Nexus for Moving, If Not Making

        The projected increase in goods shipped through the Ports of L.A. and Long Beach correlates directly to demand for warehouse space in the region as a whole.
        One of the companies benefiting from $8.5 million in job training funds made available through the state's Employment Training Panel in January 2004 is the Walgreen Co., which is building a new 660,000-sq.-ft. (61,314-sq.-m.) distribution center in Moreno Valley that will employ 583 people and serve stores in Southern California and parts of Arizona and Nevada. Walgreens corporate real estate and logistics executives were not available for comment.

Illinois-based Salton Inc. just moved into this distribution complex in Redlands.

        But as is typical of the give and take in California, the ETP's funding is drained. The agency's Web site stated it plainly in April: "Training under projects approved for FY 2004-05 funding cannot begin until approval of the California State Budget, which, at the earliest, would be July 1, 2004."
        Near Moreno Valley, in the city of Redlands, USAA Real Estate Co. paid $36.7 million in November 2003 the newly completed 983,986-sq.-ft. (91,412-sq.-m.) distribution facility built for Lake Forest, Ill.-based Salton, Inc., as part of the master-planned Redlands Business Center. Salton is the designer, marketer and distributor of small appliances under such brand names as George Foreman, Westinghouse, Toastmaster and Melitta, as well as tabletop products, time products, lighting products and personal care and wellness products.
        In the city of Rancho Cucamonga, Nashville-based Ozburn-Hessey Logistics (OHL) has opened its first California facility, a 100,000-sq.-ft. (9,290-sq.-m.), 25-employee operation devoted to Elyria, Ohio-based client Invacare, a maker and leading distributor of home medical products that was recently named to the FORTUNE 1000 for the first time.
        In a reversal of the steady trend, the company actually relocated the operation from Sparks, Nev., to southern California. John Peddie, COO for OHL, says that with the opening of a 177,000-sq.-ft. (16,443-sq.-m.) facility for another client in Carson, Calif., in mid-April, the company already has doubled its California space, driven primarily by customers importing from the Far East.
        "They want us to be closer to the ports so you can break down the product and redistribute it, in some cases direct to their customers," he tells Site Selection. "At Invacare, their customer profile has changed, and from a transportation-cost standpoint, it was more effective to distribute their product out of California in lieu of Reno-Sparks."
        Validating this trend and its own property research, which shows a prompt comeback in the L.A. Basin, ProLogis in March 2004 acquired two buildings totaling 1.2 million sq. ft. (111,480 sq. m.) in the Inland Empire, fully leased by its customers Kraft and Wal-Mart. ProLogis owns more than 11.2 million sq. ft. (1 million sq. m.) in this submarket.
        In addition, Texas-based mega-developer Hillwood is developing a 450-acre (182-hectare) logistics/distribution hub known as AllianceCalifornia at the former Norton Air Force Base, already home to operations from Kohl's and Mattel. In true Texas style, that project received its latest boost in mid-March 2004 from a planned $200-million, 2.2-million-sq.-ft. (204,380-sq.-m.) headquarters and distribution center on 160 acres (65 hectares) for the regional Stater Bros. Markets grocery chain – which will be the largest warehouse under one roof in the whole region.
        The project will employ some 2,000 when it opens in 2006, and will consolidate the operations of eight separate facilities.