COLUMBIA, MD. -- The Rouse Co. has announced the beginning of one of the largest developments in the history of Phoenix and the largest project undertaken by the firm since it built the city of Columbia, Md.

The Arizona development, called Superblock, will cost $515 million. It will be an 18 1/2-acre mixed-used project, and will be built on eight city blocks, said officials of the Columbia-based real estate development firm.

"With a strong growth rate in both population and employment, metropolitan Phoenix has become one of the most important cities in the Southwestern region of the United States," said Mathias Devito, Rouse's chairman.

The project will include office space, retail shops, a 600-room hotel, a three-acre urban plaza and parking area.

The first phase of construction, which is expected to be completed by the fall of 1990, includes a 20-story office building in which the Arizona Public Service Co. will be the prime tenant.

The first phase also will include a second 300,000-square-foot office building and 150,000 square feet for retail space.

The project's future development will be determined by market demand, company officials said. It likely will include 1 million square feet of office space and 300,000-square feet of retail space.

Phoenix Mayor Terry Goddard said the project is the "key element" in revitalizing the commercial and cultural centers of the city.

Rouse has developed several specialty shopping centers, including Faneuil Hall Marketplace in Boston, Harborplace and The Gallery in Baltimore, and South Street Seaport in New York City.