FEATURE ARTICLE, MAY 2005

ATTRACTING ATTENTION
How do economic development agencies draw in developers to their cities?
Haley Shuler

The main task of economic development agencies is to promote citywide growth and job opportunities. But how do these agencies attract developers and how do the developments create jobs and all-around growth for a city? Western Real Estate Business contacted economic development officials in several western cities to find out about new developments and the role that economic development agencies play in attracting these developments.

Pomona, California

Linking the booming Inland Empire and the prosperous San Gabriel Valley, the city of Pomona is focused on developing mixed-use centers and revitalizing its downtown. Pomona, with a population approaching 157,000, offers direct access to five major Southern California freeways, making it attractive to developers of all kinds.

“Pomona’s economic growth is being fueled by affordable real estate costs, a strategic and convenient location and a reliable transportation infrastructure,” says Irma Mendoza-Horvath, business development manager for the city of Pomona. “Pomona offers great business and development opportunities for renovation, redesign and reuse of existing facilities.”

Mission Promenade is a three-story, mixed-use building in Pomona comprising office and retail space, as well as 26 residential units.

Urban Pacific Development is underway on CityView at University Village located in the 200 and 300 blocks of East Third Street in downtown Pomona. The infill residential community will comprise two four-story buildings totaling 182 loft-style homes. Each building will be built upon a single-level semi-subterranean parking garage. The ground level of the building that fronts Palomares will feature approximately 9,000 square feet of retail space.

The construction of 700 Corporate Center Drive, located within the 50-acre master-planned office park called University Corporate Center, is also underway. The 86,120-square-foot office building offers immediate access to San Bernardino, Orange, Corona and Foothill freeways.

“The city’s Downtown Specific Plan calls for a lifestyle change for the area, one that includes more eateries, and unique shopping experiences to complement the existing galleries and antique shops and Fox Theater,” says Mendoza-Horvath. “The city is looking to bring-about a renaissance of the downtown and thus is looking to attract in-fill developments, specifically mixed-use high-density (condominium/lofts) residential projects.” The urbanization and revitalization of downtown and along Pomona’s major arterial thoroughfares is a top priority.

The city will also focus on transit-oriented development with higher-density commercial and residential uses, and mixed-use development that encourages vertical combinations of commercial and residential land used in designated areas.

“We’re working closely with the commercial real estate community to attract the variety of commercial developments Pomona desires,” Mendoza-Horvath. “We also exhibit at various events to heighten the awareness of our target audience and expose them to the excellent business and development opportunities Pomona has to offer.”

The city is also concentrating on attracting the high-tech industry to bolster the area’s economics and increase job opportunities for Pomona’s residents. “Retention and expansion of the strong industrial base that Pomona enjoys will provide jobs for so many,” says Mendoza-Horvath.

Pomona is a city poised for success. Its increasing mixed-use developments and the revitalization of its downtown will content residents as well as locating businesses. “Besides high density, an extensive market reach, accessibility and very competitive real estate costs, we’re an under-served community with a young, increasingly well-educated and upwardly-mobile population that is eager to realize their full potential and attain a piece of the American Dream and all that comes with it,” says Mendoza-Horvath.

Scottsdale, Arizona

Boasting a population of 225,000, the city of Scottsdale, Arizona, is undergoing major redevelopments to its downtown and southern sections. According to the Scottsdale Commission and Visitors Bureau, nearly $1 billion in both public and private investment has begun or is planned to take place in downtown Scottsdale over the next 5 years.

“The city is focusing on creating strong mixed-use activities combining commercial and residential,” says David Roderique, economic vitality general manager for the city of Scottsdale. “Key business targets include high-wage/high-value employees in biotech, advanced business services, corporate headquarters and technology-based R&D.”

Scottsdale Waterfront is one of the largest mixed-use developments going up in the city. Situated on 11 acres just north of downtown at Scottsdale and Camelback roads, the $250 million project consists of 1.1 million square feet of retail, office and multifamily space. Phase I, which comprises retail and office space as well as a subterranean parking structure, is currently underway and will open in late 2005. Phase II includes 366 condominiums.

The $300 million Arizona State University Scottsdale Center for New Technology & Innovation is set to break ground in late 2005. The 1.2 million-square-foot research complex, located at the southeast corner of Scottsdale and McDowell roads, mainly consists of research and office space, but will include 130,000 square feet of retail and service space.

Westroc Hotels & Resorts is undertaking the $70 million renovation and expansion of the historic 1950s Hotel Valley Ho, located at the southeast corner of 68th Street and Indian School Road. Renovation plans call for 194 rooms and 36 residential units in the 7-story tower, and a new ballroom, urban spa and diner. The hotel is set to reopen in late 2005.

Optima Camelview, a $200 million residential project, is planned for the northwest corner of Scottsdale Road and Highland. The 750-unit project is set to open mid-2006.

The city of Scottsdale markets itself through its regional economic development agency, the Greater Phoenix Economic Council (GPEC), and through direct contacts with desired companies. “The city rarely offers incentives, but rather focuses on creating a high-quality community with significant amenities,” adds Roderique.

The high-quality image and top-notch city services and infrastructure are some of the advantages to developing in Scottsdale. “Over the next few years, Scottsdale will continue to focus on targeted employment, attract significant revenue generators (primarily regional retail), support the tourism industry and improve the local quality of life,” Roderique says.

