Shortly after homesteaders (including the notable Charles Trumbull Hayden) established what is now Tempe, the community quickly became known as the trade center for the south side of the Salt River Valley. And ever since, Tempe continues to prevail as a bustling economy-driving powerhouse. With staples such as Tempe Town Lake attracting 2.4 million visitors and accumulating close to $2 billion in economic impact since its opening, combined with newer endeavors like the $1.8 billion mixed-use South Pier Project, the city shows no signs of slowing its economic roll.
So what makes this modern-mixed-with-old-school-charm locale persist in attracting talent, business and bankroll for the local, regional and state economy?
“I would say in Tempe, we’ve always been known for our innovative spirit,” says Corey Woods, mayor of Tempe. “There have been mayors and city council members from decades past that had a vision for what the city could become. And so, I think a lot of what you’re seeing is the culmination of all of those efforts from 10, 20, 30 and 40 years ago, all taking place right now, which is really exciting.”
The collective foresight of Woods and his predecessors has indeed established an infrastructure conducive to cultivating a strong presence of staple industries throughout the municipality. Among the strong sectors fueling Tempe’s economy are advanced business services, advanced manufacturing, technology, healthcare and biotechnology, and tourism.
Woods explains that having a built-in workforce pipeline courtesy of renowned institutions such as Arizona State University and the Maricopa Community Colleges District, coupled with a solid transportation network is largely to thank for Tempe’s economic ingenuity. “We graduate so many people with bachelor’s, master’s and doctoral degrees,” he says, “which is huge for our current employers and our prospective employers because they see a constant talent pipeline within our community. And that makes us very attractive for companies of all sizes to want to be in.”
According to Woods, almost 20% of Tempe’s residents have postgraduate degrees — which is substantially higher than Maricopa County or the entire state.
And as for transportation, Woods relays that because Tempe has a “true multi-modal transportation system,” it’s beginning to resemble communities like that of Chicago or Washington D.C., that cater to those seeking ways to get around the city sans single-use automobiles.
In addition to enabling easy access to the I-10, Loop 101, Loop 202, US60, I-143 and I-153, Tempe is a mere 10 minutes from Phoenix Sky Harbor International Airport, has 365-day bus service (including Free Orbit shuttles connecting the ASU campus, downtown Tempe and neighborhoods) and the Valley Metro Rail line linking Tempe, Phoenix and Mesa. And soon, the city will be the only Greater Phoenix Metro city to have a streetcar.
Cyclists, too, embrace Tempe’s American Bicyclist gold-Level Bicycle-Friendly Community Award status; currently, the city boasts the highest percentage of bicycle commuters in the country.
It’s important to note that while Tempe’s solidified workforce, education and transportation systems draw major development interest, projects like South Pier add dividends back to these silos. “You’re talking about $12 million that the developer is stipulating to build a pedestrian bridge by Tempe Town Lake,” Woods says, “and over $10 million going to the Tempe Coalition For Affordable Housing, which is our affordable housing non-profit that the city of Tempe manages. And, $250,000 going to our Tempe Education Foundations, to support our students and our educators.”
South Pier will also impart $2 million toward landscaping, according to Woods.
Accompanying South Pier’s economic contributions is the Novus Innovation Corridor, a public/private partnership between Arizona State University and developer Catellus Development Corporation which includes the 2.1-million-square-foot Marina Heights project and $307 million in renovations of Sun Devil Stadium, generating 34,000 projected jobs upon completion.
As for Tempe’s future economic enterprises, “The outlook’s bullish right now,” says Robert Cortazzo, Southwest division president, Tempe-based Adolfson & Peterson Construction.
“The only concerns we have are when we talk at the senior level or what types of impacts inflation or other external factors can have.”
Cortazzo further explains that inflationary pressures are prompting concerns, “Some of our more sophisticated clients are looking at ways we can share that risk with them and have the ability to move forward with projects,” he says. “I think the interest rate increases might have an impact on some of the multifamily and other projects that we’re seeing that are finance-based. So there seems to be a rush right now for clients to get their projects under contract and started.”
But, despite inflation-related challenges and demand for talent outpacing supply, Tempe’s development and redevelopment efforts endure.
“We’re currently on track to getting a cool project at the Hayden Flour Mill,” Woods says. “We entered into negotiations about probably six or so weeks ago with Sunbelt Holdings and Venue Projects, to redevelop the Flour Mill.”
The Hayden Flour Mill currently resides on a five-acre property that Woods describes as a befitting locale for food and beverage concepts and open space and event space. “It’s arguably the most iconic site in the entire city, given the fact that Hayden Flour Mill is where Mill Avenue got its name,” he says.
As development in mixed-use and retail — as timely examples — ramp up, prioritization of workforce housing opportunities is top-of-mind for Tempe. “Tempe is known for being a very diverse, inclusive community. And you can only remain so if you have housing for people of all different backgrounds, income levels and occupations,” Woods says.
In 2018, a Market Study and Affordable Housing Context report demonstrated, “Based on Citywide household growth projections through 2040, an additional 21,324 housing units will be required to accommodate households across income categories.”
The study findings are what Woods notes as “the impetus for why the council in January 2021, passed what’s known as the Hometown For All, affordable housing strategy. Which is really to generate additional revenue for the purpose of doing more property and land acquisitions in the City of Tempe, to create more affordable housing.
“We are actively out acquiring land,” Woods adds. “We purchased the biggest one, probably to this point, which was the old Food City site [formerly] owned by Michael Pollack, at the corner of Apache and Dorsey at the end of December 2021, for approximately $10.6 billion. Eventually, that’s going to turn into affordable housing, as well as an affordable grocery store on the ground floor for the residents in that Apache Boulevard corridor.”
As for continuing to fuel the economy, Woods closes with a positive prediction:“Quite honestly,” he says, “I think that the best is yet to come for our city. And I would invite everyone to be a part of what we’re doing.”
