Another Phoenix Area Auto Proving Grounds On the Block

Automakers get good mileage for money on test tracks
The Arizona Republic (article link)
May. 7, 2006 12:00 AM

New homes could soon replace cars on another big piece of land on the Valley’s fringes.

General Motors’ proving ground is in play again.

The automaker wants to sell the rest of the Mesa site and possibly lease part of it back until it finds another proving ground not so close to so much growth.
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GM sold 1,800 acres of the 5,000-acre property in 2004 but pulled back on selling the rest.

GM’s proving ground was Arizona’s first one for cars. Now it’s the latest casualty of growth. The automaker has hired Nate Nathan of Nathan & Associates to find a buyer for the site. The land brokerage recently sold DaimlerChrysler’s proving ground in the northwest Valley for $312 million. That was the priciest land sale in history. (See story on this very blog)

But there are other big proving grounds to be had by home builders. Sites owned by Toyota or Nissan could be next.

Toyota’s 12,000-acre proving ground was isolated when it opened in April 1993 in the far-west Valley, 16 miles farther out than Daimler’s test track. Now the Japanese automaker’s site is surrounded by developments planned in fast-growing Buckeye, including the 35,000-acre Douglas Ranch project.

Nissan is also exploring the sale of its 3,000-acre proving grounds near the fast-growing city of Maricopa in Pinal County.

Arizona proving grounds have become hot investments for automakers that originally came to the desert for its dry, hot climate and huge stretches of inexpensive land.

The 1,800 acres GM sold to Valley businessman William Levine fetched $45 million.

Automakers are selling not only to cash in on the Valley’s housing boom but also because they don’t want to be surrounded by noisy neighbors.

They want to keep future products and prototype vehicles away from prying eyes and camera-toting industrial spies.

Mesa officials and real estate analysts think GM’s site is prime for commercial development that brings jobs to the many rooftops already built in the area.

More downtown condos

JAG Development is the latest builder to put a residential infill project on downtown Phoenix’s drawing board.

The developer is planning 38 loft-style condominiums at Portland 38 near Seventh and Portland streets.

But unlike other firms trying to develop homes downtown, JAG has a proven track record. It recently completed the Willetta 9 housing project near Seventh and Willetta streets.

JAG is an urban pioneer to build next to the Garfield neighborhood, where next to nothing has been built for decades. The area’s crime rate recently dropped.

JAG is betting Arizona State University’s downtown campus will help revitalize the neighborhood.

The Valley’s real estate industry needs more developers like JAG that are willing to take a risk.

Catherine Reagor is senior real estate reporter. Contact her at catherine.reagor@arizonarepublic.com or (602) 444-8040.