High Hopes Abound for Gateway Airport Park

Article originally posted on HERE on June 26, 2023

Southeast Mesa residents regularly bemoan the lack of dining and entertainment options close to their neighborhoods, a state of affairs they say pushes them into Gilbert and Queen Creek in search of food and fun.

City officials have worried that in addition to impacting quality of life, the lack of hospitality amenities in the area results in a loss of sales tax revenue.

How the city can encourage businesses to bring more destination retail and dining to Mesa has been a hot topic, with the city earmarking $100,000 in next year’s budget for a Quality Retail Attraction Initiative.

District 6 Councilman Scott Somers and other residents of southeast Mesa are putting some of their hopes for high-quality retail in a planned 273-acre airport-owned business park called Gateway East at Ellsworth and State Route 24.

Last week the council signed off on a Planned Area Development zoning and development agreement with the airport’s development partner, Salt Lake City-based Boyer.

Somers said this part of Mesa is “screaming” for community gathering spaces.

With Gateway East sitting close to Cadence and Eastmark, he believes it could help change the trajectory of southeast Mesa toward higher-quality hospitality.

High on Somers’ wish list for Gateway East is a large resort-style hotel that airport officials agree is needed and might stimulate more sit-down dining both in Gateway East and in the surrounding area beyond airport property.

Somers mused about the possibilities at Gateway East, envisioning a rooftop bar where guests could sip an alcoholic beverage  while watching planes fly in and out of Phoenix-Mesa Gateway Airport.

Business jet company Gulfstream is building a $100 million maintenance facility next to the future site of Gateway East, and company executives and clients would be prime customers for upscale amenities, Somers and airport officials said.

Ultimately, the council unanimously approved the proposed zoning guidelines and development agreement for Gateway East.

But it demanded assurances from executives from the airport and development partner Boyer that Gateway East would deliver quality over the long haul.

If the business park ends up dominated by drab tilt-up concrete buildings with basic hotel brands and quick-service restaurants, “there will be a lot of disappointment in the neighborhood,” Somers said.

Airport  President J. Brian O’Neill agreed that Gateway East was “extremely important to Mesa and the entire East Valley,” and said the airport and Boyer share the city’s visions for a “world-class business park.”

O’Neill said the airport was confident its master developer, Boyer, would land quality establishments, noting that the company was the unanimous choice of the selection committee, which considered 12 other developers.

Boyer describes itself on its website as one of the largest developers in the nation and a full-service development company and manager of office, retail, industrial, medical and other specialty property types.

Under a 40-year agreement, Boyer would oversee the buildout and leasing of Gateway East’s 273 acres in three phases. 

The airport will continue to own the land, receiving ground lease payments from Boyer for developed properties and a 10% cut of revenue from tenant leases.

Boyer must meet benchmarks to maintain the right to develop the entire property.

The agreement gives Boyer flexibility to adapt the plan to market conditions, so the exact ratio of office, industrial, retail and hospitality could change over time.

An early master plan Boyer presented to the airport earmarked 43 acres, or 15%, of the park for retail and hospitality.

Airport officials say the project is important to the airport’s future because they plan to use revenue from Gateway East to eventually finance construction of a new passenger terminal on the east side of the airport, a long-term vision still many years off.

But Somers and Councilwoman Alicia Goforth expressed lingering anxiety that Gateway East could fail to achieve its vision and become a mediocre industrial park at a strategic intersection.

She asked city staff to do “everything legally possible to make sure that vision continues to be the vision during the entire process and doesn’t change.”

“I’ve only been on this (council) five months,” Goforth continued, “and I’ve seen (projects) switch. It’s a beautiful vision when you come to council, and years down the road, months down the road, ‘the market dictates a change’ is what we hear, and it’s frustrating.”

She told the Tribune that creating attractive destination for people to shop and eat is a vital interest for the city in today’s economy.

“Economic development really becomes about creating a city that you want to live in – because people can live all over the place now,” Goforth said. “There’s a lot of remote work happening, hybrid work happening, and people are first picking their cities and then their jobs.”

And for companies looking to do business in Mesa, she points out, workforce is top of mind.

To reassure council members that the company would do its best to deliver tenants and quality architecture, Boyer partner Matt Jensen pointed to the company’s ability to self-finance building projects and its successful track record partnering with communities.

“We’re financially stable,” Jensen told council members. “We don’t build stuff just to sell it. We build it to hold it.”

Boyers’ ability to self-finance may already be working to the airport’s advantage.

The company is providing financing for Gateway East’s inaugural tenant: an office, research and manufacturing facility for high-tech HVAC company Xnrgy.

 Boyer and airport officials view Xnrgy as a strong lead off hitter to set the tone for Gateway East and generate excitement for the project.

But as has often been the case when developers and city officials are pressed by residents about delivering specific types of development, the assurances from the airport came with the caveat that the developers are at the mercy of the market.

“I can’t promise you the Phoenician II in the East Valley, unfortunately,” O’Neill said, “but what I can promise you is that Boyer is working with the developer who has the large parcel across the street … to ensure that we are meeting the needs of the market.”

Gateway East sits across the street from land owned by Pacific Proving LLC, developer of the southern portion of the GMC Proving Grounds, and owner of the land beneath Legacy Park.

In the study session before the vote, City Manager Chris Brady tried to reassure council, endorsing Boyer as a strong partner, and telling council members that the city will have more hand in Gateway East than it would a purely private development.

Each project will need to go through the PMGA Board of Directors, and the City of Mesa is “the most active, strong partner at the board. We have a huge influence on what happens at the airport.”