COVER STORY, DECEMBER 2004

CITY SESSIONS
Economic development efforts pave way for progess.
Haley Shuler and Brian A. Lee

Behind the scenes and removed from the headlines big real estate developers make with their often-expansive projects are the economic development officials who serve their cities’ populations by facilitating smart growth and increased job opportunities. Western Real Estate Business recently looked at some cities to see how they work to achieve these progressive goals.

Rancho Cucamonga, California

A range of relatively affordable to executive-style housing; upscale shopping, dining, and entertainment amenities; a pro-business philosophy; and an advantageous location, just 5 minutes from the LA-Ontario International Airport and close to rail and three major freeways are some of the benefits of developing in Rancho Cucamonga, says Mike Nelson, senior redevelopment analyst for the city. Judging by the city’s growth, that’s a pretty successful formula.

The city’s retail/services sector is alive and well as evidenced by the tremendous amount of development activity. The 1.3 million-square-foot Victoria Gardens Lifestyle Center, developed by Forest City Enterprises and Lewis Retail Centers, opened in late October. The shopping, dining and entertainment district features a cultural center, four major anchors and 120 in-line retailers as well as a theatre and many restaurants. Just down the street, the 300,000-square-foot Foothill Crossing power center, an O&S Holdings development, opened its Sears Grand anchor store with many other retail tenants to follow.

A 112-room Marriott TownePlace Suites Hotel is just one of five new business-class hotels that are planned for Rancho Cucamonga, California.

Five new business-class hotels are planned for Rancho Cucamonga: a 112-room Marriott TownePlace Suites Hotel, a 93-room Holiday Inn Express, a 117-room Courtyard by Marriott, a 122-room Hilton Garden Inn and a 103-room Homewood Suites. A 197,000-square-foot Universal Technical Institute facility opened in September, and a new 57,000-square-foot community/senior center is set to open this winter.

“The [Rancho Cucamonga] redevelopment agency will focus on corporate office users, company headquarters, call centers as well as the bio-medical/pharmaceutical industries,” says Nelson. Haven Avenue is the city’s primary office corridor. The agency will continue to enhance the manufacturing and distribution sectors in the city of 154,800 people. New development will be courted through the continued improvement of Rancho Cucamonga’s infrastructure and the marketing of its community appeal.

Albuquerque

Despite the typical arid weather associated with New Mexico, Albuquerque’s business climate is anything but dry. Boasting a population of 758,527, Albuquerque is located some 60-plus miles southwest of the capital city of Santa Fe and only minutes from Interstates 40 and 25.

The city of Albuquerque features a unique blend of characteristics that attracts developers across several industries. “Competitive real estate, labor and utility costs, positive business climate, productive workforce, great quality of life, reasonable cost of living, and a growing population” are some benefits of developing in the city, according to Marisa de Aragón, research manager for Albuquerque Economic Development (AED).

Albuquerque’s metro area is focusing on recruiting companies from several cluster industries including information technology, biotechnical/biomedical, financial services, electronics, nanotechnology and microsystems, and aviation/aerospace, notes Aragón. Local economic developers and government officials are working to further develop an aviation-related industrial park at Double Eagle II Airport, located on the city’s west side at 7401 Paseo del Volcan N.W. “The growth of the area’s aviation cluster will be at the forefront of the city’s economic growth,” says Aragón.

Currently, Tempur-Pedic is constructing a $90 million mattress manufacturing facility on the city’s west side. The 750,000-square-foot facility, scheduled for completion in summer 2006, will be the company’s second U.S. plant.

AED’s approach to attracting new development involves “creating local and national awareness of Albuquerque’s business climate through various marketing methods and leading proactive initiatives including infrastructure development, business-friendly legislation and economic development alliance,” Aragón says.

In the next few years, the organization will continue to recruit quality companies to the metro area and reach out more extensively to local businesses through its local retention and expansion program. With Albuquerque’s sponge-like business climate leading its appeal, there is ample room for the city to soak up large-scale industrial development in the future.

Ontario, California

Located 35 miles east of Los Angeles within the hub of Orange, San Bernardino, Riverside and Los Angeles counties, the city of Ontario, bearing a population of 167,921, is not to be overshadowed by its big city counterparts.

Dubbed the gateway to Southern California, Ontario boasts the fastest growing economy in the Inland Empire, which is evidenced by its line up of large-scale developments. “Because of the major influx of highly educated and skilled professionals, Ontario will see an increase in Class A office space and high-end residential communities,” says Mary Jane Olhasso, economic development director for the city.

In 2005, J.H. Snyder Company will redevelop Ontario’s Downtown Civic Center. The 12-block area will include 750 residential units, 100,000 square feet of ground-floor retail, and 200,000 square feet of office space and academic facilities in cooperation with the University of LaVerne Law School.

“Ontario is committed to a policy of investment and reinvestment,” says Olhasso. “By investing in projects such as the redevelopment of the Downtown Civic Center, it not only preserves its 100-year-old history, but it attracts new business by way of using mixed-use concepts to meet the increasing demand for services, housing and business.”

