Project: Arizona Route 101

1.0 Synopsis

Arizona Loop 101 is a 62 mile beltway around the Phoenix metropolitan area.  The highway was planned through farmland to the west of Phoenix and desert to the east of Phoenix.  In response to plans for the highway, low density residential development, followed by entertainment, retail, office, and condominium “mega-developments” began to locate on sites near planned exits, transforming open space into high-density hubs of mixed use development.  Loop 101 has had the greatest impact where greenfield sites were most abundant and where sophisticated local planning organizations have pro-actively planned for large-scale commercial development, such as in Glendale and Scottsdale. The net employment impact of the highway is estimated to be in the region of 50,000 jobs, approximately half of the new employment in the corridor. 

2.0 Background

2.1 Location & Transportation Connections

Loop 101 connects the suburbs of Tolleson, Glendale, and Peoria, on the city’s west side with Scottsdale, Mesa, Temple, and Chandler on the eastern flank of the metro area. It is a typical suburban beltway connecting Phoenix’s outer suburbs, easing congestion on arterial routes, and providing a bypass around the city center.  The bypass connects with Interstate 10, providing access to Los Angles, and with Interstate 17, Arizona’s main north-south corridor.  

2.2 Community Character & Project Context

Phoenix, Arizona’s largest city, has experienced substantial population in-migration over the past few decades, which has attracted national developers of commercial and residential projects.  Arizona Loop 10l, a beltway encircling much of the Phoenix Metro area, was built to support the population growth.  Commercial and entertainment developments that serve the population have occurred in suburban areas along Loop 101.  dor.

3.0 Project Description & Motives

Construction of the $2.3 billion (2001 $) project began in the late 1980s and was completed in 2001.  The freeway has 62 exits, creating myriad development opportunities in the vicinity of interchanges.  Loop 101 begins as the Agua Fria Freeway west of Phoenix in Tolleson at the interchange with Interstate 10.  It heads north through Glendale and Peoria, where world class sports and entertainment centers have been attracted to sites along the Freeway.  It then travels east, providing access to the Arrowhead Ranch Planned Community and its thriving town center.

After crossing Interstate 17, fifteen miles north of downtown Phoenix, Loop 101 becomes the Pima Freeway.  It curves through Scottsdale, serving large corporations and medical facilities headquartered there.  It then turns south into the Salt River Pima-Maricopa Indian Community, where the freeway has attracted new development providing jobs and business opportunities for native people, including two casinos.   

After crossing Interstate 10, Loop 101 becomes the Price Freeway, passing through Tempe where it serves Arizona State University and the new ASU Research Park.  It terminates in Chandler, where it provides access to large regional shopping centers and multi-national companies concentrated in the Silicon Desert region that is centered in the Southwest Phoenix metropolitan area. 

Loop 101 first appeared on the plans for Phoenix’s transportation network in 1969.  However, it was not funded until 1987, when a 0.5% county-wide sales tax was passed to financed Loop 101 and Loop 202, to which it connects southeast of the city.  The sales tax funded nearly 60% of the project.  Another 18% came from state gas taxes, and the remaining 24% came from federal sources. 

Loop 101 was a typical inner-urban orbital beltway designed to bypass congestion on radial routes through the metro area by providing a direct connection between the outer suburbs.  The intent was to connect the rapidly-developing bedroom communities in the East Valley with the suburban employment centers to the west in Tempe, Chandler, Gilbert, and Scottsdale.  The freeway has attracted commercial development to the east suburbs as well, which began to develop their own employment centers.  

4.0 Project Impacts

4.1 Transportation Impacts

4.2 Demographic, Economic & Land Use Impacts

The Phoenix metro area has experienced rapid growth since Loop 101 was initially funded in 1987.  During the 18 years that spanned the design and construction of Loop 101, the population of the Phoenix Metro Area grew by 90%, adding 1.8 million more residents by 2006.  Over the same period, the population of the rest of Arizona grew by 66% (less than a million people.)  Population density in Phoenix, which is now home to 65% of the Arizona’s residents, averages 410 people per acre, compared with just 54 people per acre in the rest of Arizona.

During this same period, over 1.1 million new jobs were added to the Metro Phoenix economy, compared with just 450,000 new jobs in the rest of the state.  By 2006, nearly three-quarters of Arizona’s jobs were in Phoenix.  Although the number of jobs in Phoenix doubled from 1987 to 2006, income growth in the metropolitan area did not keep pace with state average income growth.    

In 1987, when acquisition of needed sites for Loop 101 commenced, most of the East Valley through which the road cuts was farmland.  The North was somewhat more developed, with planned suburban residential neighborhoods.  The East Valley corridor of the Pima Freeway was mainly desert land as was the stretch running through the Pima-Maricopa Salt River Community.

The development along the corridor was driven by regional demographic and economic factors.  Loop 101 gave shape and structure to this development and supported projects of a much larger scale than would have been possible without direct freeway access to accommodate the large volumes of traffic generated by the many super-regional “mega-projects” that line the Loop 101 corridor.  The local government entities in the Loop 101 corridor designated sites near the 62 interchanges along the freeway for regional commercial development and adopted new zoning to accommodate it.  Concentrating high density, volume-traffic generating uses along the freeway allowed them to preserve open space and desert for community use. 

