Head East

The Los Angeles County Economic Development Corp. reports that the Inland Empire, led by Riverside and San Bernardino, will be the life raft for an otherwise floundering area economy.
        The community of Riverside's economic development division ranked 14th among local U.S. agencies in 2002 in the number of new jobs in its service area, with 1,224, and 14th in capital investment too, with just over $160 million invested. The area expects 31,675 building permits in the coming year, the state's highest, and the steady increase in employment that should accompany that construction.
        "Southern California has suffered in the Orange County area, because of the tech crash," says Wendell Clark. "There is an awful lot of office vacancy, and that may take another year or more to turn around. But the Inland Empire is a different story. Riverside has been really successful, primarily because of their utility rates. And if you've ever flown into Ontario, all you see is rooftops and skylights. Land prices and available space have forced people to look more into the east side."
        The Inland Empire's very popularity is leading to what James Flynn, president of developer The Carson Companies, calls a shortage of land available for industrial development, especially for warehousing and distribution users.
        "The Inland Empire has been the primary location for much of the industrial development in Southern California for the past 10 or so years, "he told an audience in February. "That land, especially in and around Ontario, is now almost fully occupied by industrial buildings and developers are finding it more and more difficult to secure new sites. At one time, industrial land was at the lower end of the food chain in terms of Southern California real estate development, but that has changed."
        Flynn says that's been good for his company, which saw a record year in 2002 thanks mainly to leasing activity at its Dominguez Technology Center and Chino South Business Park, but the future is up to the communities themselves, which shy away from the word "industry."
        "What they don't understand is that the further goods have to travel for warehousing and distribution, the more those goods ultimately cost consumers, and the more truck traffic we have on our freeways," he said.
        According to Cushman & Wakefield statistics, the 265-million-sq.-ft. (24.6-million-sq.-m.) industrial market of the Inland Empire – historically defined as Ontario, Rancho Cucamonga, Fontana, Chino and Mira Loma – is close to saturation with only 1,800 acres (729 hectares) of land available for new construction. Despite the dire warnings however, opportunities have occurred. Take Hager Pacific Properties' $10-million purchase of the 488,817-sq.-ft. (45,411-sq.-m.) distribution facility formerly operated by now-bankrupt grocer Helig-Myer. The new owners expect a quick turnaround in such a tight market, where the allure is being sweetened further by a planned 43.5 million-sq.-ft. (4-million-sq.-m.) industrial master development at the Southern California Logistics Airport in Victorville, and a new 1.3-million-sq.-ft. (120,770-sq.-m.) distribution facility for Wal-Mart is being constructed in adjacent Apple Valley, on over 200 acres (81 hectares).
        "There was a big effort on the city's part to win that," says Clark. "It was a long battle, with six individual landowners who had to be negotiated with to get the parcel. And all the time under secrecy, because the client didn't want to reveal who was coming to town."