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[SCOOP] Google, manufacturing growth and Opportunity Zones — Mesa Economic Development Director Bill Jabjiniak gives the lowdown

Posted by   /  July 11, 2019  /  No Comments

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Bill Jabjiniak

By Mike Sunnucks | Rose Law Group Reporter

Mesa has just landed a $1 billion Google data center, approved a Class A office development next to the Chicago Cubs and landed a 150,000-square-foot lease at that space from benefits from WageWorks. That will bring 1,000 jobs to the planned development called The Union.

We caught up with Mesa Economic Development Director Bill Jabjiniak to get the low down on site selections, prospects and what’s on the horizon in the East Valley. Jabjiniak is seeing an upswing in manufacturing interest in Mesa and hopes Opportunity Zones tax break will spur more locates and investment.

What kind of economic development prospect mix are you seeing right now in terms of industry, sector and number of jobs?

“In terms of the industry segments within which our prospects operate, 38% are manufacturing companies. Technology companies make up 10% with healthcare at 4%, which aligns with our targeted HEAT industries (Healthcare, Education, Aerospace, Technology).

In terms of the types of facilities or buildings for which our prospects are looking to occupy or construct, 46% are manufacturing with advanced back office, warehouse, and corporate headquarters combined at 27%.”

Anything surprising on this front?

“Industry types have remained consistent over the last year, but we’ve seen a big increase in demand for manufacturing facilities and data centers.”

What kind of workers and real estate space are they looking for?

“In terms of in-demand real estate spaces, we’ve seen a 46% increase in the demand for manufacturing facilities and strong interest in real estate for advanced back office, warehouse, and corporate headquarters. As we land these prospects in Mesa, these companies are looking for highly trained manufacturing workers, engineers, and managers; well-educated office professionals; and logistics personnel, among others.”

Has this year’s prospect and site selection differed at all from previous years?

“Compared to previous years, manufacturing is really picking up. Developers have recognized this trend. Since January 2018, more than 30 industrial buildings, consisting of nearly 2.5 million square feet, have been constructed, are under construction, or are currently in the entitlement process in the City of Mesa. Many of these projects are in Mesa’s Opportunity Zones.”

What’s the biggest asset you are touting about Mesa right now?

“Mesa has many strategic assets that play a large role in companies’ decision-making processes including the new Union development, Falcon District, Elliot Road Technology Corridor, Pecos Advanced Manufacturing Zone, and SkyBridge Arizona at Phoenix-Mesa Gateway Airport to name a few. An asset we’ve been promoting recently and has drawn significant attention is Mesa’s Opportunity Zones program.

City of Mesa’s Opportunity Zones are part of a federal program designed to spur investment by providing tax benefits to investors who hold their investment between five to ten years. Most of the Mesa Gateway Area, the Falcon District, Downtown Mesa/West Main Street, and a portion of the Fiesta District are bounded within Opportunity Zones and provide real tax savings for companies looking to invest in these areas.”

What is the biggest challenge Mesa faces right now in landing jobs and employers?

“One of Mesa’s biggest challenges was the lack of large foot-print industrial space and insufficient available Class A office space. Today, we are seeing this change.

As mentioned earlier, more than 30 industrial buildings, consisting of nearly 2.5 million square feet, have been constructed, are under construction, or are currently in the entitlement process in the City of Mesa. Moreover, two new significant Class A office projects have recently been announced – Union in July 2019 and Gallery Park in November 2018. When completed, these two projects will create 1.75 million square feet of new Class A office space to Mesa – nearly tripling – the percentage of Class A office space in Mesa.

Companies are quickly absorbing this new office and industrial space, sometimes before building completion. For example:

INDUSTRIAL: In May, The Landing at PMG, a new industrial subdivision north of the Phoenix-Mesa Gateway Airport, announced three companies, Collabtech Group, Huesman Brothers Door and Custom Molding, and Russell-Sigler Inc., would be locating in the soon to be completed park.

OFFICE: In July, it was announced WageWorks would be locating their U.S. operations and 1,000 employees in 150,000 square feet of The Union, a 1.35 million-square-foot class A office complex that has yet to break ground.”

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