Innovation

Why Bill Gates wants to build an $80M smart city utopia in Arizona

A company owned by the Microsoft co-founder is developing a new community from the ground-up based on cutting edge tech.

The smart city realm just took a giant leap forward with Bill Gates getting involved in the development of a sustainable, technologically advanced community in the Arizona desert.

An investment firm run by Microsoft co-founder Bill Gates has spent approximately $80 million on 24,800 acres in western Maricopa County, AZ, to create a smart city. Gates' company, Mt. Lemmon Holdings, is working with Belmont Partners, a real estate investment group, to create the proposed community, according to a press release.

"Belmont will create a forward-thinking community with a communication and infrastructure spine that embraces cutting-edge technology, designed around high-speed digital networks, data centers, new manufacturing technologies and distribution models, autonomous vehicles and autonomous logistics hubs," according to a press release from Belmont Partners.

​Bill Gates has always had impeccable timing, coming into sectors while there was still time to get an early mover advantage. Jesse Berst, chairman of the Smart Cities Council

The community will be known as Belmont, and could include as many as 80,000 homes, along with 3,800 acres of industrial, office, and commercial space. There will also be 3,400 acres of open space and 470 acres for public schools. The area is west of Phoenix, which is also in Maricopa County, and is approximately the size of Tempe, AZ, according to the press release.

"This will represent one of the best western examples that urban development can be built on a private sector ecosystem strategy," said Bettina Tratz-Ryan, research vice president for Smart Ecosystems and Cities at Gartner CIO Research Group.

Jesse Berst, chairman of the Smart Cities Council, said, "Bill Gates has always had impeccable timing, coming into sectors while there was still time to get an early mover advantage. He was early to the personal computing revolution. And the graphical interface revolution. And the Internet revolution. And now he's betting on smart cities."

No timeline was given on when construction will start, and no vendors have been named. Microsoft has its CityNext program of smart city technology that many speculate will be involved.

SEE: Smart Cities NYC '17: Microsoft's deep dive into smart city tech

Building a smart city in a greenfield development

This will be a greenfield development, which means that it's on undeveloped land with no existing infrastructure. Typically smart cities are developed around existing buildings with sewers and utilities in place, as well as people and the technology added tends to focus on individual projects, such as public safety, transportation, or parking. By starting from scratch, Gates will be able to create an innovative new community with a backbone that can support a range of technologies from the start.

"As this is a greenfield or new development without any legacy, the architecture dimension and the modeling of infrastructure can follow the latest cutting-edge innovation," Tratz-Ryan said. "However, this new city is also being developed in the desert. The city needs to address challenges around resource sustainability and urban liveability, new development in water recycling, virtual and augmented reality, energy distribution, local food supply, and connectors to other communities will be at stake. With Bill Gates leading it, there will be different ecosystem partners in the development of physical assets that are intelligent, or connected, from the start."

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Nearly 25,000 acres just west of Phoenix will be developed into a smart community.

Image: iStock/Ivan Paunovic

Greenfield developments aren't a new concept, with Europe and China already working on them, but this will be a first for the US.

"The very difficult challenge in these greenfield developments is they tend to not be agile in the tech they choose to allow for the fact that this area is rapidly changing and they risk having their tech be obsolete in five years," said Mark Dowd, executive director at the Smart Cities Lab and previous deputy assistant secretary for research and technology for the US Department of Transportation.

"Smart cities and new mobility are quickly evolving areas and it is a challenge to identify, at a moment in time as these planned communities are built on greenfields, what will make a city smart or how to anticipate the newest technology. If someone can do this, Bill Gates would be a good bet. My concern, though, is how they are defining a smart city. Is it the tech and digital capabilities? Or is it built on strong urban planning and design principles that de-emphasize single occupancy vehicles and emphasize shared mobility, de-emphasize large roads and emphasize places for people to congregate, and provide access to jobs and critical services so they [people] can age in place? Those are critical elements to what makes a city smart. It's not just the tech," Dowd said.

