Financial Impact Summary

RANGE OF FISCAL IMPACTS FOR 
PARKWAY 303 ANNEXATION  
 
 
 
 
 
 
 
 
 
 
AUGUST 2022 
 
 
 
 
 
11209 N. Tatum Boulevard, Suite 225 * Phoenix, AZ  85028 * 602-765-2400 tel * 602-765-2407 fax

1 
 
Introduction 
The following summary presents the fiscal impacts of annexation for Parkway 303, which includes 
approximately 276 gross acres and is anticipated to develop as a combination of manufacturing, assembly, 
warehousing and logistics uses.  The Parkway 303 property is located on the east side of the Loop 303, 
north of Olive Avenue, and includes similar-sized parcels on both sides of Sarival Avenue.  Detail on specific 
users is not yet known; therefore this analysis presents a range of possible impacts based on hypothetical 
scenarios for the types of light industrial uses that could develop in this area.    
The potential types of uses include: 1) an unoccupied shell building; 2) leased warehouse; and 3) leased 
manufacturing.  Various assumptions were developed for each scenario regarding employment density, 
lease rates and capital investment (construction and FF&E).   While these assumptions are based on recent 
projects, as well as published sources for lease rates and construction costs, they are simply intended to 
show a general range of possible economic and fiscal impacts.   
Another potential use for light industrial space is e-commerce, specifically fulfillment centers that 
represent point of sale for shipments.  These types of projects are highly competitive and they can yield a 
significant amount of sales tax revenue.  However, since there are a limited number of these projects 
looking at the Phoenix metro area, this type of potential use was not explicitly considered in the analysis. 
The point of this exercise is simply to frame what each type of use could bring to the city in terms of the 
number and quality of jobs, as well as the fiscal impacts, and how that result could be scaled to the 
Parkway 303 annexation.   
Project Assumptions 
The table below presents the results for 1 million square feet of each user type in terms of capital 
investment, jobs and wage levels, annual fiscal impacts (revenues less expenditures for city operating 
funds), one-time fees (construction sales tax, development impact fees, estimated permit fees) and 
overall ranking.  This is followed by the “blended average” for Parkway 303 that includes 2.19 million 
square feet of warehousing and 2.19 million square feet of manufacturing for a total of 4.38 million square 
feet in four buildings.  The total number of square feet is consistent with the parcel size and the proposed 
site plan.  It is assumed that all of the space would be leased.  The expenditure impacts assume that a half 
mile of Sarival Avenue adjacent to the property would be widened to 5 lanes, and the results capture the 
additional on-going maintenance costs to the city. 
 
 
 
 
 
 
 
COMPARATIVE IMPACTS OF POTENTIAL LIGHT INDUSTRIAL USERS

2 
 
AND PARKWAY 303 BLENDED AVERAGE  
    
• 
Capital investment is represented by a combination of building costs and FF&E, both of which 
generate property taxes for the city.  Construction activity also results in significant one-time sales 
taxes.  Manufacturing operations typically have higher capital investment than other uses based on 
the nature of their process and the corresponding equipment requirements, however given the recent 
reduction in Arizona’s depreciation rates for Class 1 business personal property, large capital 
investments in equipment no longer have a significant impact on property tax revenues.  The leased 
warehouse in this analysis has a slightly lower projected construction cost than the manufacturing 
pro-forma and less equipment.  The empty shell represents the low end with an unfinished building 
and no equipment, and is a temporary condition.  The total construction cost for Parkway 303 is 
estimated at $599.1 million for 4.38 million square feet of light industrial space. 
 
• 
Jobs and average wages are important not only in terms of the number of jobs created, but also the 
quality of jobs as represented by average wages.  To the extent that workers live in Glendale, higher 
wages translate into more taxable spending and higher value housing.  Typical warehouse operations 
create a limited number of jobs with generally lower average wages than manufacturing.  
Manufacturing represents a relatively higher job density, among light industrial uses, with above 
average wages.  However manufacturing wages vary significantly based on the type of product being 
produced.  It is estimated that the light industrial development in Parkway 303 could support about 
635 jobs at an average wage of $53,000. 
 
