Dallas, Houston -- certainly Phoenix -- and other major metro areas in the region face a key challenge in meeting the infrastructure demands brought about by rapid population and industrial growth. In their favor is room to spread out. Growth on the scale of Phoenix's in the past few years would likely cripple a comparable East Coast city, such as Boston or Philadelphia. From 1992 to 1999, Arizona's average growth rate was 7.3 percent.
      "Phoenix has been growing rapidly, but they are aware of the problems associated with urban sprawl," says CMD Realty's Moreland. "There is a recognition that they need to focus on smart growth. They have done a good job in that market of keeping infrastructure progress in step with the pace of development."

Texas' Largest New Facility Employers 10/1/2000 -- 7/23/01
Company	Location	Employees
Black & Decker	McAllen	1700
Jacobs Engineering	Houston	1500
Key Tronic	McAllen	1000
Convergys	McAllen	1000
IBP, Inc.	Sherman	1000
SBC Communications	Dallas	800
Johnson Controls	McAllen	600
Neoplan	Brownsville	600
Software Spectrum	Dallas	600
Wal-Mart Dist.	Sanger	600

      Labor is generally available in the region, and in Phoenix specifically, says Moreland, and the cost of living remains attractive. "In the construction services area, there is some inflationary pressure, because contractors are busy," he points out. "The area has been growing at such a rate that it's a challenge to keep your projects moving along at the pace you need them to, never mind worrying how competitively you bid the cost. But the economy there is slowing, and that will continue to an extent, bringing things back in line."
      The first phase of the $49 million, 375,000-sq.-ft (34,800-sq.-m.) Chandler Commons Office Park is under way on a 26-acre (10.5-ha.) site in Chandler, Ariz. The office park is located on the city's primary fiber-optic loop, delivering high-speed Internet access.
      And there's no shortage of existing space. "Approximately 3.5 million sq. ft. (325,000 sq. m.) of office space was absorbed in 2000," says Don Mudd, director, office group, at Insignia/ESG, Phoenix. "More space was absorbed than was built in 2000. Office vacancies continue to average 10-12 percent in Greater Phoenix, with some markets weaker. This is very different from the late '80s and early '90s when 25-30 percent was not uncommon throughout the market."
      Elsewhere in Arizona, the Greater Tucson Economic Council is developing a Tucson-Canada Project designed to strengthen Tucson's stature as a trading partner with Canada. A similar effort with Mexico was organized in 1998. When linked, the two will form a commerce triangle consisting of Tucson, Guadalajara, Mexico, and the Canadian cities of Ottawa, Montreal and Quebec City.