FEATURE ARTICLE, MAY 2007

REAL ESTATE’S OWN AMAZING RACE
Economic development professionals in Western cities are scrambling to increase their desirability in order to attract more business.
Brianne Gloski

Western cities from northern Oregon to Southern California are expanding their economic development programs to keep up with changing demographics, land shortages, and the always-altering wants and needs of business professionals and residents. Economic development professionals know they need to remain on their toes if they want their city to thrive.

BEAVERTON, OREGON

An Asian Services Clinic and Senior Housing mixed-use development will be constructed at the corner of Farmington Road and Main Street in Beaverton, Oregon.

Beaverton, with its convergence of several major roadways and rail lines (Highways 217 and 26, Canyon Road, Farmington Road/TV Highway, Tri-Met’s Max Light Rail system and, coming soon, the commuter rail), shows promise to be a lucrative business hub in both the Portland metro area and the entire Pacific Northwest. However, the city of 84,244 (2006 estimate) lacks a supply of developable, vacant industrial-zoned land, according to Rob Pochert, economic development program manager for the city of Beaverton. “Beaverton is challenged in its ability to attract new employment in the traditional economic development model. [The city] cannot compete with our neighbors [like Hillsboro and Gresham] in acquiring new jobs by attempting to play in the regional recruitment game.”

Because of its land restrictions, the city spends a large portion of its time focusing on its existing businesses, and will specifically focus on them through its soon-to-be-initiated Economic Gardening program, which is modeled after the program originated in Littleton, Colorado. This program will focus on Beaverton-based businesses that have been in operation for a period of time, are profitable and have an expansion plan, says Pochert. Objectives include providing strategic business intelligence to businesses to make them more competitive, demonstrating that the community of Beaverton cares and appreciates its businesses, identifying and solving problems, identifying business expansion and employment opportunities, building community capacity to sustain local business growth, and improving the overall business climate. “We believe our existing businesses are our best prospects for future growth,” says Pochert. “The purpose of this program is to help them grow.”

Initially, the economic development programs will concentrate on technology-based businesses, however, any existing business will be eligible for assistance. The city offers multiple assistance programs, such as low cost loans, workforce training programs, workforce recruitment assistance and fast-track permitting. “Oregon is not an incentive-rich environment for business when compared to other states,” says Pochert. However, Pochert doesn’t see this as a hindrance when one looks at what Beaverton has to offer in terms of customer service. “My experience is that if we create a positive environment for business, our ability to attract new business will be easier.” And, the city offers all available state assistance programs to its local businesses.

The City of Beaverton is putting its programs to the test with several developments occurring throughout the city. These developments will create more than 3,900 new jobs and develop more than $350 million in total economic activity. The 5-acre, transit-oriented The Round at Beaverton Central will add retail, office and residential space to Beaverton. With a Max light-rail line bisecting the project, the mixed-use development will feature 64 condominiums, 80,000 square feet of retail space, 450,000 square feet of office space and 900 structured parking spaces in five five-story office/retail buildings, two parking structures and a retail/residential building. California-based Dorn Platz is developing the project.

Another transit-oriented, mixed-use development, The Westgate, has been envisioned, this one located downtown next to The Round at Beaverton Central and the Beaverton Central MAX station. The city purchased a 3.9-acre site in partnership with Metro with the intention of reselling it for its development into a community much like The Round. The city’s vision for the land includes three or more five- to 10-story buildings, with 30,000 square feet of possible retail ground-floor space, 90 residences, 220,000 square feet of office space and structured parking.

Beaverton city officials are also working with a developer to construct the Asian Services Clinic and Senior Housing mixed-use development on a vacant block located at the corner of Farmington Road and Main Street. The project will feature medical, office, retail and residential space, as well as on- and off-site parking for the building’s tenants. Scheduled for a mid- to late-2008 completion, the project is located within the Old Town section of downtown Beaverton and will be designed to provide a solid example for further redevelopment in the area, according to Pochert.

In addition to this redevelopment project, the city adopted the Hall/Watson Beautification Project Implementation Plan, in order to create a more attractive transportation corridor in downtown Beaverton. “The project targets the north-south street couplet of Hall Boulevard and Watson Avenue between the Round and the library and recommends a series of key design elements which will help create a more attractive and safer pedestrian environment in downtown Beaverton,” Pochert says. Scheduled to take a number of years to complete, the project will include reconstructing intersections, replacing street lights, planting street trees, constructing small plazas and gathering places, and replacing worn benches, trash cans, drinking fountains, bike racks, and planters.

