2024 Bidders for Arizona TSMC Site Auction in Phoenix: Opportunities and Challenges

Multiple companies are competing to bid on a massive state land acreage around the Arizona TSMC campus.

arizona tsmc

Three major contenders have entered the ring in a battle for 2,300 acres of prime state land next to the expansive Taiwan Semiconductor Manufacturing Co. Arizona TSMC campus in North Phoenix. 

An Arizona state land auction for the mega-site surrounding TSMC is scheduled for May 29 with a minimum bid of $56.28 million, or roughly $24,000 an acre. A bidding war could be accepted by one of three real estate groups approved by the Arizona State Land Department to participate in the auction. 

According to an April 29 evaluation report by Recommended Gruen Gruen + Associates for the state land department, three potential bidders are:  

  • New York City Mack Real Estate Group.  
  • Real estate investors associated with Tempe-based W Holdings – a land company linked to the Wolfswinkel family. 
  • Industrial developer and investor Phoenix-based ViaWest Group.

Only entities that had specific experience and capital qualifications were approved to bid due to the extensive infrastructure, planning and development work required for the site. The estimated cost to build out the total infrastructure for the 2,300 acres is more than $1 billion. 

The auction winner must sign a contract with the state and invest hundreds of millions of dollars in infrastructure to develop the planned Sonoran Oasis Science and Technology Park, anchored by the $65 billion Arizona TSMC project. According to a state land spokesperson, this infrastructure investment will also help increase the property’s value. 

The approximately 2,300 acres around Arizona TSMC could accommodate a variety of uses, including 10 million square feet of industrial space (about the total floor space of the Pentagon), 12.8 million square feet of office space, 4.4 million square feet of retail, 568 hotel rooms and nearly 9,000 multifamily units, according to state land department. Once specific infrastructure milestones are achieved, the winning bidder can sell parcels to other developers or develop buildings itself. 

Competition is steep for land around Arizona TSMC.

The applicants were required to demonstrate at least 10 years of development experience, infrastructure improvements in commercial real estate sectors such as office, industrial and the ability to fund $150 million in infrastructure costs for the site and prove experience in planning, developing and financing a commercial project valued at a minimum of $400 million. 

The State Land Department rarely imposes such stringent qualifications for an auction but has applied them to other large sites. In 2020, the state set similar requirements for 2,800 acres of residential land sold in Apache Junction also for infrastructure development. 

As anticipated, New York-based investment firm and developer Mack Real Estate Group was approved as a bidder, having initiated the auction for the Phoenix site in 2022. Mack Real Estate Group 

Mack Real Estate Group (MREG) is well versed in the Valley’s state land auctions or major development projects. The firm has won multiple auctions for large sites including Arizona TSMC supplier sites in north Phoenix and has been serving as the master planner on the 2,300 acres to prepare it for auction. 

MREG provided details on eight development projects, demonstrating their extensive experience developing large-scale infrastructure and commercial real estate projects, including residential, resort, and hotel properties. According to the report, the company has built a portfolio of 9,000 multifamily units and more than 4.5 million square feet of industrial space with projected total costs of $4.5 billion. 

Some major projects involving MREG leaders include the 3 million-square-foot Mack Innovation Park in Deer Valley, the 2,300-acre master-planned development, ChampionsGate in Orlando, and the 2.8 million-square-foot mixed-use Time Warner Center in New York City, among others. 

J.P. Morgan provided a letter supporting MREG, stating that it anticipates continuing working with Mack businesses and is considering helping finance the Phoenix property infrastructure given their 50-plus years of collaboration. 

Prominent real estate family interested in Arizona TSMC site.

An entity associated with W Holdings and Ashton Wolfswinkel (son of real estate mogul Conley Wolfswinkel), and Carson Brown of CLB Partners LLC, has also been approved as a bidder for the upcoming auction. Ashton Wolfswinkel declined to comment. 

Wolfswinkel and his team have undertaken significant land investments or developed expansive master-planned communities across Arizona TSMC, including the 8,000-acre Rancho Vistoso in Oro Valley, which includes 30 neighborhoods, nearly 9,000 homes, and an 800,000-square-foot power center that was built by Vestar. 

Wolfswinkel and Brown are currently collaborating on a 20,000-acre solar project in Harquahala west of Buckeye with solar companies such as Copia Power, Shell and NextEra, according to the state land report. The solar project could be the largest in North America with an estimated cost of $7 billion, the report added. 

The real estate investors informed the state that they have raised over $1 billion in equity and debt capital and have participated in land purchases and developments totaling more than $1.2 billion. 

In their submission, they highlighted longstanding relationships with sources of capital such as North Dakota billionaire Gary Tharaldson and Ronald Offutt, founder and chairman emeritus of R.D. Offutt Co., which encompasses RDO Equipment Co., a dealer of John Deere equipment, and R.D. Offutt Farms. 

According to the report, Offutt and other investors have shown interest in joining the bidding entity for the site, adding that Offutt has indicated it has the capacity to fund $150 million in project costs. 

Phoenix-based firm exploring land auction.

The third and final company approved to bid on the site is a joint venture between an undisclosed financial partner and ViaWest Group, which has been actively expanding its industrial investment and development portfolio in the Valley and other markets. 

Source: ViawestGroup

Steven Schwarz, a founding partner at ViaWest Group, stated that they are exploring the state land parcel.  

 

“It is a very complicated and challenging structure, but it’s a phenomenal piece of land,” Schwarz said in a statement.  

 

According to the state land report, ViaWest Group revealed that a “prominent individual” with a net worth of more than $2 billion has committed to funding for $150 million in project costs. The bidder plans to pay cash for the land purchase and secure some debt for development. 

ViaWest Group highlighted their expanding industrial portfolio, primarily in the Phoenix area, including The Base Industrial Park comprising 2 million square feet across 144 acres representing a value of $367 million. The company also detailed Williams- Sonoma national distribution center project that one of the founding partners of ViaWest Group was involved in during 2001 in Mississippi. 

The company stated it has been involved in more than 70 projects totaling $2.9 billion in acquisitions and project repositioning of primarily office buildings and ground-up industrial space development. Since it was founded, ViaWest Group said it has managed nearly $3 billion in developments and investments. 

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