A smart city tipping point

The development could also serve as a tipping point for other smart city development.

"Any time someone with credentials as a thought leader makes a major investment in a space, it adds credibility. In particular, this move will further encourage private developers to bake smart city features into their new developments. It's not just cities, counties, and states that are moving strongly in this direction. The private sector sees the writing on the wall as well," Berst said.

Gates serves as an evangelist for technology, so he will likely be able to overcome challenges in smart city development that would hinder others. Smart city development is often slowed due to the need to work with local governments. Tratz-Ryan said she thinks Gates will be able to speed up that development process.

"There's a huge opportunity because Bill Gates is very much involved in sustainability and how you create zero carbon healthy types of communities so this city has great potential but it's also a challenge," Tratz-Ryan said.

The Arizona community will likely serve as a test incubator for smart city technology from Microsoft and other tech companies, speeding up the development of innovations that aren't yet possible in a brownfield development, said Scott Lundstrom, general manager of Smart Cities at International Data Corporation (IDC).

Ted Smith, former chief innovation officer of Louisville, KY, said, "I think you could look at a sequence of events starting with Apple's headquarters, then Amazon's HQ2 values, and now this from Gates. This is a trend toward bringing automation and data into places. It is a continuous phenomena with the stakes going up all the time."

As other cities work on their own smart city plans, the news about Gates and his Arizona development will likely spur more tech advances in other municipalities.

"It is putting pressure on separating the whiteboard cities from those that are taking the initial steps. I don't believe an existing city can 'plan' to be a smart city, it is a matter of constant effort taking one aspect at a time," Smith said.

Shawn Chandler, IEEE senior member and director at Navigant, said, "In terms of functionality, smart cities require fundamental capabilities in high-speed communications, and integration across typically fragmented IT systems in government, academia, and industry. Overcoming these challenges is something Bill Gates has had first-hand experience successfully developing and coordinating from his Microsoft days. His experience in global healthcare also positions him as a leader, and his access to industry partners is untethered. Given the typical roadmap for a smart city involves drawing fundamental systems together first, and creating an understanding for opportunities, I expect the near-term outcomes in Arizona will be watched carefully, and it will be a strong lever for success as a demonstration for others to patently follow and accelerate development worldwide."

People first, technology second

While smart city technology is important, it's also necessary to keep in mind that technology is the backbone, but not the purpose for the existence of a city, said Brooks Rainwater, senior executive and director of the Center for City Solutions at the National League of Cities (NLC).

"Cities are where innovation lives—increased investment and ideas demonstrate the draw—but the ultimate goal of a project like this should always be focused on creating more livable places for people," Rainwater said.

Impact of this smart city news

Overall, the news of the Arizona smart city development has created an excited stir among the tech community.

"Bill's goal to build an $80 million dollar development outside of Phoenix is certainly an ambitious goal—but with populations rising, pollution becoming a vital public health issue and the many challenges posed by natural disasters, ambitious development goals like this, where digital technology takes center stage, are exactly what our cities will need to thrive in 2018 and beyond," said Chris Atkins, vice president, digital government transformation, SAP Public Sector.

Cisco's Rowan Trollope, senior vice president and general manager of the applications group, said, "I'm thrilled to see Bill Gates making a move to create a smart city and the awareness it brings... We believe smart cities are critical for a sustainable future on our lovely planet."

Carl Piva, vice president of strategic programs for TM Forum, said, "This demonstrates that smart city developments are now entering mainstream global adoption. Bill Gates is always very thoughtful in the projects he gets involved with."

At the NLC, Rainwater said, "It is exciting to see Bill Gates and other technology billionaires so interested in cities, and I imagine that he will be a key player in smart city technology going forward."

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About Teena Maddox

Teena Maddox is a Senior Writer at TechRepublic, covering hardware devices, IoT, smart cities and wearables. She ties together the style and substance of tech. Teena has spent 20-plus years writing business and features for publications including Peo...

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