Most development activity in Phoenix is occurring in the city’s core—a marked shift from the past frenzied development of single-family housing on the edge of town.
Phoenix, the country’s favorite boom town, remains among the fastest-growing U.S. cities in terms of both economic performance and population. Metropolitan Phoenix, which ranks as the country’s fifth most populous city, is home to more than half of Arizona’s residents. Its population—estimated at 1.58 million as of October 1, 2010—is projected by the U.S. Census Bureau to grow at nearly twice the national rate for the next couple of decades. There is plenty of room for that growth, with over 514 square miles (1,331 sq km) of land within the city boundary, 50 percent of which is undeveloped.
The most recent population statistics and trends, coupled with the availability of developable land, all but assure developers that the beleaguered Phoenix housing industry will eventually make a comeback and that it quite possibly will be a robust one. But today it seems that the current recession may have bestowed a lasting and rewarding gift upon the city. The crushing blow to the housing market has shifted development and economic activity previously centered on single-family housing on the edges of the city to development driven by employment, land uses, and economic activity concentrated in downtown Phoenix. This development renaissance has transformed the downtown core into a growing and vibrant economic center, and much more development is underway.
Four major catalysts have driven the ongoing revitalization of downtown Phoenix:
Arizona State University (ASU), one of the largest universities in the nation, recently expanded its campus to the middle of the downtown core;
a 28-acre (11-ha) biomedical campus recently established on the eastern edge of the downtown core plans more than 6 million square feet (560,000 sq m) of research, academic, and clinical facilities;
the Phoenix Convention Center recently underwent a $600 million expansion to triple its size; and
a light-rail system began operating in December 2008 serving downtown and metropolitan Phoenix.
Arizona State University’s downtown campus continues to grow and provide jobs, activity, and foot traffic for the downtown core. More than 7,500 students are expected to attend classes at the downtown campus this year. An 84,000-square-foot (7,800-sq-m) nursing college that opened last year will be joined this year by both a redeveloped hotel site that will house ASU’s College of Law and a redeveloped post office building that will house student union and other university functions. At buildout, the campus will serve more than 15,000 students.
The downtown campus will be complemented by the Phoenix International School of Law, expected to locate on the western edge of the downtown core on the historic Grace Court Elementary School campus. These universities will provide steady foot traffic and after-business-hours activity downtown.
Phoenix also continues to expand the biomedical campus on the eastern edge of the downtown core. Development plans will begin this year for up to 1.13 million square feet (105,000 sq m) of research and patient care facilities. At buildout, the biomedical campus will house the highest concentration of research scientists and facilities in the region. The campus includes several institutions, including the Translational Genomics Research Institute, the International Genomics Consortium, the National Institute of Diabetes and Digestive and Kidney Diseases, the University of Arizona College of Medicine, the Arizona Biomedical Collaborative, VisionGate, and the Phoenix Union Bioscience High School.
The Phoenix Convention Center, which underwent a $600 million expansion completed in 2009, is now served by a new 1,000-room Sheraton hotel, as well as the nearby 693-room Hyatt hotel and the 532-room Wyndham hotel in the middle of the downtown core. Also, a proposed 250-room Palomar hotel recently obtained financing to allow an opening late this year in CityScape, a new mixed-use development near the convention center; it will be the first four-star luxury boutique hotel in downtown Phoenix. In addition, Starwood Resorts is constructing a 240-room Westin hotel in the new Freeport-McMoRan Copper & Gold office building, located adjacent to ASU’s downtown campus, and the Luhrs hotel site, within walking distance of the convention center, will be redeveloped to add 315 hotel rooms sometime in 2013.
Phoenix has also recently seen the opening of two new office developments downtown:
the Freeport McMoRan Center, home of its namesake corporation as of June 2010 and the under-construction 240-room Westin hotel; and
CityScape, located in the heart of downtown and including fully leased office towers, underground parking, retail shops, and restaurants, all completed in 2010, as well as the soon-to-open Palomar hotel. CityScape provides a destination for visitors to the convention center and downtown hotels, as well as a variety of retail and restaurant destinations for the growing number of new office workers and students in the downtown core.
The recession has also allowed the city to plan for future downtown development. It recently acquired four parcels of land from a foreclosure sale with a combined area of 49,000 square feet (4,550 sq m) and located at a key future light-rail transit station site in the downtown redevelopment area. Phoenix also recently obtained an option on another four acres (1.6 ha) of prime downtown property. These acquisitions will allow the city to work with developers through public/private partnerships to create high-quality developments in the downtown core.
Most development activity in Phoenix is occurring in the city’s core—a marked shift from the past frenzied development of single-family housing on the edge of town. This renaissance of employment-based downtown development is supported by an educated and rapidly growing population, existing infrastructure, the availability of an abundance of developable land, and the reintroduction of relatively affordable housing to support the new economic activity. Although the housing market continues to struggle, rising population and employment continue to drive economic growth in Phoenix.