Less than two years from now, developers say, a 505-acre site on the former Storey farm near the northwest corner of Arizona 287 (Florence Boulevard) and Toltec Buttes Road will be bustling with a 1.5-million-square-foot “sourcing center.” It will have more than 2,000 vendors, thousands of jobs and a combined annual payroll of more than $300 million.
The project, inside the Casa Grande city limits, was announced Wednesday morning at City Hall during a press conference by developers and government officials.
Phoenix Mart is described as a sourcing center, a gathering place for small and mid-sized businesses to market their products and services directly to consumers, businesses and international buyers. It will be geared for both wholesale and retail customers, according to Jeremy Schoenfelder, executive vice president of Scottsdale-based AZ Sourcing LLC, which is developing the project.
The company’s executives have been involved individually in the development and management of commercial projects in Phoenix, Las Vegas, Seattle, Los Angeles, Hawaii, Mexico and China. AZ Sourcing was formed specifically for this project, Schoenfelder said.
Phoenix Mart is designed to have six product areas, each with vendors dealing in that type of merchandise — women’s, men’s, youth, auto, home and hotel, and food. The facility also will have a convention center that will host trade shows, seminars, demonstrations, conventions and entertainment events.
The facility is expected to have a distribution center, e-commerce platform and catalog sales support service to allow vendors to sell merchandise worldwide. It also will include retail shops, dining and entertainment for the public.
AZ Sourcing also has purchased the Outlets at Casa Grande, the former Tanger Outlet Center about five miles southwest of the Phoenix Mart site at Interstate 10 and Jimmie Kerr Boulevard.
“Our goal is to have it be a hotel supply center,” Schoenfelder said.
The first anchor tenant at The Outlets will be Yakool Corporation, a large supplier of hotel products and supplies. Work could begin soon on remodeling and Yakool hopes to be operating at the outlet center in the first quarter of 2012. Existing stores are expected to remain at the center, but there are many vacancies.
Plans call for Phoenix Mart to be fully operational by late 2012 or early 2013. Construction likely won’t start until the first or second quarter of 2012, once permitting has been completed through the Planning and Development Department and the City Council.
Phoenix Mart is a United States Citizenship and Immigration Services-approved EB-5 Investment Project, to be built on $150 million in capital largely from foreign investors. That provides the opportunity, under a program passed by Congress in 1990, for investment in rural areas with high unemployment. Foreign investors who put in a minimum $500,000 investment will receive a green card and be allowed to bring their family to the United States. Each foreign investor must produce 10 jobs for U.S. citizens. Under EB-5 guidelines, the project must be in an area where unemployment is 150 percent of the national average. Pinal County Supervisor David Snider, whose District 3 includes the sourcing center area, said the EB-5 district approved by the U.S. State Department includes most of Casa Grande, Eloy and Stanfield.
“We are expecting 300 Chinese nationals,” Mayor Bob Jackson said.
A study commissioned by the developers projected 7,905 direct and indirect jobs, generating annual business revenue of nearly $850 million and a combined annual payroll of more than $325 million.
“We’ll have a half-million products on display,” Schoenfelder said.
Colliers International will handle the leasing brokerage services. The company has 12,500 employees in 61 countries, offering the reach the project requires to connect buyers and sellers. Basic spaces in the sourcing center will be 8,000 square feet.
“You couldn’t find a better location anywhere in the U.S.,” said John Lennon, owner of Arizona Valve and Fitting in Phoenix. He is also an investor in the project and will be a tenant at the sourcing center. “Small business companies made this country great. This will give them a platform to expose their products internationally — something they can’t afford to do themselves.”
The project has been in the works for more than two years. A core group of investors with AZ Sourcing approached Snider about a business opportunity in his district. He got Casa Grande officials involved and was the liaison with the federal government in setting up the EB-5 district.
Snider and Jackson visited China earlier this year to help keep the project moving, and Jackson said they were overwhelmed by the sheer number of consumers in that country.
“This [sourcing center] business model is untested in this country so far,” Jackson said, though Schoenfelder said similar projects have been hugely successful in Dubai and China.
Jackson said the city has spent the last four years working on ways to inject outside money into its economy. It already has done that with the Casa Grande Performance Institute adjacent to Francisco Grande Hotel & Golf Resort, but he said the sourcing center offers far greater potential.
“This is a successful business model, even though it’s brand new in the U.S.,” said Sam Tang, a Chinese investor who is a principal in AZ Sourcing. He has a physics degree from Peking University and a master’s degree from the University of Oklahoma. “I like the transportation, the highways and the proximity to Mexico. And the community is so supportive.”
“It’s a natural fit for distribution with highways and rail,” Schoenfelder said of Casa Grande. “Aside from that, as we started looking for sites, we really did feel welcome in Casa Grande and Pinal County. What I really like is their ability to quietly do big things. Their goal in working is to have things be accomplished. Things seem to get done in Casa Grande, and it’s great to work with people who are all in to accomplish things.”