Here’s how transportation is the road to economic development wins

Real Estate | 13 Nov |

Dr. Emmet Brown (“Back to the Future”) may have once said, “Roads? Where we’re going we don’t need roads.” But here in Arizona, not only do we need roads — we need expanded and improved roads. We also need rail and air transportation. And we need them all to support the deluge of economic development across the state. And, while the Grand Canyon State’s economic developers may not have a time-traveling DeLorean at their disposal, they do have the expertise to help forecast and prepare what’s needed for the roadways and railways ahead.

“The Valley freeways have been well-planned and produced incredible results in terms of economic development,” says Carrie Kelly, executive director of the Arizona Association for Economic Development (AAED). “From Taiwan Semiconductor Manufacturing Company (TSMC) and Amazon warehouses to Intel’s expansion and the biosciences, the Phoenix Metro area infrastructure investments have paid incredible dividends.”


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Of notable investments are the $230 million announced by Gov. Doug Ducey in Feb. 2022, allocating “$33 million to rebuild and widen the Gila River Bridge on Interstate 10 between Phoenix and Tucson; $41 million to widen U.S. Route 93 north of Wickenburg; $40 million to add capacity to Interstate 17 north of Metro Phoenix; and $117 million to improve more than 600 highway lane-miles across the state.”

Proposition 400, initially approved by voters in 1985 and extended in 2004, has done its part to upgrade crucial Arizona roadways. For example, the extended half-cent sales tax dedicated to transportation mandated by Prop 400, was forecasted to generate an estimated $19 billion over 25 years. And while there were hopes for another extension approved by voters in November, Gov. Ducey’s veto means opportunities to further extend the half-cent sales tax will have to wait for now.

Investment in economic future

“An extension of Prop 400 would allow Maricopa County residents to pay for the much-needed infrastructure expansion and improvements that attract business locates and growth projects,” Kelly says. “While businesses throughout the state use the freeways and roads in Maricopa County, the expansion of Valley businesses is also good for rural Arizona.”

Adds Charles E. Reynolds, senior principal and senior client development manager at Rocky Mountain Division of Terracon, “Prop 400 extension will keep a designated pool of funds available for the continued expansion and modernization of transportation infrastructure and maintain mobility in the largest economic driver for the state.”

While the fate of the Prop 400 extension hangs in the balance, Arizona will be able to reap the rewards of the $1.2 trillion Bipartisan Infrastructure Framework to include:

• $8.2 billion for Arizona roads, bridges and transit

• $9 billion for water infrastructure projects for urban, rural and tribal communities

• $58 million for “middle-mile” broadband infrastructure deficiencies throughout Arizona

“These infrastructure improvements mean funding for projects like I-10 expansion, I-11, light rail extensions and streetcars to improve on-time delivery,” Kelly explains. “Increased transit funding will help get workers and students from place to place on more efficient time schedules in urban and rural Arizona communities.”

As Arizona’s population proliferates, the need for transportation improvements and expandable infrastructure only becomes more critical.

“Businesses consider transportation, internet connectivity, water and adequate electrical supply as some of the key factors when looking at expansion or locate opportunities,” Kelly says. “Infrastructure allows for the rapid movement of supplies into the production line, the workforce to be more productive, and on-time delivery of product.”

In Pinal County, James Smith, economic and workforce development director, points to the necessity of widening the I-10 — where the highway is reduced to two lanes between Casa Grande and Chandler — as an example of refining productivity and continuing to support a growing location.

“It’s really important to get that [area] to three lanes, and the governor allocating funds in the latest budget is critical for that to happen; we’re really depending on that widening,” he says. “And again, we think that the enhanced access between the Valley and California will continue to make us attractive for economic development.”

Back to the future, railway style

Of course, while road improvements, as well as airport renovations and expansions — such as what we’ve seen with Phoenix-Mesa Gateway Airport — continue to expand economic development possibilities, another essential transportation medium can’t be overlooked: rail.

“Everyone sees the increased demand for logistics and freight facilities in the area with demand soon to outpace facilities in the region,” says Peiter Hjertstedt, regional manager of economic development for BNSF Railway Company. “BNSF has a proven history of successful developments which help handle growth in a way which enhances investment, job creation and increases state and local revenue while helping to reduce highway congestion and make the most out of public investment in roadway infrastructure.”

In April 2022, BNSF announced its acquisition of a 3,508-acre piece of land in the West Valley for $49.1 million, with plans to develop it as its western hub.

“This West Valley property, immediately adjacent to our existing rail line, became available and BNSF determined it could be a good long-term investment,” Hjertstedt says.

But the West Valley isn’t the only portion of Metro Phoenix to capitalize on the state’s rail opportunities.

“It does seem like a number of the companies that have been looking at Pinal County over the last few years have been very interested in rail,” Smith says. “And the area in Casa Grande near Lucid, has excellent rail access, as does the inland port in Coolidge.

“I think the fact,” Smith continues, “that we have good rail service in those areas has been a very good selling point. And in fact, the [Union Pacific] line runs through Eloy as well. I think it’s been a huge asset and something that has definitely had companies interested in Pinal County.”

Ultimately, as powerful as each independent transportation operation runs, together — combined with continued investments — Arizona’s transportation and infrastructure collective system is what attracts businesses near and far.

“Infrastructure that allows for the efficient movement of on-time goods and services is the lifeblood of nearly any industry,” Kelly says. “Rail, roads, broadband and adequate electrical supply are key infrastructure investments that businesses consider when moving to or opening in Arizona.”

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