The highway has attracted substantial investment in sports and entertainment complexes, including new facilities for the National Hockey League’s Phoenix Coyotes and the National Football League’s Phoenix Cardinals.  Four Major League Baseball teams have built spring training facilities in close proximity to Loop 101, investing millions of dollars in these developments.  These sports venues are supported by new retail and hotel development.  Over 1,700 new hotel rooms have been created throughout the corridor.  The corridor also serves a new equestrian, auto and music events center with an arena and stadium.  Two new casinos and golf course have been built on the Salt River Pima Maricopa Indian Reservation, through which the highway passes.

Over 9,145,000 square feet of new retail development has occurred in the Loop 101 corridor since planning for the highway began.  These projects range in size from a 180,000 square foot shopping center to a 1.1 million square foot big box power center to a 2.5 million square foot fashion mall.  The retail development serves the burgeoning population in the corridor, much of which is accommodated in new planned communities.  The Desert Ridge Mastered Planned Community in North Phoenix, which includes a 1.2 million square foot shopping mall, exemplifies this trend.

Over 31.6 million square feet of office development has occurred in close proximity to Loop 101 interchanges since planning for the highway began.  Many multinational corporations, including American Express, Discover Card, Dial Corporation, and Intel now occupy new space in the corridor.  General Dynamics moved into 650,000 square feet of space vacated by Motorola.  In addition, over 6 million square feet of mixed use development has been built near the highway.  This new development helps support the retail and services businesses that have flocked to the corridor.

In Scottsdale, where Loop 101 bends south, the freeway has supported the expansion of Scottsdale Airport by improving intermodal connections for passengers and aviation-related  businesses, who have located nearby. This is one of the busiest single-runway airports in the nation, with over 200,000 operations in 2004.  The airport averages about 10,000 passengers a year.  

The Scottsdale Airpark Business Commerce Center began to develop in the early 1990’s in anticipation of freeway construction.  2,800 companies now occupy 28.5 million square feet of office, industrial, retail, and hotel space on Scottsdale Airpark’s 3000 acre site.   Over 50,000 jobs are based in the Airpark with salaries totaling $2.5 billion.  A development of this scale could not have been accommodated on a site without direct freeway access. 

In total, an estimated 100,000 jobs have been created in the Loop 101 corridor since planning for the highway began.  There are 27 major commercial development projects representing investment of over $100 billion whose location and scale has been influenced by Loop 101.  Tens of millions of dollars in tax revenues have flowed into local and state governments in the form of retail sales tax, property taxes, income taxes, and corporate taxes.  While some of the jobs and investment would have located in the greater Phoenix area regardless of the highway construction, it is clear that the magnitude of development in the corridor could not have been supported without freeway access.  It is estimated that approximately 50,000 jobs have been created in the corridor as a direct result of the access provided by Loop 101.

5.0 Non-Transportation Factors

There were numerous demographic, economic, regulatory, and political factors that spurred growth of the Phoenix metro area during the impact period under investigation --1987 to 2006.   The project was built during a time when many people and corporations were relocating to the Sunbelt.  Sports teams such as the Cardinals and Coyotes would have located in the Phoenix region without the highway, but may have chosen different locations.  Many of the communities along the freeway have well-staffed, sophisticated planning staffs that created land use plans and proposed zoning changes that supported the development in the corridor.  The City of Phoenix has also offered millions of dollars in incentives to support some of the mega-developments that have occurred in the region.  

6.0 Resources

6.1 Citations

1. Colliers International, Greater Phoenix 2010 Report, December 2008
2. Elliot Pollack, The Worst is Yet to come for the Phoenix Real Estate Market, Blue Chip   Economic Forecast Phoenix.
3. Gary Grado, Prime Motorola site eyed by potential Buyer, East Valley Tribune, December 8, 2008
4. Greater Phoenix Chamber, Greater Phoenix Economic Outlook 2009.
5. Greater Phoenix Economic Council, Greater Phoenix, A Choice Location.
6. Intel to Spend $3 Billion on Chandler Fabs, East Valley Tribune, Feb 10, 2009.
7. Inter Tribal Council of Arizona, Inc., Salt River Pima-Maricopa Indian Community.
8. Jeff Dorsch, Motorola Restarts MOS 12 Facility Expansion, Electronic News, June 7, 1999.
9. John Clinkard, The Phoenix Economy will Rise Again, East Valley Tribune, Oct. 2. 2008.
10. Mike Sunnucks, Dial Corp Marks Move to One Scottsdale, Phoenix Business Journal, Dec. 17, 2008.
11. Saratoga Associates, Arizona State University Research Park, Harriman Research &
12. Technology Park Final Report, May 2006.
13. Sue Kirchoff, Economic Downturn Pounds Commercial Real Estate Market, USA Today, Jan 12. 2009.
14. Tony Natale, Salt River Community to see first Medical Complex, East Valley Tribune, August 22, 2007.
15. Westcor, Market Profile: Arrowhead Towne Center
16. www.azcentral.com
17. www.azplanning.org
18. www.baseballimages.com
19. www.cba.nau.edu
20. www.chamberorganizer.com
21. www.chandleraz.com
22. www.chandlermall.com
23. www.city-data.com
24. www.intel.com
25. www.investment equity.com
26. www.mag.maricopa.gov
27. www.peoriaaz.com
28. www.peoriaaz.com.
29. www.phoenixabout.com
30. www.pimacenter.com
31. www.wikipedia.org

6.2 Interviews

Organization

Arizona Department of Transportation

Maricopa Country

Tolleson Building Department

Glendale Economic Development Department

Salt River Pima Maricopa Indian Reservation

Scottsdale Transportation Planner

Maricopa Association of Governments

Peoria Economic Development Department

Footnotes

Case Study Developed by Economic Development Research Group, Inc.