"Arizona's Chandler airport expects to land big projects as south East Valley grows"

["Stephen Irwin" <stepheni@xxxxxxxxxxxxxxxxxxxxxx>]

Sunday, April 24, 2005

Chandler airport expects to land big projects as south East Valley grows  
By Lynn Ducey
The East Valley (AZ) Tribune 


Chandler Municipal Airport used to be an out-of-the-way jaunt. But with the
construction of the Santan Freeway stretch of Loop 202 creating a northern
entranceway, the airport and its surroundings are about to become the newest
hot spot for commercial development. 
 
"There's tremendous opportunity out here," said Tom Guilfoy, president of
Tailwind Flight Centre, a private flight school at the airport. 

While the airport and its surroundings were long ago identified by city
leaders as a potential boon, large-scale development has just begun. 

Cardinal Health broke ground earlier this year on a 300,000 square foot
distribution facility on 28 acres near the airport. 

Ranked 14th on the list of Fortune 500 companies last year, the Dublin,
Ohio-based health care firm is expected to create about 150 jobs initially. 

The warehouse will supply East Valley hospitals with medical equipment. 

Officials say the firm's arrival will only add to the economic clout already
being generated by the airport and surrounding businesses. 

According to a Chandler study, commerce at and around the airport will have
an economic impact of almost $54 million this year, with 778 jobs creating
payrolls that total $22.4 million. 

Compared to studies conducted in 1998, the results "represent a 364 percent
growth in total economic impact, a 440 percent increase in payroll and a 316
percent growth in jobs during the last seven years," said Jim Phipps,
Chandler spokesman. 

And now, the airport and its surrounding land have the eye of real estate
analysts, who see the region as an area prime for office, industrial,
warehousing and retail development. 

According to CB Richard Ellis' annual Marketwatch analysis of the Valley's
commercial real estate scene, the Chandler airport area "will see increased
activity from the expansion of the freeway, becoming one of the Valley's
next big industrial markets." 

"I think CB Richard Ellis is right on," said Becky Jackson, president and
CEO of the Chandler Chamber of Commerce. "We've got a great opportunity for
this hot spot and we ought to jump on it." 

According to the report, about 15 million to 17 million square feet of
industrial space is expected to be built this year. While new space will be
added to the market, analysts say the vacancy rate in industrial space
across the Valley will drop to about 7 percent this year. That's a
significant change from the second quarter of 2003, when the vacancy rate
hovered at about 19 percent, the report said. 

With higher occupancy rates and a continued demand for space, CB Richard
Ellis analysts say those changes mark a shift from a tenant to a landlord's
market. 

Although the office space market showed a marked contrast from its
industrial counterpart - with vacancy rates at about 16 percent last year -
"tenants looking for quality space were impacted by a lack of options in the
market," the report said. 

But a new project north of the airport will add to the region's offerings
and perhaps appeal to businesses looking for prime office and industrial
space. 

Real estate developer Bill Lund said he hopes to break ground later this
year on Chandler Airport Center, a 240-acre mixed-use office, industrial and
retail development just south of the new freeway near the soon-to-be Cooper
Road exit. 

"We acquired the property in 1997. We looked to the future and felt that
with the freeway coming, that would be a very good location," Lund said. 

Lund and his Canyon Oaks Estates partnership also is developing the San Tan
Motorplex in Gilbert and the Spectrum at Val Vista, a large residential and
retail project on both sides of the new highway's exit at Val Vista Drive. 

While Lund said he hopes to have retail along Cooper Road, "the balance of
the properties will be developed as office." 

"We have three major office building developers who've approached us. We
have four other developers who do multi-tenant space, hi-tech space and
light industrial," Lund said. 

While the new freeway is critical in providing access to both customers and
employees, new residential development also is creating an impetus for
business to be located closer to their workers, Lund said. That's generating
a buzz about his project. 

"We have some large service companies, insurance companies that have been
looking at it. Whether they will come on board is anybody's guess," Lund
said. 

Once built out, Lund said his project could be home to about 10,000
employees. 

Chandler Airport manager Greg Chenoweth said the highway is a big push in
spurring on development around the airport, including Lund's project. 

"We didn't have a freeway up until a little bit ago and we didn't have any
development. So, you can make your own decision about its importance,"
Chenoweth said. 

Chandler's City Council just approved the overall scope of Lund's project at
its April 14 meeting. 

Tailwind's Guilfoy said he wishes existing businesses at the airport would
attract as much attention from city leaders. Guilfoy owns the flight school
with his father, Thomas J., and he also is a Scottsdale Airport
commissioner. 

Different sets of development rules apply to businesses located on airport
property, which is city-owned land that's leased to companies such as his,
and off-airport private property, he said. He and his father have run into
inflexible and arcane rules as they've tried unsuccessfully to expand their
growing business, he said. 

"The city has done a tremendous job focusing on building the infrastructure
- the roads, the sewers, the highway - but they've neglected the crown
jewel. The airport," Guilfoy said.


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