Phoenix remains one of the nation’s fastest-growing development markets, attracting investment across industrial, residential, mixed-use, semiconductor, data center, logistics, and advanced manufacturing sectors. As growth accelerates, utility readiness is increasingly determining where and how projects move forward.

According to Scott Lucas, Senior Civil Project Manager in Core States Group’s Arizona office, utility feasibility is no longer a late-stage design consideration. It’s now a critical factor in site selection and due diligence

Q: What are the biggest utility constraints shaping development in Phoenix right now?

Scott Lucas:

The two biggest issues we’re seeing are power and water, but they’re very different challenges.

On the power side, service is still available for many commercial, multifamily, and infill developments. Projects are more complicated with high-energy users like data centers, semiconductor facilities, advanced manufacturing, cold storage, and other large industrial operations.

Water is a different conversation. In many cases, it’s not that water isn’t available; it’s that developers need to understand the long-term regulatory, entitlement, and infrastructure requirements, especially in high-growth areas that rely heavily on groundwater.

Q: Why is power capacity becoming such a critical site selection factor?

Scott Lucas:
One of the biggest misconceptions is that being inside a utility service territory means power will be available when you need it. That’s only part of the picture.

Today, developers need to understand available capacity, utility connection timelines, infrastructure upgrades, who’s responsible for funding those improvements, and whether transmission constraints could affect the project. For large-load users, those details can determine whether or not a site is financially feasible. When utility constraints and schedule challenges affect speed to market, certain sites fall out of the cost-benefit realm.

That’s becoming even more important as Phoenix continues attracting data centers and other high-energy users. Metro Phoenix ranks second in North America for planned data center development, which is putting additional pressure on utility infrastructure.

We’ve reached a point where a site with confirmed power capacity can be considerably more valuable than one that falls within the right utility service territory.

Q: How are water constraints influencing edge-growth development?

Scott Lucas:
Water is having the greatest impact in some of the high-growth areas on the eastern and western edges of the Phoenix metro area. Developers in Arizona need to show that a project has access to enough water to support long-term growth.

That doesn’t mean development stops, but it does mean developers need to understand water availability, service providers, entitlement requirements, and infrastructure strategies much earlier in the process.

Sites served by established providers and existing infrastructure are often better positioned. We may also continue to see more interest in higher-density and mixed-use development where municipalities and developers can make efficient investments with diverse infrastructure hubs that serve the local community.

Q: What do developers often underestimate in emerging growth areas?

Scott Lucas:
Developers often underestimate how much infrastructure determines whether land is truly feasible for development.

In rural or emerging growth areas, available land doesn’t always mean the site can be developed quickly. Utility extensions, power upgrades, water access, off-site improvements, floodplain considerations, jurisdictional requirements, and municipal approvals can all affect feasibility.

Major infrastructure upgrades can add one to two years to a project schedule. Substation construction, transmission improvements, permitting, utility coordination, and long-lead equipment procurement can all extend timelines.

That’s why early civil planning and utility coordination are so important. A site may look attractive on paper, but once you evaluate the infrastructure, phasing, entitlement path, and cost obligations, the risk profile can change quickly.

Q: Are microgrids becoming part of the solution?

Scott Lucas:
They are becoming part of the conversation, especially for large industrial, manufacturing, and mission-critical facilities.

For certain projects, microgrids can provide resiliency and flexibility while larger utility upgrades are being completed. Solar, battery storage, and backup generation are also being evaluated more often as part of these strategies.

At the same time, microgrids are not a universal solution. They require significant investment, utility coordination, and long-term operational planning. They can be very effective for the right project, but they need to be evaluated early and carefully.

Q: What should developers be doing earlier in the process?

Scott Lucas:
Utility coordination needs to start much earlier, and it needs to involve the full project team.

Civil engineers, municipalities, utility providers, land use attorneys, brokers, and developers all play a role in determining whether a site can realistically support the intended use. In underserved or rural areas, land use attorneys and municipal planners are often critical to structuring agreements around annexation, zoning, infrastructure funding, development agreements, and long-term growth planning.

We are seeing more focus on identifying utility-ready opportunities or, at a minimum, clearly communicating infrastructure constraints upfront.

Quick-turn feasibility analysis is becoming one of the most effective tools in that process. Mapping, floodplain analysis, infrastructure assessments, and conceptual site planning can help identify fatal flaws and hidden costs before major capital is committed.

In a competitive market like Phoenix, speed and clarity during site evaluation can create a meaningful advantage.

Q: Looking ahead, how do you expect utility readiness to shape growth in Phoenix?

Scott Lucas:
Over the next decade, utility availability will be a defining factor in where and how Phoenix grows.

Areas with existing infrastructure capacity, proactive municipal planning, and coordinated utility investment will be best positioned to attract large-scale development. Emerging growth corridors will require more phased infrastructure planning, utility coordination, and long-term water and energy strategies.

For owners and developers evaluating opportunities in Arizona, understanding utility feasibility early will be critical to making informed site decisions and keeping projects moving.