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    Home » Planning & Development » Ryan Companies 2MSF Industrial Plan Pivots to $687M Data Center
    Planning & Development

    Ryan Companies 2MSF Industrial Plan Pivots to $687M Data Center

    BEX StaffBy BEX StaffJanuary 21, 2025No Comments6 Mins Read
    Credit: Ryan Companies/City of Eloy
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    By Roland Murphy for AZBEX

    In April 2023, plans came to light that Ryan Companies was planning an industrial development in Eloy that would have placed between 1.8MSF and 1.9MSF of space on 122 acres at the SEC of Houser and Estrella roads, east of Interstate 10 along the Union Pacific rail line. (AZBEX; April 14, 2023)

    Activity never got underway for the South Crossing Industrial Park, however, and now the company’s plan has shifted to develop the Southwest Crossing Data Park—a three-building data center development with more than 855KSF of building area and a 400-megawatt capacity.

    The request for rezoning from General Industrial to General Industrial with a Planned Area Development Overlay was recommended for approval by the Eloy Planning and Zoning Commission in its Jan. 15 meeting. The PAD was requested because data centers are not specifically listed as a permitted use. The planned project will also need minor amendments to development standards, such as building heights, making PAD the best fit for the site.

    Updated Proposal Tackles Concerns, Promotes Benefits

    Data center developments have been somewhat controversial in some circles, and the submitted project narrative makes an effort to address those concerns.

    The 122-acre site is currently used for agricultural purposes and is surrounded by vacant land on three sides with either general industrial, light industrial or commercial zoning in place. The fourth side, to the west, is also zoned general industrial and includes an outdoor storage site.

    Water use has been a primary concern in data center development and land planning. Older style data centers required massive volumes of fresh water for their processor and facility cooling needs. Modern facilities, such as Ryan is proposing, require comparatively little.

    The project narrative says, “Historically, cooling was managed using open system chillers that used water for cooling then disposed of the water as its temperature and mineral solids increase. Modern systems closed-loop chillers, like the one to be proposed for this Project, use water, but recycle it through integrated cooling equipment, thereby virtually eliminating the need for water disposal.

    “Emerging data processing technology, such as those used for artificial intelligence, requires even more advanced cooling systems that are virtually, if not completely, waterless. Because the end-user and the type of data being processed are currently unknown, this Project is committed to the closed-loop low-water cooling technology, and the average daily water usage for any Data Processing & Hosting Services used on the Property is limited to an average daily water demand of 219,600 gallons per day as provided in the Water Basis of Design, dated November 12, 2024 and submitted with this application, except as may otherwise be approved by the City Engineer at the of site plan approval.”

    It goes on to stipulate Arizona’s dry, arid climate is a factor influencing the proposed site’s design and operation and pledges, “… the property owner and developer have committed to using methods that limit ground, surface, delivered, reclaimed, captured, or effluent water in the control of the servers, electronics, electrical and mechanical, etc. temperatures.”

    An economic and impact analysis prepared by Elliot D. Pollack and Company shows an impressive degree of financial potential associated with the project. Based on the site’s potential for a center of up to 1.25MSF, the study predicts total construction costs of $687.5M, impact fees of nearly $1.8M and more than 4,800 direct construction jobs. Once in operation, the facility could generate more than $5.6M in direct taxes annually.

    According to the rezoning submittals, the property owner is Cotton City Industrial Park, LLC. Ryan Companies, Inc. is the developer. The civil engineer is Colliers Engineering & Design. Bergin, Frakes, Smalley & Oberholtzer, PLLC, is the land use law firm representing the project.

    A Significant, but Understandable, Direction Change

    While Ryan has a solid history with warehouse and manufacturing development, including speculative projects, the pivot for Southwest Crossing seems logical, given recent market trends.

    There is certainly still activity in the 1MSF-2MSF industrial development space, but the heyday for those project announcements and starts was in the post-pandemic boom of 2021-2022, when everyone was rushing to fill supply chain demand.

    The market raced to get those projects designed and built, resulting in a glut of deliveries and hundreds of millions of square feet in the planning/design/preconstruction stages. Even with a dedicated marketing and leasing team, it is possible Ryan may have had difficulty lining up tenants for such a major development in Eloy, which only shows three other industrial developments in the DATABEX project database. Of those, one is a recycling facility, and another is a master plan with no specific projects named.

    Despite seeing exceptional growth in logistics and manufacturing industrial projects in the past several years, Southwest Crossing will be the first major data center project in Pinal County. Only one other project—the Sunhill Master Plan development in Florence—has data centers as a potential use, and that project has yet to move to concrete plans.

    Data centers, on the other hand, are still heavily in the boom stage of the cycle due to extensive growth in artificial intelligence and related data processing demand.

    Pinal May See More Data Centers as Mesa Pulls Back

    Located roughly an hour from Eloy, Mesa has become a leading location for data center development, to the point local officials have discussed shifting economic development efforts away from the project type to focus on and encourage more employment-intensive land uses as large site availability becomes scarcer.

    Since its launch in 2016, DATABEX has recorded Mesa as home to 19 planned data center development projects, with only one cancelation. Of those, three are listed as in design; two are in design/plan review, and four are in pre-construction. Taken together, those nine projects total more than 8.4MSF of space and nearly $5.5B in estimated construction costs.

    Four major data center projects have been completed. Another five—totaling more than 4MSF of space and an estimated $2.4B in construction costs—are currently under construction.

    As Mesa builds out, that growing scarcity of land and the shift in economic development focus could be drivers for more data center developments looking to land in Pinal County.

    Bergin Frakes Smalley & Oberholtzer Colliers Engineering & Design Cotton City Industrial Park Data Center DATABEX economic impact Elliot D. Pollack and Company Eloy Planning and Zoning Commission general industrial Industrial PAD Planned Area Development Private rezoning Ryan Companies South Crossing Industrial Park Southwest Crossing Data Park water usage
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