The 26 largest construction projects to break ground in the Southwest in 2016 total $6.07 billion, down from more than $8 billion in 2015.

Despite the lower figure, major developments are underway in Arizona, Nevada and New Mexico.

Tammy Carr, a principal at Mortenson in Phoenix, says the higher total for 2015 could be attributed to pent-up capital coupled with positive economic indicators, low interest rates and major public infrastructure projects. In contrast, she says the total for 2016 follows an interest rate increase by the Federal Reserve; more job creation in financial services and technology development; and a significant increase in merger and acquisition activity.

For 2016, the top three projects were the Arizona Loop 202 (also known as the South Mountain Freeway) in Phoenix, at $916 million; Nevada’s Project NEON, with a $600-million price tag; and New Mexico’s $550-million Broadview Energy wind farm near Clovis.

ENR Southwest 2016 Top Starts

Arizona Loop 202 is the state’s largest freeway project. The 22-mile stretch of road will directly link the metro area’s East and West sides and provide an alternative to Interstate 10 through downtown Phoenix. Loop  202 is expected to open by late 2019.

And the Loop 202 will likely have ripple effects in Phoenix. When a freeway project becomes reality, “that is a great place to build some stuff,” says Mark Minter, executive director, Arizona Builders Alliance.

“After a brutal [seven to nine] years, we are actually seeing some excitement in the industry.” Minter adds. “We are starting to hire people.

“A few years ago, Schuff Steel didn’t have an ironworker in the field in Arizona,” Minter says. “Now, they are looking at mid-rise, high-rise stuff at several locations in the state.”

Arizona is also home to other major projects: a $200-million Ritz Carlton hotel in Phoenix; the $239-million Banner University Medical Center, also in Phoenix; and Opus 7th Street in Tempe.

Set for completion in late 2019, Project NEON involves widening 3.7 miles of U.S. Interstate 15 running through downtown Las Vegas and the Strip. It’s considered Nevada’s largest public works project to date.

“Project NEON is extremely important,” says Jeremy Aguero, principal analyst for Applied Analysis in Las Vegas. Not only is the project employing a large number of workers, “it is a targeted investment that focuses on the worst congestion corridor in the urban valley,” he says.

A big freeway project isn’t the only thing happening in the Silver State. MGM Resorts International is overseeing a $450-million upgrade of the Monte Carlo hotel and casino and a $77-million expansion of the Aria convention center.

In New Mexico, the Broadview wind farm is scheduled to be finished early this year. When online, its 200 wind turbines will produce up to 500 megawatts of energy.

A second New Mexico project that has attracted considerable attention is the $250-million Facebook data center in Los Lunas, described as “quite a victory” by Mike Puelle, CEO of the Associated General Contractors of New Mexico. “The big projects are providing hope for the state,” Puelle says.

Health care projects, including the $135-million Presbyterian Hospital and Medical Campus in Santa Fe, are another New Mexico growth area.

However, one concern, Puelle says, is that New Mexico is trying to close a deficit and pass a balanced budget. Achieving that could limit state level public works. “We’re absolutely going to need the private market and federal government to make up for that,” he adds.

For Nevada, Aguero says much has changed, including a restructuring of state economic policies as well as the type of projects being built.

While Project NEON involves public roads in Southern Nevada, the state’s northern half will be home to Tesla’s massive gigafactory, now being built outside of Sparks, and the Switch data factory near Reno.

Along with creating thousands of jobs, Tesla has changed the dialogue on Nevada, making it a player on the national stage, Aguero says.