Megaprojects Lead Ongoing Recovery for Southwest Firms – Engineering News-Record

Construction equipment prepares a site for two new chip factories—Intel Fab 52 and Fab 62—at Intel Corp.’s Ocotillo campus in Chandler, Ariz. The project’s $20-billion price tag is the largest private-sector investment in Arizona history.
Photo courtesy of Intel Corp.
Led by several megaprojects, the construction industry in Arizona, Nevada and New Mexico strengthened in 2021. The top 25 projects on ENR Southwest’s annual Top Starts ranking represent $41.7 billion in value; in contrast, the pandemic-impacted 2020 total was $5.19 billion.
“I definitely would not call 2021 a ‘rebound,’ as [2020] was an excellent year for many of our members,” says David Martin, president, Arizona Chapter of the Associated General Contractors of America in Phoenix. “We are grateful that Governor [Doug] Ducey declared our industry as essential during the beginning of the COVID-19 pandemic. Many of our public and private clients took this momentum into 2021, which was also an excellent year for all sectors of the industry.”
“Last year was largely a banner year for contractors in commercial and public works construction,” adds Craig Madole, chief executive officer for the Nevada Chapter AGC in Reno. “Things appear very favorable for the next couple of years. The state economy has helped keep the public works market strong, and investment from the federal government is significant. Numerous large private projects continue to come out of the ground and are providing backlog for contractors.”
Projects with confidential costs or for which total or construction costs could not be independently verified were not included in the Top Starts ranking.
Leading the region are the $20-billion Intel FAB 52 & FAB 62 Chip Factories in Chandler. They represent the largest private-sector investment in Arizona history, expected to be production ready in 2024. The two semiconductor plants are adjacent to four existing factories at the Ocotillo campus, the company’s main North American high-volume fabrication facility. They will manufacture products on Intel’s latest process technology and generate 3,000 construction jobs, create 3,000-plus Intel jobs and support an estimated 15,000 indirect jobs in the community. 
In Phoenix, another megaproject, the $12-billion Taiwan Semiconductor Factory, also is scheduled for completion by 2024.
“The pace of nonresidential construction picked up noticeably in late 2021, particularly for manufacturing projects such as the massive semiconductor plants that broke ground in Arizona but also factories in numerous states to produce electrified vehicles, batteries and other components; equipment and parts for offshore and onshore wind farms and solar fields; and pharmaceutical and vaccine production lines,” says Ken Simonson, chief economist for AGC of America, Arlington, Va.
As a result, contractors were bullish approaching 2022, he says, referring to AGC’s annual Hiring and Business Outlook Survey. 
“The highest positive readings were for infrastructure niches: bridge/highway, transportation such as airports and rail and water/sewer. The only segments for which more respondents said they expect the market to shrink were retail and private office construction,” he says.
Among the region’s many high-tech projects is the $800-million Meta Mesa Data Center. Scheduled for completion in the third quarter of 2023 on 390 acres in Mesa, Ariz., the LEED-targeted, 960,000-sq-ft building for Meta, formerly Facebook, is the company’s first data center in Arizona. Meta expects as many as 1,500 construction jobs at peak and 100 operational jobs.
In Rio Rancho, N.M., the $3.5-billion Intel plant—the largest private-sector investment in state history—is expected to be ready in late 2022 to manufacture advanced semiconductor packaging technologies. 
Energy and infrastructure projects were strong across the region as well. 
Near Buckeye, Ariz., the $600-million Sonoran Solar Project, owned by NextEra Energy Resources, includes approximately 3,000 acres of photovoltaic arrays, support structures, energy storage and a gen-tie line to connect to a Salt River Project (SRP) utility substation. Expected to produce 260 MW of electricity and 260 MW of battery storage—enough to power 91,000 homes—this will be the largest solar-charged battery project in the state, SRP says.
And in New Mexico, the $262-million Aragonne Mesa Wind 145 MW and the Aragonne Repower 90 MW projects, both in Guadalupe County, began using GE wind technology in December 2021 to help Arizona Public Service, the state’s largest provider of electricity, achieve its goal of delivering 100% carbon-free electricity to its customers by 2050. Both projects are owned by Leeward Renewable Energy Group LLC. 
Transportation infrastructure also is booming across the region. The $776.59-million Interstate 10 Broadway Curve Improvement Project is ADOT’s largest-ever urban freeway reconstruction, including 11 miles of I-10 in the Phoenix metro area. The roadway should be complete in late 2024.
In northwest Las Vegas, the $155-million Centennial Bowl Phase 3D completes a $281.1-million project NDOT began in 2015. It builds out the remaining three ramps to finish the system-to-system interchange and highway expansions. The project is targeted for mid-2024 completion.
The region’s hospitality sector was hit hard by the pandemic. However, the $500-million, 67-story Fontainebleau Las Vegas is expected to open in the fourth quarter of 2023. Additionally, the $125-million Omni Hotel and Convention Center in Tempe should be complete by spring 2023.
Manufacturing and warehousing remain vibrant throughout the Southwest. In Henderson, Nev., the $327-million Haas Automation Manufacturing Building should be delivered in late 2022. In Grants, N.M., the $300-million Cannabis Manufacturing/Research Facility is expected to be complete in 2023. 
And, in Mesa, CMC should begin production in early 2023 from its $300-million micro mill, the first facility worldwide to produce merchant bar and rebar, according to CMC.
Health care projects thrived despite pandemic effects on the system. The $243-million Banner Gateway Medical Center Tower Expansion in Gilbert, Ariz., is scheduled for completion in early 2023. With 109 new patient beds, the 198,000-sq-ft, five-story tower will double the size of the medical center campus; a 112,000-sq-ft, three-level addition also will expand the diagnostics and treatment building. 
The largest of a number of education projects in the region is the Northeast Career and Technical Academy (NECTA) in busy North Las Vegas. The $226.51-million project for the Clark County School District is scheduled for a July 2023 delivery.
High-density residential has also been strong, led regionally by the $200-million Culdesac Tempe, described by the owner as the country’s first ground-up, car-free community. It  should be ready for occupancy in December.
Regional leaders are cautiously optimistic looking forward. “We are hopeful for 2022 and 2023,” says Carla Kugler, president and CEO of ABC New Mexico in Albuquerque. “The amount of federal money that is expected to roll into the [states] with the Infrastructure Investment and Jobs Act should keep construction busy for years to come. And, on a state level, the budget for New Mexico is also flush with funds for infrastructure.” 
AGC Arizona’s Martin agrees: “I am extremely optimistic for our industry for at least the next 3 to 5 years. With the growth of our state and continued investment in infrastructure, 2022 and 2023 will continue in the same fashion as 2021.”

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