A sprawling project threatened to be run over by a true giant: Union Pacific Railroad, the second-largest railroad in the country.
But Unbound Gateway successfully argued that its plan to develop 155 acres near Sossaman and Pecos roads are “real,” while the rail line is a “pipe dream.”
“For years, the city of Mesa has envisioned this area for large employment and industrial uses including ‘mega projects’ which develop over large land assemblages and employ large quantities of highly skilled individuals at above-average wage levels,” the developer’s pitch to Mesa’s Planning and Zoning Board went.
“Unbound Gateway will be a major contributor to the realization of that vision with over 2.5 million square feet of space for businesses and their employees.”
On Oct. 13, the board voted to approve Unbound Gateway’s rezoning request from Agriculture to General Industrial.
The approval came despite a letter against the project submitted by Union Pacific Railroad, which plans a key rail line extension in the area.
According to the developer Andrew Ogan’s narrative, “Desired uses for this district include manufacturing facilities, large warehouses, distribution facilities, planned employment parks and similar uses...The project is in complete conformance with these goals by providing for appropriate, airport adjacent uses including large distribution, warehouse and/or manufacturing facilities or similar uses.”
In addition to being next to the Phoenix-Mesa Gateway Airport and near the Loop 202, Unbound Gateway is smack in the middle of a potential $100 million rail expansion.
And that’s where the industrial project was almost derailed, so to speak.
The 6-mile Pecos Industrial Rail Access and Train Extension (PIRATE) project would create “high-skilled manufacturing jobs while reducing greenhouse gas emissions and local air pollution by taking over 29,000 truckloads off U.S. highways and local roadways each year,” according to a Union Pacific project description.
Mesa is part of the public-private partnership trying to launch the rail extension, crossing 4,800 acres near the airport to connect to the Union Pacific Railroad mainline, which runs just west of the project.
The total expected cost of the PIRATE Project is just shy of $100 million
But according to the Union Pacific report, the investment will pay off handsomely:
“The PIRATE Project will generate an estimated 20,954 new jobs and $19.7 billion in economic activity over the first 10 years.
“The addition of the Pecos Industrial Rail Access Train Extension provides the city of Mesa and the region with an added benefit to tout for business expansions and relocations,” the report concludes.
An Oct. 6 letter to the P&Z board from Adrian Guerrero, general director of public affairs for Union Pacific Railroad, said Unbound Gateway “does not incorporate the necessary rail right of way or rail-served properties contemplated in the plans for PIRATE.
“As such, we request the board to only consider and support potential developments that achieve those two vital goals of the project’s plans and success.”
The railroad’s letter concluded, “We kindly ask for your consideration and support in continuing our negotiations in order to help deliver a project that successfully delivers the necessary railroad corridor along with beneficial rail-served sites.”
At the Oct. 13 P&Z meeting, Shelly Huckfeldt of Union Pacific told the board construction on the new line could begin as early as late 2022. She said the city submitted a grant application in May.
She said a second mill to be constructed by CMC Steel “spurred” the project.
CMC Steel also urged the board to reject Unbound Gateway.
Andy Sarat, director of operations of CMC Steel, told the board “a major consideration for us building here in Mesa was the PIRATE project.”
He said the rail line will reduce 1,000 truck travels per month on Mesa roads.
Troy Peterson, a P&Z Board member, asked Huckfeldt about negotiations with the Unbound Gateway developer.
“The door is open, we just haven’t been able to get there,” he replied.
But attorney Adam Baugh told the board Union Pacific has made “zero offers” about the needed property. “That’s a frustration for us,” he said.
And, he added, “What if the rail line doesn’t get built?”
Ogan, the developer who said he is nearing purchase of the property, said his industrial buildings could be complete as soon as the end of 2022.
“This is something that is very real,” he said, contending the rail extension “is a pipe dream.”
After extensive discussion, the P&Z board approved by a 5-1 vote the Unbound Gateway project, which will be presented to the Mesa City Council in November.
“We hope the City Council will follow the lead of its planning staff and the recommendation of the Planning and Zoning (Board) in supporting our case,” Baugh told the Tribune.
“This is a real project, with real users, and real jobs…the very thing the city has long hoped for in this area. While we hope to see the rail line be successful, we have to move forward with planning for development on our site.”
As for Union Pacific’s opposition, Baugh said, “We were surprised by the rail line’s last-minute letter to stop our zoning case. In the years they have been looking at this potential rail line, they have never made a written offer to purchase this site. Even still today, no offer.”
“The rail line has been rumored off and on for years but their plans need much work still and are contingent upon many things which appear to be outside their control such as grant funding, financing, right of way acquisitions and more,” Baugh said.
“It’s also important to note that nothing in our development plan prevents the rail line from acquiring the needed right of way, either through purchase, or eminent domain. Regardless of whether our project is approved, those tools are available to them. In the meantime, we can’t sit idle and wait while real development projects are ready to start now.”