From the September 24, 1999 print edition

Tech oasis touted for Valley

Ken Brown The Business Journal

Two square miles of glittering high-tech buildings, super-fast data lines, scattered Internet cafés, 24/7 services for workers on the go, and technology companies of every size and business model.

If the vision sounds like a technology fantasy in the middle of the Arizona desert, that's the point.

The Arizona Software and Internet Association is pushing for the creation of the Valley's first "technology oasis," a state-of-the-art facility designed for the unique needs of the high-tech industry. At least two cities -- Tempe and Phoenix -- are studying the idea.

"We're extremely interested," said Julia Rosen, of Tempe's planning department. "It's no secret we've been targeting high-tech companies and we would certainly welcome any opportunity to work with industry groups to make ourselves more attractive to that industry."

Planners at the city of Phoenix say they're equally interested and will present the idea before senior planning officials in the next week or so.

"It's the kind of thing we ought to be doing as a community," said Paul Katsenes, the city's deputy director of community and economic development. "The mayor told us several months ago to get to know this cluster and see what their needs are. This (tech oasis) plan appears to be a good one."

The concept would start with the creation of a single facility equipped with the latest telecommunications services, flexible leases, 24-hour security and access, proximity to residential housing and freeways, and other amenities designed with tech companies in mind. It also would have shared conference rooms, flexible room layouts and offices for venture capitalists and other investors.

Eventually, the center would grow into an area of two square miles or larger, meaning the initial facility would need to be in an undeveloped area.

Organizers at the software group say they got the idea from similar centers in other parts of the country. Ed Denison, former president of the Chicago Software Association and now president of the Arizona group, helped persuade Chicago Mayor Richard Daley to establish a similar center. But he says the Arizona facility would take the concept even further.

Unlike a technology incubator, which offers low-rent space and help from veteran technology executives, the center would lease at market rates and be a true business center.

Denison says he approached Tempe and Phoenix officials before developers because it would take a government effort -- perhaps on the scale of wooing a corporate giant to relocate here -- to make the project successful.

Scottsdale officials told him they didn't have room to build such a center.

No one has yet put a price tag on the project, but the plan calls for tax incentives for companies to locate in the facility and a substantial public relations effort by the city helping to build it.

The Arizona software group hopes its effort evolves into a local equivalent of New York's Silicon Alley or California's famed 101 Corridor, areas known for their dense concentration of cutting-edge tech firms. The point, backers say, is to jump-start the Valley's reputation as a high-tech nexus.

"This will turn into a community," says Denison. "I honestly believe something like this could make us a top-five technology center in the nation."

That could be a tall order. Last week, a study undertaken by the Morrison Institute for Public Policy for the Arizona Department of Commerce and Governor's Strategic Partnership for Economic Development stated that Arizona has a way to go before joining the big leagues of the software industry.

According to the report, Arizona "lacks the critical mass necessary to be called a true cluster and to be recognized, at the national level, as a significant center of software development activity."

And it's not clear how receptive developers would be to establishing a high-end center for an industry that more often boasts of future returns than of current cash flow.

Still, Katsenes and others say the plan is workable and could provide a much-needed boost for the state's fledgling tech sector, now becoming more attractive in the eyes of political and business leaders.

"The only thing that's outrageous about this plan is how complete it is," he said. "It's the first time we've worked with any industry on this level. There are some challenges, but we have challenges all the time."

Denison says the center would go far in boosting the state's economy. He hopes to create a mix of established companies and startups that would offer stability and create an atmosphere of collaboration, an environment difficult to create when so many of the Valley's most innovative tech companies are scattered across thousands of square miles.

"Right now, there's nothing like this in the Valley," Denison says. "This is unique because our industry is unique."

© 1999 American City Business Journals Inc.