By Mark Carlisle
Future changes in technology will affect how all Arizonans live their lives. And with three tech companies investing in Goodyear and El Mirage over the summer and five investing this year, technology jobs will also shape life in the Southwest Valley in another way.
“If you bring in 1,000 new workers, they all have to shop, they all have to get groceries, they all want to go out to eat, be entertained, put gas in the car, something for the kids to do,” said Southwest Valley Chamber of Commerce President John Safin. “And that’s a huge help. And it all circles around because what money is spent here obviously translates to tax and helps the cities maintain parks to bring in the quality of life.”
The two big names announcing this summer they’d be building in the Southwest Valley are Amazon and Microsoft. These Fortune 500 companies and three other data center companies investing in the Southwest Valley this year — Compass Datacenters, Stream Data Centers and Vantage Data Centers — are far from the first tech companies in the Phoenix area.
CBRE’s 2018 Tech-30 report, which measures the 30 top tech markets in North America, ranks Phoenix as having the country’s sixth largest growth rate over the past two years in tech office net absorption, the rate at which tech companies entered the market against those that left.
In 2016 and 2017, Phoenix ranked 15th among the top 27 U.S. tech markets with a 10.9% increase in high-tech jobs. During the prior two-year period in 2014 and 2015, Phoenix ranked second with a 36.3% increase, trailing only San Francisco.
“The Phoenix market has quickly emerged as one of the top destinations in the Western U.S. for enterprise and cloud companies,” said Robert Kennedy, co-managing partner of Stream Data Centers. “A pro-business environment with a great sales tax incentive program, low risk of natural disaster and low latency to major markets on the West Coast, Midwest and Texas have fueled tremendous growth for this market.”
Mr. Safin noted some reasons why these companies are drawn to the Southwest Valley in particular in the Phoenix market.
“The Southwest Valley, just like the whole West Valley, there is a lot of room for growth, for one,” Mr. Safin said. “This is where all the opportunities are. This is where the opportunities , not just in the county, but the state and to some extent the entire Western half of the country. It’s all here.” He also mentioned natural and man-made amenities like sunny weather, hiking and biking trails, bodies of water, spring training and pro sports stadiums.
He said some incoming companies have had a representative reach out to the Chamber “to have third-party confirmation that what they’ve done in their research is accurate.” But he said the Southwest Valley didn’t need him to lobby for it to attract these companies.
“There’s no place on the planet like the Southwest Valley. So, everyone thinks that we’re wonderful even if I don’t tell them. But the proof is the fact that they’re here,” Mr. Safin said.
Mr. Safin also noted land in the Southwest Valley is priced competitively to other areas tech companies might consider and Arizona’s business-friendly nature.
Sureel Choksi, president and CEO of Vantage Data Centers, said this was part of what drew he and his company to Goodyear.
“This newest development in Goodyear is an ideal location for our customers due to its low power costs, rich national fiber-optic connectivity and the city’s supportive development processes,” Mr. Choksi said.
Another recent tech development farther west in the Southwest Valley is the planned “smart city” called Belmont to be developed near Tonopah and I-10. In 2017, Microsoft founder Bill Gates’ investment company purchased an $80 million stake in the 25,000-acre project, which aims to have high-speed communications infrastructure, autonomous cars and data centers. It aims to be a hyper-connected place fit for new companies to set up shop in. Mr. Gates no longer runs Microsoft but is still involved with the company.
Amazon, which already has a fulfillment center and a global operations center in Goodyear, will open a delivery station in Goodyear to power its last-mile delivery capabilities. Amazon already employs 1,100 people in Goodyear, and this delivery station is expected to add hundreds more.
Microsoft announced this summer it would build three datacenter campuses in the Southwest Valley — two in Goodyear and one in El Mirage to support the growing demand for cloud and internet services in Arizona and across the Western U.S. The centers will create more than 100 permanent high-paying jobs like mechanical engineers, electrical engineers, and datacenter technicians. Microsoft will also bring more than 1,000 temporary construction jobs to build the three centers.
Microsoft will soon begin construction on 279 acres of land south of I-10 and the Phoenix Goodyear Airport. Microsoft’s El Mirage center will be a 254,000-square-foot building on 150 acres.
Microsoft intends these centers to be among the most sustainably designed and operated in the world – powered with 100% renewable energy, largely through solar power.
“Arizona has been increasingly embracing the technology industry with a pool of growing talent, an affordable quality of life for employees, and as many 200 as sunny days a year making it an ideal location for investing in datacenters and solar power,” said Brian Janous, general manager of Energy and Sustainability for Microsoft.
Microsoft will partner with Arizona-based First Solar for the project.
“As an Arizona-based company and an American solar manufacturer, we’re thrilled to be powering these data centers, drivers of local investment and economic growth,” said Kathryn Arbeit, vice president of project development for First Solar. “This agreement with Microsoft demonstrates just how large-scale solar can unlock value for local communities that benefit not only from the generation of jobs but also from the tax revenues for the county.”
Compass Datacenters also announced plans to build in Goodyear this summer. The cloud-service company plans eight data centers totaling 1.8 million square feet on 225 acres near Bullard Avenue and Yuma Road. The centers are projected to be complete before the end of 2019.
Two more companies announced plans for Goodyear data centers earlier this year. Stream Data Centers acquired a 418,000-square-foot data center on 157 acres and Vantage Data Centers announced plans for a data center on a 50-acre site at Bullard Avenue and Van Buren Street.
“Arizona is becoming an increasingly attractive destination for high-tech companies, and this announcement is another great example of how economic development partnerships help our communities thrive,” said Jeff Guldner, president of APS, which is powering the Stream Data Center facility.
Mr. Safin noted that when companies bring in jobs, especially high-paying jobs, it spurs growth in other areas of the community.
“They’re all hiring hundreds of people. And when you have so many manufacturing jobs, technology jobs, any type of production like that, that goes through the entire community, where we need more people to work in restaurants, gas stations, more teachers. Some of the quality-of-life aspects of why we like our neighborhoods, our communities, that also has to expand to keep up demand.”
Among other qualities, Mr. Safin mentioned the Southwest Valley’s education infrastructure from K-12 schooling to community colleges and universities and the West Valley’s foreign trade zone, which eases import/export regulations.
He noted the region’s aerospace technology sector is another, between Goodyear, Buckeye and Glendale airports, Luke Air Force Base and aerospace companies like Lockheed Martin, Honeywell and even Raytheon in Tucson. Mr. Safin said the aerospace sector shows the region’s “forward thinking. A lot of (tech companies) they want to be at the forefront of whatever the next generation of tech will be, whether it’s artificial intelligence, self-driving cars, jetpacks—you take your pick on what it might be—they want to be able to do it. And because there’s a plate of conditions here (that) are suitable for that it also makes it advantageous and attractive to the tech companies.”