Phoenix recovered more slowly than the rest of the nation after the Great Recession, taking years to recoup lost jobs.
But this time around, the region might see faster recovery from the COVID-19 recession.
One big reason is the city’s changing economic landscape, which has begun to rely less on construction and focus increasingly on sectors like health care and bioscience.
Those industries are more resilient in the face of economic changes, said Christine Mackay, community and economic development director for the city of Phoenix. She said the city has seen significant growth in health care and bioscience over the past few years.
“Coming out of the Great Recession, construction has not been the leading jobs creator,” she said. “It’s been health care and biosciences.”
Between July 2019 and July 2021, Mackay said the city will see $3.5 billion in new capital investment in those two industries, which is expected to result in an estimated 7,000 new jobs and 4.4 million square feet of new building expansions.
Mackay said the average salary for these new jobs is expected to be around $70,000.
“It puts us in a much better a much better position for economic recovery,” Mackay said. “Health care and biosciences are as recession-proof as they can be. People always need health care … technology is always moving forward.”
Rather than reduced funding, Mackay said the opposite is especially true for these industries during a pandemic, since bioscience solutions and health care services are urgently needed during the world health crisis. As a result, these industries have not been as badly hit.
In February, before the pandemic, the Phoenix-Mesa-Chandler metro area had 44,700 jobs in the bioscience sector, according to data from the city’s community and economic development department. In April, the industry sector saw job growth instead of job loss. By July, which is the latest data available, there were 46,200 jobs in this sector.
The bioscience health care sector was slightly more affected by the pandemic, due to decreases in elective surgery and nonessential health care services, according to Mackay. In February, the Phoenix-Mesa-Chandler metro area had 335,300 jobs in this sector, and by July the sector had about 318,200 jobs, according to the Phoenix community and economic development data.
To competitively recruit new companies to the area, the city offers economic incentives through an Arizona Competes Fund, which offers up to $9,000 in tax credits to businesses for each new job created. Other tax credits offered under this fund include credits for increasing research and development activities or for the creation of qualified manufacturing facilities.
Some of the biggest new expansions in the city include new hospitals, such as Mayo Clinic’s 1.6 million square foot, state-of-the-art hospital under construction. Other expansions include plans for an innovation center downtown to host researchers and new science or health care startups.
The downtown innovation center is being built by real estate company Wexford Science & Innovation, in partnership with Arizona State University. Here’s what those plans look like:
The idea is to create a center for different researchers, students and business entrepreneurs in the science field to mix together, according to Wexford’s vice president Thomas Osha.
“They can bump into new entrepreneurs, they can learn about new ideas, or they can just find talent,” he said.
The building is expected to be complete this fall. Osha said he expects the space to attract new companies to Phoenix and said Wexford is in discussion to build another four or five more buildings in the area to create an innovation district in Phoenix.
Rick Naimark, ASU’s associate vice president of program development and planning, said the university is excited to be co-located with other bioscience and health care organizations. Through its partnership with Mayo, ASU expects to grow its research footprint in downtown Phoenix.
The goal is to find practical solutions to make a better world. Local research tends to benefit local areas first.
In addition to hosting research labs, ASU’s Health Futures center will be home to an incubator for early-stage health care technology companies, which Naimark said could help improve health care in the Phoenix area.
“The goal is to find practical solutions to make a better world,” Naimark said. “Local research tends to benefit local areas first.”
Some ASU research may even lead to new business startups, which is where the Center for Entrepreneurial Innovation comes in.
As a business incubator, the center has helped launch about 60 companies over the past five years, creating 677 new jobs. Companies launched at the center are often cutting-edge and have competed in international bioscience competitions.
To further help new companies, said executive director Thomas Schumann, the center plans to launch a validation lab inside the Wexford Building, which will work with bioscience and health care companies that are still in the conceptual, early stages of development.
“We’re helping them figure out if the product will succeed in the market and how to succeed in market,” Schumann said.
The center also plans to launch hands-on training programs for scientists and entry level lab technicians inside the expanded space.
Another expansion expected to increase the amount of new science research and innovation in Arizona is Mayo Clinic’s new hospital.
Gray expects Mayo Clinic to expand its research in areas like cancer treatment, heart disease, personalized genetic treatments, immunology and transplants.