Fiscal Results 
 
• 
One-time fees are related to construction and are generally proportional to the construction cost 
because construction sales taxes make up the largest share of one-time fees.  Development impact 
fees (DIF) are the same for all types of light industrial uses since they are based on building square 
footage.  One-time fees also include estimated planning and permitting fees that are generally 
proportional to construction costs. Total one-time fees for Parkway 303 are estimated at $16.9 
million.  This number does not include any streets DIF fees, or the value of any infrastructure that 
may be constructed by the developer. 
 
Building Use
Building 
Square 
Feet
Building 
Construction 
(millions)
FF&E 
(millions)
Jobs
Average 
Wage
One-Time 
Fees*
Annual 
Revenues less 
Expenditures
Overall 
Ranking
Empty Shell
1,000,000
$78.8
$0.0
0
$0
$2,353,000
$20,000
Low
Leased Warehouse
1,000,000
$133.9
$22.0
400
$44,277
$3,794,000
$370,000
Medium
Leased Manufacturing
1,000,000
$139.5
$100.0
833
$61,460
$3,940,000
$320,000
Medium
Parkway 303 Blended Average 
(50% warehouse, 50% 
manufacturing)
4,381,272
$599.1
$267.3
2,701
$52,869 $16,943,000
$1,490,000
Medium
*One Time Fees include construction sales tax, estimated planning and permitting fees and development impact fees in West Glendale.

3 
 
• 
The annual fiscal impacts represent the net value of these different types of light industrial users to 
the city in terms of revenues less expenditures.  These annual fiscal impacts are intended to be order 
of magnitude only.  For each type of use, there are a variety of factors imbedded in the assumptions 
that will affect the magnitude of fiscal impacts for individual users, including the level of capital 
investment, amount of new street lane miles added, lease rates and the presence of taxable sales.  
Note that industrial lease rates have increased significantly in the past six months, contributing to 
higher annual revenue impacts due to increased sales taxes. The combination of light industrial users 
that are anticipated for Parkway 303 could result in an annual net impact to the city of $1.49 million 
per year, excluding one-time revenues.  
 
• 
The overall rankings show low impacts for the shell building, medium impacts for leased warehouse, 
and medium impacts for leased manufacturing, given the reduced importance of equipment 
investment relative to property taxes.  These three scenarios represent the typical possibilities for 
light industrial land in Glendale.  The combination of uses proposed for Parkway 303 could produce a 
medium net impact, given the range of possibilities for light industrial uses. 
 
ANNUAL FISCAL IMPACTS OF STANDARD LIGHT INDUSTRIAL USERS  
AND PARKWAY 303 ANNEXATION 
 
 
 
 
 
 
 
 
Summary 
$40,000
$490,000
$470,000
$2,100,000
$20,000
$120,000
$150,000
$610,000
$20,000
$370,000
$320,000
$1,490,000
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
1M SF Shell
1M SF Warehouse
1M SF Manufacturing
4.38M SF Parkway 303
Revenues
Expenditures
Net Benefit
Parkway 303 Blended Avg

4 
 
These results frame the range of potential impacts that the Parkway 303 annexation could have on the 
city budget.  All of the user types shown here generate positive net fiscal impacts, but at varying 
magnitudes.  The long-term net impacts (revenues less expenditures) for Parkway 303 are estimated at 
$1.49 million per year, including $2.1 million in annual revenues and $610,000 in annual expenditures, 
excluding one-time taxes and fees.  The magnitude of the impacts is proportional to the size of the 
development at over 4.38 million square feet, and estimated annual revenues exceed expenditures by 
244 percent based on the assumptions used in this analysis.   
This analysis is intended to illustrate the range of possible impacts for development for the Parkway 303 
annexation. The actual fiscal impacts will depend on the mix of final users, as well as other factors such as 
construction cost and building value, lease rates and other project details.