Tale of 3 Cities Revisited 09-2025
The purpose of this report is to show the strengths and weaknesses of Tucson, Arizona, and its sister cities, namely Albuquerque, New Mexico and El Paso, Texas. This trio is a sisterhood, as they have many commonalities including climate, and population size. They also all share the distinction of a military base and a university. The statistics and data shown herein illustrate the big picture and may not reflect exact figures. Since our last publication in June of 2024, there has been some changes. There is currently less emphasis on renewable energy, and more emphasis on AI and technology. The three cities are also seeing major market shifts like the rest of the nation, due to tariffs, immigration policies, and significant changes to federal priorities.
Tucson, Arizona
Tucson is about 60 miles north of the US-Mexico border and about 100 miles south of Phoenix, Arizona. The metropolitan population is about 1.08 million. Major industries in Tucson include defense/aerospace, healthcare, and mining. The University of Arizona is a major economic driver in the Tucson area. A large entertainment venue is currently under construction, known as the Mosaic Quarter along the southeast side of I-10 and Kino Parkway. The project will include a 3,000-seat ice rink, large field house, sportsplex, and pavilion.
The current real estate trends have changed since last year, with less emphasis on solar energy, and more focus on the AI and tech industry. Tucson has also become a distribution hub for Tale of 3 Cities AM Valuation Services Page 2 Southern Arizona with the Port of Tucson. The Port of Tucson is a full-service inland port, rail yard and intermodal facility. The port consists of 767 acres with 50,000 linear feet of rail track, with cold storage, dry storage, distribution, and manufacturing. There are four Amazon facilities in the Tucson area: the 857K SF Fulfillment Center built in 2019, the 49,500 SF “Last Mile” facility, 270K SF Delivery Station, and the newest is a 220K SF facility in Marana. The Marana facility has been completed, and currently operating at about half capacity. Tucson International Airport continues to expand with new upgrades, safety enhancements, expansions, and maintenance projects. In 2026, Tucson Electric Power is anticipated to complete the Roadrunner Reserve project, which is a 200-megawatt, and 800-megawatt-hour batter energy storage system located in southeast Tucson. This project will have the capacity of powering 42,000 homes for four hours.
The most controversial potential development is “Project Blue”, an Amazon-linked AI data center facility. The facility would be rolled out in two phases, and would create about 3,000 temporary construction jobs, and about 180 permanent positions. The jobs would come at a significant cost of Tucson’s potable water supply, and excessive electricity use. The TEP power plant would have to be expanded with a fossil fuel power plant, and reclaimed water would have to be further cleansed to potable quality. The data centers are also loud, and the additional power usage would result in more air pollution. The City of Tucson council rejected the development with a 7-0 vote, but the project backers are still trying to get the project through Pima County, and Arizona Corporation Commission. As of September 2025, the project is looking less likely, but is still a possibility.
In April of 2025, Sion Power Corporation, a Tucson-based battery developer for electric vehicles installed a new large-format battery cell production line at its manufacturing facility. Becton Dickinson completed a 120,000 SF final stage manufacturing and sterilization facility on 32 acres, on the northeast side of Kolb Road and Valencia Road in 2025. The company says that the facility will employ about 40 skilled people. Hudbay Minerals is beginning Copper World Complex on the west side of the Santa Rita Mountains, about 28 miles southeast of Tucson. Copper World Complex is anticipated to be a 44-year mining project and will create 400 direct jobs. As of early 2023, Hudbay was carving roads, drill pads and clearing ground for tailings piles. On January 2, 2025, it was announced that Hudbay Minerals received an air quality permit for Copper World Complex.