“The intention of this is to greatly enhance the impact that our Arizona site can have in terms of research and innovation,” Gray said.
Mayo’s new hospital will generate about $2 billion in economic output for the city, according to Gray. He attributes that to added jobs, tax revenue and the expectation of out-of-state patients visiting Arizona to receive care or participate in clinical studies.
The hospital is expected to open in phases through 2022 and 2023.
Though Mayo Clinic’s new hospital and Wexford’s downtown innovation center are expected to have the most impact on new science research in Arizona, other expansions will help increase Phoenix’s health care and science capabilities.
The Arizona Republic has spoken to some organizations that have either completed expansions or are currently undergoing expansions. Here are some of the bigger expansions happening throughout the city:
Creighton University
Location of expansion: 3100 N. Central Ave.
Creighton University is a private Jesuit university and is building a 183,000 square foot Health Sciences campus, which is expected to educate new health care professionals and add 258 new jobs.
This campus will host 96 students for an accelerated nursing program, 20 students for a physician’s assistant program, about 300 health professional students for occupational therapy, physical therapy and pharmacy. It will also feature a new four-year medical school that will enroll 480 students.
We’re creating this possibility that health care professionals would come to learn and work and stay in Phoenix.
Creighton’s president, Daniel Hendrickson, says the state lags behind others in terms of the size of its health care workforce, especially for physicians.
“We’re creating this possibility that health care professionals would come to learn and work and stay in Phoenix,” he said.
These students are also expected to collaborate with other organizations in the area to conduct research that aims to advance the medical field.
Hendrickson said the campus is expected to fill 258 new jobs to support the new campus and over the next 10 years, and generate $12 million in tax revenue for the city and $304 million in total economic output.
The campus cost a total of $100 million to build, and the university received a $2 million grant for the expansion from Maricopa County’s Industrial Development Authority.
The campus is expected to be complete by August 2021.
Caris Life Sciences
Locations of expansions: 4610 S. 44th Place, 4415 Cotton Center Blvd. and 350 W. Washington St., Tempe
Caris Life Sciences focuses on personalized cancer treatment, and offers genetic analysis of cancer tumors.
The goal is to help doctors figure out the best treatments for each patient, according to David Spetzler, the company’s chief scientific officer. But Spetzler said this type of treatment is still in the early stages, so there’s still some unknowns about how genetic data about cancer could be useful.
“There is immense excitement about how much we can learn about cancer with this information,” Spetzler said.
As the field of personalized cancer treatment grows, so does the company. Its main building at 4610 S. 44th Place expanded by an additional 20,000 square feet in July, and the company also recently opened an additional 64,000 square feet of new laboratory spaces at a second building in Tempe.
The company plans to keep expanding, and hopes to begin doing liquid biopsies, which would allow doctors to detect and track cancer over time to see how patients respond to treatment. To do those procedures, the company plans to open another lab at 4415 Cotton Center Blvd in Phoenix, which will be roughly 34,000 square feet and is expecting to open in early 2021.
The company currently has 785 employees and is hiring 400 more.
Exact Sciences
Location of expansion: 445 N. 5th St.
Exact Sciences is an early cancer detection company constructing a 14,000 square foot building that is expected to add 50 or more new jobs.
The company already provides cutting edge early-detection colorectal cancer screening, which uses genetic analysis of stool samples, but hopes to offer genetic-based early-detection screening for other types of cancer as well, according to vice president of marketing David Mallery.
“We are growing genomics based medicine. … That’s clearly where a large part of the field is going,” he said.
In addition to analyzing patients’ DNA, the company also analyzes the genetic information of patients’ cancer cells, which can be used to create personalized treatment plans.
Exact Sciences plans to take over existing space at the Translational Genomics Research Institute’s downtown building. The space is currently used by ASU but will be vacated when ASU relocates into the new Wexford building.
HonorHealth
Location of expansion: 33423 N. 32nd Ave.
Honor Health is constructing a new 210,000 square foot hospital, which is expected to add at least 100 new jobs.
Honor Health’s newest hospital expansion will feature 24-hour emergency care, operating rooms for surgeries and 70 hospital beds. This hospital, named the Sonoran Crossing Medical Center, is expected to open in the fall of 2020 and will have room to continue adding more hospital beds, according to Preston Allred, HonorHealth’s director of operations.
