New report says downtown Phoenix generated economic impact of $21.2B in 2022

Nov 9, 2023, 11:00 AM

A north-facing view from the PHXCityCam livestream shows downtown Phoenix buildings and constructio...

A north-facing view from the PHXCityCam livestream shows downtown Phoenix buildings and construction cranes on Nov. 9, 2023. Downtown Phoenix generated an economic impact of $21.2 billion in 2022, according to a new report. (PHXCityCam Screenshot)

(PHXCityCam Screenshot)

PHOENIX – Downtown Phoenix generated an “incredible” economic impact of $21.2 billion in 2022, according to a newly released report.

“The numbers were just incredible. They’re far greater than what I thought they were going to be,” Jim Rounds, president of Valley consulting firm Rounds Consulting Group, told KTAR News 92.3 FM after the report was released Wednesday.

Downtown Phoenix Inc., an organization that works with the city and other groups to promote the downtown area, commissioned Rounds Consulting Group to conduct the study.

“We need to continue the policies that have made downtown successful, which include strategic business development, partnerships with universities, an increase in retail, and considering new and inventive means to attract both market rate and affordable housing,” Mike Ebert, managing partner of RED Development and Downtown Phoenix Inc. board chair, said in a press release. “With this sustained approach, we’re on track to achieve great things.”

How fast is downtown Phoenix economy growing?

The findings for 2022 showed 11% growth since a similar 2018 study showed a $19.1 million economic impact.

“Downtown, because it’s diversified and they’ve added a lot of higher-wage jobs, has become a very unique economic epicenter in the greater Phoenix area,” Rounds said.

For the purposes of the study, downtown Phoenix is defined as the area between Seventh Avenue and Seventh Street bordered by McDowell Road on the north and Jackson Street on the south.

About half of the downtown impact, approximately $10.1 billion, was directly attributed to visitor, event, business, construction, worker and residential activity. The rest of the impact came from indirect sources.

“Early on, they had to incentivize a lot of projects,” Rounds said. “Now, there’s extra momentum going in. More importantly though, they’re becoming an epicenter for high-wage jobs in biosciences, in software engineering, cybersecurity — things of that nature where you don’t need a big industrial presence.”

How many people live, work in downtown Phoenix?

The downtown area had nearly 24,000 residents in 2022 and supported about 140,000 jobs, including about 50,000 high-tech manufacturing employees, according to the report.

All the activity resulted in $8.6 billion in personal income and $635.1 million in state and local taxes, providing benefits well beyond the downtown boundaries.

“On the tax revenues, everybody gets a piece of that,” Rounds said. “The state gets several hundred million dollars every year. The county gets about $90 million, and the city itself gets over $100 million. … What they’re doing is working.”

What does future hold for downtown Phoenix economy?

In addition to assessing 2022, the reported looked at the future, which Rounds said is bright.

The study projected downtown employment to increase by about 6,700 jobs, or 10.6%, over the next five years.

Another 2,900 multifamily housing units are expected to be added over the next five years, along with 260,000 square feet of retail space.

“For what it’s worth, we’re very surprised with these numbers, they’re very strong, and I think going forward they’re going to be even bigger,” Rounds said.

“This is going to be one of those cases where they’re going to do very well in the downtown area during the next economic downturn and be one of the strongest subregions in the state growing going forward.”

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New report says downtown Phoenix generated economic impact of $21.2B in 2022