In today’s interconnected world, airports facilitate the flow of people and goods that are essential for society to function. Phoenix-Mesa Gateway Airport is a prime example of how these pieces of critical infrastructure are not only economic powerhouses in their own right — it contributes $1.8 billion to Arizona’s economy annually, according to the airport — but also generates further investment from companies. On Dec. 6, ULI Arizona hosted a panel discussion on the airport’s impact on the region, how the Innovation Zone at ASU’s Polytechnic Campus is growing and what lies ahead for the submarket.

Phoenix-Mesa Gateway Airport started as an airfield to support the military efforts during World War II before becoming Williams Air Force Base in 1948. At the end of the Cold War, U.S. military strategy shifted, leading to a base realignment process. The Air Force base closed before reopening in March 1994 as Williams Gateway Airport, but with different boundaries than before.

“There was a huge community planning process that took place,” explains Lori Collins, director of business and economic development for the Mesa Gateway Airport Authority. “ASU was granted property through the closure process, as was Chandler Gilbert Community College and the Gila River Indian Community. A little chunk was broken off for [the U.S Department of Housing and Urban Development], which is run by the House of Refuge today.”

Three decades later, Phoenix-Mesa Gateway Airport serves about 2 million passengers primarily through Allegiant and Sun Country Airlines in an 11-gate passenger terminal. The airport also recently completed a five-gate expansion totaling 30,000 square feet.

“We have 60 businesses on site, including a who’s who of private aviation — Cessna Citation, Embraer and Gulfstream, which just opened,” Collins continues. “We have about 1 million square feet of private development that has just finished or is under construction, and we still have about 700 developable acres to go. We’ve just hit our stride, and the sky’s the limit.”

Education And Collaboration  

After Williams Air Force Base was closed and pieces of the original parcel were granted to other entities, ASU used its allotment to open the Polytechnic Campus in 1996. In the almost 30 years since its opening, the Polytechnic Campus has emerged as a hub for engineering in the Southeast Valley.

Chandler Gilbert Community College’s Williams Campus was also born from the division of the Air Force base’s original acreage and houses a FAA-certified aviation maintenance program. The proximity to both the Polytechnic Campus and Chandler Gilbert Community College gives the Phoenix-Mesa Gateway Airport unique educational assets that are hard to find elsewhere.

“Businesses that want to locate at the airport are always eager to learn more about ASU and the Polytechnic Campus because it’s a hands-on learning environment. They see that as a differentiator,” Collins says. “We’ll have companies ask for a tour, and they’ll start talking about what car to take until I tell them we’re just walking across the street, and they’re blown away.”

ASU understands the mutually beneficial nature of having businesses near its campuses, which is why the university designates Innovation Zones, which are “place-based opportunities for companies to co-locate with ASU, either in a strategic location such as SkySong or adjacent to a campus, to tap into the university’s innovation and talent,” explains Denise Christensen, director of real estate development at ASU.

At the Polytechnic Campus, a $185 million building is under construction that Christensen says will function as a gateway between the campus and the Innovation Zone. Currently named Interdisciplinary Science and Technology Building 12, it will represent a $250 million investment when factoring in equipment and machinery.

“Overall, the Innovation Zone is going to be about 300 total acres,” Christensen continues. “We’re deep into the details of refreshing our master plan, but right now we’re looking at phase one, which will be about 160 acres and ready for development very soon.”

Ripple Effects 

As the very land that Williams Air Force Base was built upon is transforming to meet the needs of the 21st century, the surrounding region has also turned into a powerful economic engine for the City of Mesa and the region at large.

According to Mesa’s Economic Development Department, the Mesa Gateway area is a 35-square-mile submarket that is ideal for aerospace, aviation, defense, semiconductors, electric vehicles, battery technologies, as well as large industrial users, manufacturers, research and development, and educational institutions.

Jackie Orcutt, senior vice president at CBRE, recalls that when she started working in the region in 2017, the only industrial-related projects were at Phoenix-Mesa Gateway Airport or very close to it.

“There was under 2 million square feet total in the submarket,” she continues. “Today, we have 27.5 million square feet [of product] with another 2.9 million square feet under construction. The rate of growth over the last five years in Mesa Gateway is 256%.”

As far as what sort of businesses are scoping out the submarket, Orcutt says that she and other CBRE brokers have collected data on the types of companies taking tours and what their requirements are.

“As of October 2024, there are just under 15 million square feet of tenants in the market looking at the Southeast Valley,” Orcutt says. “Almost half of those tenants are tied to manufacturing. That’s the biggest trend that I’ve noticed. Manufacturing has always been huge near Mesa Gateway because of the highly educated and young workforce that want to work at these types of companies, and businesses know that.”

That said, the vacancy rate for industrial in Mesa Gateway is 43.3%, which Orcutt says is among the highest in the nation.

“But I’m not freaking out about it, and thankfully, a lot of my clients aren’t either because demand has been really robust,” she concludes. “Where we’ll see some struggle over the next 18 months are with smaller buildings. If you’re in the market for 100,000 square feet, there are plenty of options to choose from. But if a business is looking for more than 200,000 square feet, there’s not much left.”    – more at azbigmedia.com