emergency and other departments; expanded patient and infrastructure space; and additional parking,” the announcement said.

As a premier destination medical center in the Southwest, Mayo Clinic has experienced significant campus growth in Arizona over the last five years. Expansion projects on the campus have included the consolidated Cancer Center in the new Mayo Clinic Building, the Proton Beam Facility and the Image Guided Operating Rooms. Other factors that have supported the growth of Mayo’s Arizona practice include increasing specialization in cancer care, neurosurgery, cardiovascular disease and transplant, along with new and expanding insurance contracts.

Mayo Clinic Hospital in Phoenix was recently ranked No. 1 in Arizona and the Phoenix metro area, and No. 11 nationally by U.S. News & World Report. This marks the second time Mayo Clinic has been recognized with two hospitals on U.S. News & World Report’s “Best Hospitals Honor Roll,” which includes the top 20 hospitals in the nation. Mayo Clinic’s campus in Rochester, Minnesota, ranked No. 1 nationally.

New patient areas could open as early as June 2020. The final phase is expected to open in early-to-mid 2023.

The announcement quoted Governor Doug Ducey as saying, “Not only will those of us in Arizona be served by expanded services at Mayo Clinic, but it will further secure Arizona as a global destination for excellence in health care.”

In a phone interview with AZBEX Thursday morning, Phoenix Community and Economic Development Director Christine Mackay said, “For that whole North 101 area, this is an absolute game changer. When you see them today at 1.6MSF and nearly doubling in size, what’s so exciting about it is it’s across the board. It’s a $650M capital investment over the next five years, but it’s not in one specialty. What it shows is they’ve found a great place in the market and the market is a great supporter of Mayo.”

Mayo Clinic has long been recognized as one of the leading healthcare outlets in the world. Last month the company announced its north Phoenix facility had been ranked #1 in Arizona and in the Phoenix metro area and #11 nationally by U.S. News & World Report.

Area Has Long Been Targeted for Major Growth

In addition to the Mayo expansion, the entire surrounding area has been on the precipice of major growth for years. Phoenix Community and Economic Development Director Christine Mackay said, “This is incredibly exciting. It’s a complete game changer for development that has long languished in that area.”

A major component of that planned growth is the Arizona Biomedical Corridor, a vision to turn the area into a hub of medical and bioscience research and implementation. Last summer, Phoenix City Council approved a staff recommendation to enter into an intergovernmental agreement with the Arizona Board of Regents on behalf of Arizona State University for the development of the Health Solutions Innovation Center and to approve the city’s participation in infrastructure improvements needed to get the project rolling. (AZBEX; June 27, 2017)

At the time, Mackay identified the corridor as part of an initiative the Mayor’s Office started by Dr. Wyatt Decker of The Mayo Clinic and President Michael Crow of ASU in 2011 to create world-class biomedical facilities in this area. She said Mayo has 200 acres. ASU has 24 acres, and the balance is more than 200 acres controlled by the State Land Department that will make up the biomedical corridor. Biomedical and healthcare uses are specifically included in the area’s zoning under the Desert Ridge Specific Plan.

Under the agreement Phoenix agreed to reimburse ASU approximately $1.3M for the HSIC infrastructure development, “including water, sewer, street and public telecommunication conduits. ASU will build the improvements and the City will reimburse ASU upon completion,” according to city staff at the time the agreement was adopted. That infrastructure development will also be used as a developmental launch point for future projects in the ABC.

While, as a mature site, Mayo Clinic already has its own infrastructure in place, Mackay said there is a developmental symbiosis between its expansion, and the infrastructure deployment for the ASU/Mayo HSIC and the ABC development plan. “We’re in final design of the infrastructure now,” she said. “You’ll see that break ground probably very early in 2019, and ASU will probably break ground on the building probably in the middle of ’19 as well. The connection of the water lines and sewer lines and some of the roads that go in of course benefit the area because it finishes the looped water system that needs to happen. Any time you finish a connection like that, it benefits development in the area, but when Mayo built initially they had plans and were very forward thinking.”

“This really is such an incredible story. I hate to use the word ‘game changer’, but it is such a game changer for that area. Mayo is number one in the state and number 11 in the world in healthcare, and they’re doubling their size on the Phoenix campus. That area has stalled for such a long time, it is so exciting to see a company like Mayo make an investment right at the time when we’re seeing activity in the area move forward.”

Medical and bioscience firms aren’t the only ones expanding in the area. Longtime resident American Express announced late last month it is expanding its campus on the other side of 56th Street from Mayo to include a new four-story, 300KSF+ building will be located on the north side of the campus, closest to Mayo Boulevard. AMEX announced to employees late in 2017 it would create the expansion building and two new parking facilities. The parking structures are five stories tall and will provide a total of 3,500 stalls to augment surface parking on the campus. (AZBEX, Aug. 28)

Dealing with Volume, Positioning for Growth

The area in question is known for heavy traffic volumes, particularly on Tatum Boulevard at Loop 101. MacKay said that issue, and others, have been taken into account. “We’re working on it!” she said with a chuckle. “That whole area languished because of what we lovingly call ‘The Lost Decade’, and all the roads that should have been built weren’t. There was not residential going in to pay their impact fees to finish those roads. You’ll see them coming.

“What Mayo does in that area is it makes the whole North 101 corridor even more attractive for business and for the creative community to want to live. It’s a tremendous lifestyle asset. They see Mayo at that location and they see it’s a good place for them to go.”

She added, “I think that whole 101 corridor, with all the assets that are there like the MIM and Sumco and these wonderful land assets that are in the area is incredible. You’ve got the Arizona Biomedical Corridor that’s beginning to kick off to the north of Mayo (Boulevard) and all these incredible healthcare and bioscience and thought-leading company assets in the areas of advanced manufacturing and in advanced business services and cyber and all the (fields) that are exactly what you want. By bringing in those great jobs, we can reduce the impact on traffic in the area because now people who live in the area and work in the area as opposed to having to commute out and commute in.”

Her optimism for the area doesn’t stop at just the immediate vicinity of Mayo. In our June, 2017 interview, Mackay said the target for development in the area between SR 51 and Scottsdale Road along Loop 101 is targeted to bring in 30,000 new jobs over time.

Asked Thursday if she thought the immediate and future development would likely resurrect the stalled $100M+ One Scottsdale project, Mackay said, “I think all of that Scottsdale Road frontage will, over the next few years, become tremendously in demand. As you move along the 101, right now kind of the mental river is that 101 turn. As Mayo develops and American Express develops and additional development happens in the area, that will no longer be the mental river. I think both on the Phoenix side and the Scottsdale side, with that Scottsdale Road frontage, you’re going to see tremendous new development in the next four or five years.”

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