Located in the northwest region of Greater Phoenix, the City of El Mirage is home to approximately 35,000 people living within its 10-square-mile boundary. While El Mirage may be small compared to its neighboring municipalities, the city will soon be home to one of Arizona’s largest business parks. LogistiCenter at Copperwing will add more than 10 million square feet to the market upon completion. Phase 1 of the project broke ground April 19, consisting of two buildings totaling 566,602 square feet of Class A logistics space at the 961-acre site.
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“LogistiCenter at Copperwing’s end value will exceed $1.5 billion,” explains Alexis Hermosillo, mayor of El Mirage. “About 70% of El Mirage’s labor force travels to Central Phoenix or the East Valley for work, so establishing an employment center like LogistiCenter at Copperwing will provide new job opportunities that reduce commute time, pollution and improve the quality of life for our residents.”
Patrick Gallagher, southwest region partner for Dermody Properties, adds that over the past decade, major corporations have placed greater emphasis on streamlining how products ultimately end up in the hands of consumers, making distribution centers a key part of their supply chain management strategies.
Dermody Properties’ focus on logistics has led the company to build its LogistiCenter brand in key regions for delivering products, such as Dallas, Chicago and Southern California.
Here’s why the developer chose El Mirage for its first LogistiCenter in Arizona.
Gateway to the Northwest Valley
Greater Phoenix continues to be a hotbed of industrial development, thanks to a growing population, skilled workforce and a business-friendly environment. Indeed, Colliers recently released a first quarter 2023 report on Phoenix’s industrial market that found “the amount of product under construction hit a new high at 46.8 million square feet, while delivering 4.5 million square feet in the first three months of the year, and net absorption ended at 4.8 million square feet.”
El Mirage has benefited from the boom, according to Tom Doyle, economic development manager for the city.
“In 2017, there was around 150,000 square feet in a development cycle,” he says. “Today, we’re well over 2.8 million square feet, and went from five projects to 28.”
The nearby transportation infrastructure makes the municipality a prime location for logistics. State Route 60 crosses through the northern part of El Mirage, and its southern boundary is Northern Parkway, which provides convenient access to both the Loop 101 and Loop 303. Doyle notes that trucks leaving LogistiCenter at Copperwing will see about three traffic lights before being on the long stretch of highway headed to the Los Angeles area.
Gallagher adds that the West Valley has an advantage over the East Valley for logistics because of federal regulations on how long truck drivers can drive in a day.
“Truckers can go from Long Beach to Phoenix and back in one day, but if they have to go to the east side of town — that’s stretching it,” he says. “There’s certainly some large distribution centers going up in the East Valley, but that balance is heavily weighted towards the west side because of [drivetime mandates].”
El Mirage was a good location for LogistiCenter at Copperwing, Gallagher continues, for a few reasons. Along with nearby highways, the city has favorable labor demographics, which he says is critical for distribution companies. Epcor also recently increased water and sewer infrastructure capacity in the municipality.
“Why [did we choose] El Mirage? The combination of those three things — logistics, labor, access to water and sewer,” Gallagher explains.
LogistiCenter at Copperwing
Prior to Dermody Properties’ acquisition in late 2021, the 961-acre parcel was owned by the John F. Long Family Trust. Doyle notes that having such a large plot controlled by a single owner made the site an attractive option for development since the buyer didn’t have to deal with multiple landowners, as is often the case for large business parks in the West Valley.
The property is within an approved Foreign Trade Zone, meaning companies within the park that are active users of FTZ can receive up to a 72% reduction in real estate and personal property taxes. It also already had industrial zoning in place.
“[The land] was always identified as an industrial area,” Doyle says. “Because we’re so close to Luke Air Force Base, we have a lot of land-use restrictions in that area. We couldn’t put residential or anything with an overnight stay like a hotel. Having industrial not only met our standards, but also Luke Air Force Base’s.”
Gallagher adds that he personally knew some of the people involved with the John F. Long Family Trust for about two decades — relationships that helped the deal come together.
“We were reaching out to buy a smaller portion of the land, but they had come to the conclusion that they wanted to sell the entire parcel,” he says. “That was exciting for us, because 961 acres is a great opportunity because you control the destiny of the design for the entire parcel. I’ve personally wanted to put together a large, first-class, investment-grade corporate business park in Phoenix for the last 20 years, and we found the opportunity to do it.”
Creating a best-in-class business park starts with consistency in design and uses to maintain a professional appearance, Gallagher continues.
“We find that our tenants are the types of large corporations that want to be somewhere that speaks well for them from not only an image standpoint, but by providing a great workspace for their employees,” he says. “Just to the north of the property is a YMCA with daycare facilities, which will be a great amenity for employees of the park. We want corporations to be proud to put their name on the building.”