Panatonni Development will construct Piemonte at Ontario Center, a 24-hour urban community that will include 309,280 square feet of retail space. The entertainment district will comprise a 45,800-square-foot health club/fitness center and an 8,000-seat sports and entertainment arena.

Piemonte at Ontario Center will serve the needs of vacationers, business travelers and residents alike. A 200-plus room high-end business/headquarters hotel and restaurant will complement the 550,000 square feet of Class A office space on site. Residents will be able to choose from the project’s 806 for-sale units and 769 multifamily units.

Ontario’s long-term vision to create a high-quality environment where residents can live, work and play with a sense of individual neighborhoods is the goal of New Model Colony, according to Olhasso. Still in the planning stages, the 8,200-acre annexation to the city will include high-end homes, parks and pathways, retail centers, health facilities and schools, with ample room for expansion.

Ontario’s new projects demonstrate the city’s goal of boosting the number of corporate firms inhabiting the city by increasing its upscale residential communities and lifestyle centers. “The high cost of housing in Southern California’s coastal communities has driven recent population growth in Ontario, [which is] feeding the retail demand,” notes Olhasso. The increase in quality housing has encouraged an influx of residents, creating a vast and highly educated labor pool.

LA-Ontario International Airport (ONT) is a significant catalyst for greater retail development, says Olhasso. ONT served 6 million passengers in 2003 and is on track to serve 7 million by year-end 2004. “Ontario also boasts one of the most successful regional shopping centers in the nation, Ontario Mills, which served more than 23 million people in 2003,” she adds.

The success of the Ontario Convention Center, located two blocks from ONT and within walking distance of multiple hotels, is more evidence of the city’s continued development. “The population delivered by this combination of hotels, airport and convention center only adds to the already dynamic residential and commercial population growth occurring in Ontario,” Olhasso says.

Boise, Idaho

Green isn’t just the color of the foliage in the City of Trees — Boise. Development dollars are pouring into Idaho’s capital, according to Jeffrey Jones, economic development manager for the city, which has a population of approximately 200,000.

A mixed-use development and medical project are in the works in Boise, Idaho.

Under construction currently is the $60 million BoDo-Downtown Boise mixed-use development. Developer Mark Rivers of Brix and Co. is constructing two three-story buildings, consisting of 240,000 square feet of retail and office space, and an 11-story tower that will comprise 110,000 square feet of retail, hotel and parking space. One of the three-story structures, the Capitol Gateway Building, will house an 11-screen multiplex theater, an Ann Taylor Loft store and the downtown offices of Colliers International. Retail space for the three buildings totals nearly 75,000 square feet. Target opening date for the urban mixed-use development is October 2005.

Also, development of the $162.2 million Saint Alphonsus Center for Advanced Healing is underway in Boise. The project, which will feature a nine-story patient care tower and a 16-suite surgical operating theater, is scheduled for completion in 2008.

The Boise economic development team seeks to attract a wide range of businesses to its city, including food manufacturing, computer and electronics, business support/back office, information technology, communication, finance and insurance companies as well as arts, entertainment and recreation tenants. Jones says he and his staff do this by adopting a regional approach to economic development, marketing the city based on its existing industry clusters and implementing a fast-track building permit review process. Increasing the city’s infrastructure capacity and partnering with area colleges and universities helps the cause, too.

“When adjusted for cost of living, Boise’s output per capita is the highest in the country,” says Jones. “Boise continues to attract people from all over the nation thanks to low costs, a high quality of life and job growth that has risen more than three times the national average during the past 5 years.”

Clovis, California

Clovis’ economic development team is always interested in facilitating new retail development in its city, says Michael Dozier, community and economic development director for the city of Clovis, which has a population of more than 80,000. This focus centers on three major retail districts in the city: the older Shaw Avenue corridor; Herndon Avenue, Clovis’ newest district, located near the main growth areas; and Clovis Avenue, which constitutes the backbone of the city.

Sacramento, California-based Sierra Crest Equities is busy in Clovis with a 23,000-square-foot retail center under construction at the northwest corner of Clovis and Herndon avenues and the groundbreaking next month on a 10-acre mixed-use development across the street. The mixed-use project will feature an ITT Technology school, two restaurant pads and a hotel. Regency Centers has received approval for its 40-acre retail development on Herndon Avenue, which will include a Target store. Also, the 580,000-square-foot Sierra Vista Mall, Clovis’ only regional mall, is planning a major outdoor expansion to include a 12-screen theater, bookstore and inline and pad restaurant space.

According to Dozier, the city has contracted with Buxton to document its demographic information and to identify retailers that complement that profile. “We need specialty stores such as electronics, furnishing or home stores and sporting goods for example,” he says. When the study is complete next month, Clovis’ retail development programs will be more in line with the needs of its population. Dozier says that Clovis’ annual average of 1,500 new homes — most of which are of the high-end variety — in the last 5 years indicates that retail demand is growing.

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