Redevelopment in the city’s central core is an important focus of Beaverton’s economic development team over the next few years, and the city is implementing several programs to facilitate this development, says Pochert.

HENDERSON, NEVADA

In 2006, the city of Henderson, Nevada, was ranked the 20th “Best Place to Live” in America, according to Money magazine, and the city’s economic development department is taking full advantage of this ranking. With a metropolitan area population quickly approaching 2 million and 5,000 more residents being added to this base every month, Henderson, with a population of 262,112 (January 1, 2007 estimate), is in need of a strong economic development plan to complement this growth.

According to Bob Cooper, economic development manager for Henderson, the city’s economic development strategy and approach centers around three focal points: business recruitment, local business expansion and retention, and local business start-ups. Henderson offers one of the lowest tax systems in the nation and features no state corporate income and personal income tax. Compared to California, workers’ compensation rates in Henderson are as much as 60 percent lower than those found in the booming state to the west. These factors, combined with the city’s quality of life, attractive residential options, strong sense of community, available workforce and lower costs of doing business, make Henderson an economic and business stalwart in Nevada, says Cooper. “Our outlook remains strong as businesses seek out our attractive corporate climate, fast-growing workforce and commercial real estate market opportunities…The city has positioned itself as ‘The Las Vegas Valley address for business success.’”

The city’s business success is a reflection of all the new development occurring around Henderson. America Nevada is currently developing two projects: Corporate Center South and The District at Green Valley Ranch. The 90-acre, master-planned Corporate Center South office park is located on Paseo Verde Parkway, adjacent to Interstate 215 and St. Rose Parkway/Pecos Road. Nine of the buildings, totaling 553,900 square feet, are occupied, with Ford Credit residing in 110,000 square feet of that space. The District at Green Valley Ranch features 40 retail stores, a three-story Class A office building and 88 residential units. Phase II of the $80 million, 400,000-square-foot development was recently expanded, providing an additional 104,500 square feet of lifestyle retail space and 51,300 square feet of office-over-retail space. Tenants of the expansion include Whole Foods Market, The Cheesecake Factory and West Elm.

Over in West Henderson, a 6,900-acre master-planned community is in the works. Once completed, this behemoth will feature 24,000 homes, 2,200 acres of commercial and light industrial space, and 1,500 acres of schools, parks and other public uses.

Significant development is also occurring around and at the Henderson Executive Airport, including the completion of $30 million in improvements, such as the construction of a new terminal and two new runways. Henderson Quail Commercial Aviation Center will add 125,000 square feet of hangar and office space to the airport, and the Henderson Quail Air Center will offer hangar space for sale or lease.

Plise Companies is developing an upscale urban lifestyle center in the foothills of Black Mountain near Henderson Executive Airport. The pedestrian-friendly, 126-acre City Crossing development will offer 400,000 square feet of boutique shopping, 150,000 square feet of dining and entertainment space, 1 million square feet of Class A office space, open space and 2,500 luxury residences. Phase I is scheduled for a 2009 completion.

Despite all this new development going on, Henderson is still looking to attract more business, particularly in the medical services and biomedical industries and the regional office, business and financial services market.

According to Cooper, the city is already a premier medical region, serving as the home for several world-class facilities including the Medical Education & Research Institute of Nevada, the Nevada Cancer Institute, the Lou Ruvo Brain Institute, Touro University and the University of Southern Nevada.

Both the Eastern and St. Rose Parkway “Mediplex-area” and the Stephanie and Interstate 215 areas are seeing major medical growth. In the “Mediplex-area,” nearly 1.1 million square feet of medical/business office space has been completed, and an additional 500,000 square feet of office space is expected in the next 2 years. In the Stephanie area, HCA has acquired a site for a new proposed hospital campus, and more than 100,000 square feet of medical office space is currently under construction, completed or in the works.

Henderson’s strong labor pool (the area’s in-migration ranges from 5,000 to 8,000 residents per month), professional image, strong demographics, telecommunications infrastructure and excellent operating environment also make the area a strong candidate for business relocation and expansion, according to Cooper. Home to 14 colleges and universities, the city has emerged as a hub for higher education providers, “providing residents and businesses increased access to higher education and workforce development opportunities,” Cooper says.

