Old Base, New Base

        Another former military installation, March Air Force Base in Riverside Co., is now being transformed, 10 years after its realignment, into a 16-million-sq.-ft. (1.5-million-sq.-m.) development called Meridian, right next door to the Global Logistics air cargo development project. Ground was broken for the first 250-acre (101-hectare) phase of the 1,000-acre (405-hectare) development in October 2003. Lennar Partners is pouring $15 million into this first phase, and $100 million overall. And the firm is looking to do the same type of military redevelopment with Mare Island Naval Shipyard and Hunter's Point Naval Shipyard in the northern part of the state.

Kosmont-Rose Institute Issues Annual CODB Survey Expanded to 314 cities across the U.S. from 234 last year, the 10th annual Cost of Doing Business Survey from Kosmont Companies of Los Angeles and the Rose Institute of State and Local Government at Claremont McKenna College showed the following California cities to be relatively low-cost locations with populations over 100,000: Anaheim, Bakersfield, Corona, Escondido, Moorpark, Ontario, Orange, Rancho Cucamonga, San Diego, Santa Clara and Simi Valley. Cerritos, Rosemead and Santa Clarita earned the same honor among California cities with populations between 50,000 and 100,000.         The report noted the rising growth of smaller, low-cost municipalities. Case in point was the relocation in January 2004 of Quality Foam Packaging from its Irwindale facility near L.A. to a new 70,000-sq.-ft. (6,503-sq.-m.) building in Lake Elsinore, part of a cluster of cities in southwest Riverside Co. now branding themselves as Southwest California. Another case is the nearly 10-year presence of Bertelsmann AG subsidiary Arvato Services in the Santa Clarita community of Valencia. Sven Hohmann, executive vice president of consumer services for Arvato, says the company sold a plant on the site in 2003, but the overall complex has grown over the years "despite all the disadvantages California has. It still is one of the most populated states in the U.S., and clients appreciate the local base, where they can stop by easily."         The Kosmont survey looks at six categories of locally and state-imposed taxes: business, telephone, sales, electric, property and state income. It does not address, however, the state's continually rising housing costs. As of January 2004, the percentage of California households able to afford a median-priced home was 23 percent, six percentage points lower than in January 2003. The median price? $405,720, requiring a minimum household income of $94,020.

        Lennar is partnering with the area's Joint Powers Authority, which incorporates leaders from the City of Riverside and its surrounding county, Merino Valley and the City of Perris. Michael Morris, vice president of commercial development for Lennar Partners, says the Riverside area's affordability factor in housing may have shrunk slightly, but not its advantage in affordable power. And he notes that even though "people have been saying we're running out of land for 15 years, we're a lot closer than we were before."
        The Meridian project will focus on everything from warehouse to light industrial and be served by rail service from BNSF – a plus in an area without that many tie-ins to the heavily traveled rail corridor between the ports and the U.S. Midwest. The park will make the most of its adjacency to the Global Cargo Port and its 13,000-ft. (3,900-m.) runway, as well as its possession of Free Trade Zone No. 244. So far, says Morris, the corporate queries are coming from logistics users, an out-of-state beverage company wanting to expand to California, a food processor and a mid-tech manufacturer. He's also looking to another upcoming project nearby – the 4.5-million-sq.-ft. (418,050-sq.-m.) Sierra Business Park in Fontana – to help satisfy the demand for build-to-suit space.
        As for the state's business climate, the move-out may appear to be monolithic, but by no means is appearance reality. Morris says that people in Southern California are more bullish than they have been in the past few years.
        "As the population continues to grow, Southern California is a 20-million-consumer market, eight percent of the U.S.," he observes. "Certain companies will always need to be here."