Pueblo, Colorado

Located approximately 40 miles south of Colorado Springs, the city of Pueblo, Colorado, is a community of 106,000 that has undergone several public improvement projects over the past decade that are attracting developers and spurring new revitalization projects.

“Over the past 10 years the city has made significant investments in both infrastructure and amenities in downtown Pueblo, including three museums, an art center, library, convention center and Riverwalk,” says James Munch, assistant city manager for community development for the city of Pueblo. “The city is looking for developers who are interested in capitalizing on these public investments.”

Marc A. Kahan and Orix Real Estate Equity, both based in the Chicago area, are partnering to develop Pueblo Crossing, an 80-acre retail power center located on the city’s north side. The 88,000-square-foot first phase is complete, and the 120,000-square-foot Phase II will be complete this summer. The third and fourth phases, totaling 270,000 square feet, are also planned.

The 1976 vintage Pueblo Mall, located at the southeast corner of Interstate 25 and U.S. Hwy. 50, is undergoing a major facelift that will be completed in fall 2005. The new mall owners are Renaissance Partners LLC and management company Urban Retail Properties, both from the Chicago-area.

Plans for the third phase of the Historic Arkansas Riverwalk of Pueblo (HARP) expansion are being made with a groundbreaking scheduled within the next 12 months. Centrally located in downtown Pueblo, the project’s defining feature is a navigable river channel a third of a mile long. The project has created a number of private sector development sites of which five are still available and are actively being marketed by the HARP Authority. The Urban Renewal Authority is also developing plans for the expansion of the Public Convention Center, which will adjoin the Riverwalk and result in the creation of additional private sector development sites. Both the HARP Authority and the Urban Renewal Authority are working with private sector residential and commercial developers to develop the land adjacent to the HARP project within the Union Avenue Historic District and within the Urban Renewal Project area.

“The Historic Arkansas Riverwalk of Pueblo Authority and the Urban Renewal Authority of Pueblo are actively marketing the development of the Riverwalk and the redevelopment of Downtown and the Union Avenue Historic District,” says Munch. “They are working to attract both residential and commercial developers to the area.”

“Economic development within the community of Pueblo is a two-pronged strategy,” Munch says. “Economic development arising through the creation of primary jobs is the responsibility of the Pueblo Economic Development Corporation.” The city has an economic development fund, which is created through the assessment of a ? cent sales tax that is used to attract primary jobs to the community. 

Commercial real estate economic development within the community is the responsibility of the private sector with assistance from the city. To facilitate this development the city has used various tools including the creation of Business Improvement Districts (BID) and Public Improvement Fee (PIF). These two entities have numerous tools available to attract new development including public owned development sites, new market tax credits, tax increment financing, and enterprise zone credits.

Stockton, California

Currently the 12th largest city in California, the city of Stockton is situated along the San Joaquin Delta waterway, which connects the San Francisco Bay and the Sacramento and San Joaquin rivers. The city’s approximately 275,000 residents are fueling the need for more retail developments and entertainment venues, along with a revitalization of its downtown. Also, Stockton’s central location in the heart of California has primed it for attracting manufacturing developers.

“We are proactively seeking out experienced developers to build our major retail centers,” says Greg Folsom, program manager for the city of Stockton.

Phoenix-based Kitchell Development Co. is developing Park West Place, a 750,000-square-foot retail power center in the northwest section of Stockton right off Interstate 5 and Eight Mile Road. Major tenants of the project, which is set for a spring 2006 completion, include Target, Kohl’s, Lowe’s Home Improvement Warehouse, SportMart, Borders Books & Music and Bed Bath & Beyond. A Wal-Mart Supercenter and Sam’s Club have also been approved for development across the street for an additional 260,000 square feet of retail.

Sacramento, California-based Regent Development Co. is underway on Downtown Ballpark, a 5,000-seat baseball stadium being constructed for the Stockton Ports single-A baseball team. Located on the downtown Stockton Waterfront, the stadium will open in time for the 2005 spring baseball season.

Located adjacent to Downtown Ballpark, Regent Development Co. is also building the 10,000-square-foot multi-purpose Downtown Arena. Scheduled to open in fall 2005, the arena will house a new arena football league franchise, an indoor major league soccer team and a minor league ice hockey team.

“From a retail point of view, one of the major advantages to developing in Stockton is that historically we have been underserved with retail opportunities,” according to Folsom. “With the recent increases in population from Bay-Area transplants over the last few years, our overall disposable income demographic has skyrocketed and retailers are noticing.”

Aside from retail, Stockton is also working hard to attract manufacturing to the area. “For many years, Stockton has been a natural distribution location due to our transportation facilities (two highways, a port, an airport, and a network of railroads) and central location in the heart of California,” says Folsom. “Recently, we have also started to become a hub for building material manufacturers who are capitalizing on the incredible building boom going on in the Central Valley.”

The city also offers a State Enterprise Zone program, which allows businesses that locate within the Enterprise Zone to qualify for substantial state income tax credits. Major manufacturers such as Golden State Lumber, Simpson Strong-Tie and Eagle Roof Tile have recently moved to Stockton.

Stockton’s underserved population and central location will continue to be key factors in attracting retail and manufacturing developers to the area. With the city’s consumer-oriented and pro-business approaches, Stockton will be both a desirable place to live and locate a business.

©2005 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.