TEMECULA, CALIFORNIA

A new civic center has been planned for Temecula, California.

The population is booming in Temecula, California, and economic development professionals in this city of 93,923 (2006) are working overtime to keep up. In 1990, the population was numbering a smaller, but still impressive, 27,099 residents, an increase of almost 350 percent. Aaron Adams, assistant city manager for Temecula, is not surprised. “Temecula’s solid economic base and tourism climate, picturesque landscapes, state-of-the-art city facilities and appealing lifestyle, combined with a spirit of community involvement from its citizens, make Temecula an exceptional place to work, live and visit.”

In 1999, the cities of Temecula, Murrieta, Lake Elsinore and Riverside County partnered to market Southwest California through the Southwest California Economic Alliance. This Alliance was created to stimulate economic development within this region by targeting mid- to large-companies in the high technology, biotechnology and telecommunications industries. As a result of their efforts, the cities hope that more high-paying jobs will be created, thus expanding the region’s tax base, according to Adams. “The Alliance provides marketing services to the member cities and unincorporated county area in an effort to enhance the image of this region and stimulate private investment and job creation to this economy. This business attraction partnership allows Temecula to leverage its funds with other agencies for this regional effort.”

Abbott Laboratories is expanding in Temecula, California.

In addition to these marketing efforts, the city provides numerous programs and services for its businesses to take advantage of, including having no utility use tax — such as electric, telephone, cellular, gas and water — for businesses located in Temecula, a flat-rate registration fee, low water and sewer rates, an industrial development bond program, a fast-track permitting and online plan check process, and a wide variety of business assistance programs. Because of these incentives, Kosmont & Associates ranks Temecula as one of the cities with the lowest cost of doing business, according to Adams.

Businesses will also have the advantage of Temecula’s location along the Interstate 15 and 215 corridors, in close proximity to Los Angeles, Orange and San Diego counties. While stimulating new business is always vital, Temecula’s economic development professionals know that retaining their old business is just as important, if not more so. Once a month, city staff, EDC/Chamber members and volunteers contact two to four local business by phone or personal visits to discuss business issues and other needs.

Increasing business retention is one of the city’s goals in the next few years, as are attracting new industries (biomedical/biotech, electronics, retail, and health technology/manufacturing to name a few), increasing workforce benefits, and improving opportunities for workforce development through new education, training programs and resources, Adams says.

The ongoing expansion of Abbott Laboratories is proof that some of Temecula’s business retention programs are working. A 394,715-square-foot, five-story building, a 1,618-space parking garage, a pedestrian walkway over Ynez Road, a 1,161-space parking lot, and an interior courtyard with a bocce ball court and a putting green for employee use are currently under construction. Once completed, the expansion will add hundreds of local jobs to the city.

Professional Hospital Supply, another large Temecula employer, has proposed a 615,450-square-foot expansion, consisting of 76,722 square feet of office space and 538,728 square feet of warehouse/distribution space.

Several new projects are also currently underway within the city borders. In January 2006, the city council approved plans for the 320-bed Temecula Hospital and Medical Center, which will feature five- and six-story towers, two medical office buildings, a cancer treatment center and a fitness center.

A new civic center for the community is also currently under design. The project’s three major components will be developed in stages on a 6.75-gross-acre site at the corner of Mercedes and Main streets. Phase I will consist of a 480-car, multiple-level parking structure with 12,000 square feet of ground-level office space; a town square; and street improvements along Main and Mercedes streets. Phase II will consist of a 93,500-square-foot civic center adjacent to the Phase I parking structure. The city will also partner in the development of a 52,000-square-foot retail/office space on both sides of the town square, according to Adams.

Temecula’s retail sector is also showing strong signs of growth. “Revenue from sales tax has continued to rise strongly in Temecula due to new retailers joining the area and the on-going expansion’s of the city’s auto mall and regional mall,” Adams says. Forest City Enterprises will complete the expansion of the 1 million-square-foot Promenade Mall in Temecula, located at 40820 Winchester Rd. An upscale outdoor wing on the east side of the mall will be constructed to reflect a lifestyle center. The Planning Commission approved the 126,000-square-foot expansion in February, and work is scheduled to begin this month. Completion is slated for April 2009.


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