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Surprise can be selective with projects it fits in

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Surprise was in a position for years where it needed to stack up whatever retail of industrial businesses decided to plant their flag in this far West Valley outpost.

Now the city is in demand for both sectors more than at any point in its relatively short history, particularly in the Prasada area surrounding Loop 303.

But open land is being gobbled up at a rapid pace. Fitting in the final pieces to the puzzle will require some strategic stacking in relation to decisions made south of Waddell Road.

“There’s a lot of land zoned for mixed-use or residential. So the potential on those hard corners is exciting,” said Surprise Economic Development Director Jeanine Jerkovic. “We want to think strategically as a city for what we want in the long term on the hard corners. It’s almost like a game of Tetris where we’re trying to fit in the right retailers.”

The Village at Prasada takes center stage, having received commitments for all 700,000 square feet of its retail space.

More is filling in near the outdoor shopping center, including the upcoming start of construction on what will be an industrial complex with a retail component.

In August 2021, Chicago-based Baker Development Corp. spent $20 million to acquire 82 acres south of Sweetwater Avenue and just west of Loop 303 with retail frontage along Cactus Road. While no future tenants have confirmed their interest or purchase publicly, the smaller retail component figures to be the first topic.

Baker entered into a contact with Thompson Thrift to develop the 16-acre retail component of the property. Thompson Thrift previously developed the area of Surprise City Center that includes Raising Cane’s, Starbucks, In-N-Out Burger, Tokyo Joe’s, Menchie’s Frozen Yogurt, Mucho Burrito and Pieology Pizzeria.

“They’re marketing the property and now making preliminary contracts and leases for the retail PADs,” said Dan Slack, principal at Baker Development. “We saw it as a no brainer for a retail corridor. Cactus has always been planned as a retail corridor.”

BDC named the estimated $150 million industrial park project Cactus 303 and plans to build about 1 million square feet, leading with seven Class A industrial buildings.

On-site retail is almost never paired with an industrial park but that should be a selling point of Cactus 303.

“We think our development will benefit immensely from the retail we provide,” Slack said. “It’s very rare if not ever done before.”

Baker called on Chuck Gibson and Robbie Petty from the Phoenix office of SRS Real Estate Partners to handle marketing strategies.

The company is finishing site plan approvals and is in the process of preparing permit drawings for the 557,000-square-foot first phase of Cactus 303. Potential tenants will wait to tip their hand until ground is broken near the end of this year.

“Until we start constructing walls industrials don’t show their interest,” Slack said. “They all want to go in at the same time.”

Slack said Cactus 303 should receive positive spillover from Taiwan Semiconductor Manufacturing Co. constructing a $12 billion chip manufacturing center on 1,050 acres north of Loop 303 and just west of Interstate 17 in northwest Phoenix — even more of a boost than Baker’s Deer Valley-area property.

Surprise is better positioned in between TSMC and Intel’s Mesa expansion because of its relative proximity to Mesa via Interstate 10 east.

“There’s a ton of interest. Deer Valley is a very expensive market from a lack of supply. So we see Surprise as a viable market,” Slack said.

Jerkovic said TSMC and other projects activated development along Loop 303 earlier than anticipated, boosting demand along the Prasada corridor.

Tier 1 and higher-end brands and restaurants are courting Surprise now, she said, particularly in near Prasada. There may not be room soon.

“If we’re not able to accommodate it at Prasada, can we at City Center or north Surprise?” Jerkovic said.

Several areas of town are hopping. Safeway will arrive soon on the northwest corner of Peoria Avenue and Cotton Lane, which Jerkovic said is crucial in an underserved area.

EoS Fitness is coming in near Venue Taproom along Litchfield Road south of Waddell. Near there, on the southwest corner of Litchfield Road and Soledad Street, Dutch Bros., is preparing for its third Surprise location — after opening its second in Surprise, on Waddell Road just west of Loop 303, June 30.

Jerkovic said permits are submitted for the Fry’s Fuel Station in Asante.

About the only thing slowing development in this market are current national market conditions — the now-common high cost of materials and supply chain shortfalls.

Baker ordered all roof materials last November — a move that saved significant costs — for delivery in April 2023. The parts are universal and able to be reused.

Jerkovic said supply chain issues are, on average, delaying the building process by about a quarter of the year.

“We’re looking at what pain points there are for businesses and trying to be accommodating,” Jerkovic said.

Surprise Economic Development, Jeanine Jerkovic, Baker Development Corp, Dan Slack, Thompson Thrift Safeway, EoS Fitness, Dutch Bros.