PHOENIX-Another major retailer has set its sites on southwest Phoenix for a major distribution center. Target Stores plans to break ground on a 1.5-million-sf distribution facility this month just off Interstate 10, between 71st and 75th avenues.

The center will serve as Target’s Southwest distribution center, supplying inventory to 100 stores in Arizona, Southern California and Southern Nevada. Construction is expected to be completed by June 2002. At full capacity, the center will employee as many as 900 people.

“This kind of operation needs easy access to both suppliers and end users,” says Jackie Norton, director of the Arizona Department of Commerce. “The new air-cargo building at Sky Harbor International Airport and the continuing expansion of highway improvements throughout the state, underscore Phoenix as an ideal location.”

Because the center is being built in an Enterprise Zone, Minneapolis-based Target is eligible for tax credits and grant money for training.

The Southwest Valley has increasingly become the location for massive distribution projects in the past few years because commercially zoned land is more affordable there than in other parts of the Valley, there’s easy access to Interstates 10 and 8 and an abundance of rail spurs, and Sky Harbor International Airport is conveniently located about 20 miles to the east.

The demand for distribution space has prompted the construction of millions of sf of new industrial space during the past several years, including some projects totaling a half-million sf. In the Tolleson and southwest Phoenix areas, more than 1.8-million sf of new industrial space was brought to market through the third quarter, according to a recent survey by CB Richard Ellis, and about two million sf is under construction and should be on the market within months.

The vacancy rate in southwest Phoenix was 7.63% for industrial buildings at the start of the fourth quarter, compared to 7.69% for the overall Valley.

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