HonorHealth also plans to open a new neuroscience institute in the spring, adjacent to its current Osborn Medical Center in Scottsdale. This institute will be a 120,000 square feet expansion featuring a lab for hands on medical training.
Senestech
Location of expansion: 23460 N. 19th Ave., Suite 110
Senestech is a rodent control company, which is relocating its headquarters to a 5,500 square foot space in Phoenix and expects to add five to 10 new jobs.
Senestech sells a nonlethal reversible rat birth control, which it markets as a form of pest control. The rat birth control product, called ContraPest, is a liquid substance that tastes good to rats, but within 24 hours of ingestion, affects fertility in both male and female rats.
The company was originally based in Flagstaff, but relocated to a space with room to grow. The company plans to expand and move its manufacturing facility to Phoenix as well, which should add more manufacturing jobs in the area, according to Tom Chesterman, Senestech’s chief financial officer.
The company moved into its new Phoenix location in August.
VA Health Care System
Location of expansion: 400 N. 32nd St.
The VA Health Care System is constructing a 203,000 square foot facility to provide medical services to veterans. The facility is expected to add about 180 new jobs.
Growing numbers of veterans are moving to Phoenix, and the veterans administration health care system is working to provide care for a growing number of patients, according to David Charnetsky, the health care system’s facility planner. This expansion will address growing demand by servicing an additional 60,000 veteran patients, he said.
The facility will also be affiliated with the University of Arizona and other medical associations to conduct clinical research in the hopes of making medical advancements. The facility is expected to be complete in the fall of 2021 and will start treating patients in the spring of 2022.
Valleywise Health
Location of expansion: 2601 E. Roosevelt St.
Valleywise Health is building a brand new 785,000 square foot hospital with updated facilities.
The hospital will have more modern, updated technology and will have expanded ICU and critical care capacity, according to Valleywise communications director Michael Murphy.
“This will give clinicians the tools needed to be on the cutting edge of care and effectively treat patients,” he said.
Construction began in spring 2019 and the new hospital expected to be completed in the fall of 2023.
Sonora Quest
Location of expansion: 424 S. 56th St.
Sonora Quest offers lab testing to diagnose health conditions, and hopes to become more efficient at delivering test results now that it has consolidated operations into one 250,000 square foot building. The company has already added 150 new jobs for the expansion.
The company’s laboratory team had worked in two separate buildings, but the expansion will place the laboratory team in one building to increase efficiency. The new building will also be equipped with new technology that the company says would result in quicker test results.
Sonora Quest is one of the state’s major providers of COVID-19 tests, but has experienced backlogs in testing.
This expansion aims to help Sonora Quest better meet customer demand, according to its communications manager, Havona Horsefield.
The building that Sonora Quest is moving into was built over 20 years ago, but was renovated for the expansion to accommodate the laboratories. Renovations were completed in June 2020 and the location is now up and running.
Dignity Health
Location of expansion: 350 W. Thomas Road
Dignity Health’s Barrow Neurological institute is constructing a new 130,050 square foot neuroscience facility that will be used to treat neurological conditions like stroke or brain cancer.
The center aims to advance the field of neurological medicine through research and will include 30,000 square feet of research space, according to Michael Lawton, Barrow’s president & CEO.
Lawton said the expansion is expected to be completed in late 2020.
Reunion rehabilitation hospital
Location of expansion: 1675 E. Villa St.
Nobis Rehab Partners currently operates several rehabilitation hospitals in the U.S. and is building a new 51,850 square foot rehabilitation hospital in Phoenix. It expects to add 150 new jobs at the location.
This hospital will provide rehabilitative care for people with debilitating conditions such as stroke or brain injury and will accommodate a total of 48 beds.
For its 150 expected new positions, the hospital will hire across a range of specialties, including nurses, physical therapists and occupational therapists.
The hospital is expected to open around the fall of 2021.
Amanda Morris covers all things bioscience, which includes health care, technology, new research and the environment. Send her tips, story ideas, or dog memes at [email protected] and follow her on Twitter @amandamomorris for the latest bioscience updates.
Independent coverage of bioscience in Arizona is supported by a grant from the Flinn Foundation.