Quick: what’s the first city that comes to mind when you hear “California?” Is it Los Angeles? San Francisco? San Diego? Maybe so, but you’re starting to hear more and more buzz about some of California’s smaller suburban cities whose population growth — and subsequent retail growth — are multiplying at break-neck speeds. Following is a snapshot of several cities’ retail activity.

City of Chino Hills

The city of Chino Hills, located in San Bernardino County, continues to develop residential space city-wide, in an effort to accommodate its rapidly growing population. And, of course, people need places to shop. According to Jeffrey W. Collier, the city’s community development director, several retail projects are underway to fill that void.

Gateway Village, which consists of two freestanding restaurant pads, two freestanding retail buildings, a Chevron gas station and two other major tenants, has completed final grading. The project’s first major tenant, Henry’s Marketplace, is well underway. The walls are up, and an adjacent building should break ground soon. Grading and building plans for a new Chick-fil-A restaurant — an Atlanta-based chain eager to expand into California — have been submitted for review by city staff.

In the preliminary planning stages is Chino Hills Town Center, which would be developed by Opus West Corporation. Concept plans for the site have already been submitted and a potential major tenant, Robinson’s-May, has provided input into the design of the center.

A proposal by Albertsons is also on the table for a new Sav-On drug store with a drive-through pharmacy and a multi-tenant, 8,000-square-foot retail building on the northwest corner of Chino Hills Parkway and Peyton Drive. Canyon Corral would be demolished to make way for the new Sav-On.

City of Clovis

According to Mike Dozier with the city of Clovis, two areas of heavy commercial development currently stand out in Clovis, located just outside Fresno. One is the intersection of Clovis and Herndon avenues, where development proposals are currently in the pipeline for three out of the four corners of this major junction, which also includes the Highway 168 interchange. The southeast corner is already developed with a Save Mart- and a Long’s Drugs-anchored neighborhood shopping center.

A 550,000-square-foot Wal-Mart Supercenter-anchored center was approved in March to set up shop on the northeast corner of Clovis and Herndon. It is expected to break ground within the next 6 months. The developer, Paynter Realty Investments, finished purchasing the 38-acre site from the Clovis Community Development Agency in March.

On the southwest corner, a 40-acre mixed-use development is planned. It will include 350,000 square feet of office space and 70,000 square feet of retail space, as well as restaurant and hotel uses. “The Clovis Community Development Agency is in contract with Sierra Crest Equities of Granite Bay, California, to develop 10 acres of the site,” Dozier says. Sierra Crest is also in contract with a private party to develop 17 additional acres in Phase II of the project.

Sierra Crest Equities is also under contract with the Clovis Community Development Agency to develop the northwest corner, comprised of a 3-acre site wedged between Herndon Avenue, Clovis Avenue and Highway 168. Sierra Crest plans to break ground on a 23,000-square-foot retail complex there within the next 6 months.

The other area of major commercial growth in the city, according to Dozier, is Shaw Avenue. The strong retail corridor will only get stronger from improvements presently underway to revitalize the area, including the updating of some centers, the leveling and scraping of others and the consolidation of some of the many driveways along Shaw to ease traffic congestion. The Sierra Pavilions shopping center near Shaw and Clovis avenues and the Village Square shopping center at Shaw and Villa avenues were recently given facelifts.

The 588,000-square-foot Sierra Vista Mall, already Clovis’ largest retail destination, includes 20 acres for future growth.

Shaw Avenue is bolstered by two key components: the 588,000-square-foot Sierra Vista Mall on the east and the future Save Mart Center, Fresno State University’s new 450,000-square-foot sports arena, on the west. Land Value Management, a local investment group that recently purchased the Sierra Vista Mall, plans to rehabilitate the eastern portion of the mall, as well as bring in a multiplex stadium-style theater. Already Clovis’ largest retail destination, the regional mall site includes 20 acres for future growth. Land Value Management plans to take advantage of that room for growth with a 100,000-square-foot outdoor main street/entertainment development to complement the existing mall, which will be demalled in part to accommodate new pedestrian corridors, lush landscaping, water features and outdoor gathering areas. The project is expected to be completed by spring 2005.

City of Fontana

The city of Fontana’s growth can be attributed to many factors, not the least of which is its choice location in the Inland Empire.

“You could say the old standby, ‘location, location, location,’ and you would be correct.” That’s how a city staff report regarding future retail attraction efforts put it. For Fontana lies in the crossroads of two of the most important roadways in California: interstates 10 and 15. Two major rail lines also travel through the city, while the 210 Freeway connects Fontana to the neighboring affluent Foothills communities.

Another important factor is the city’s affordable housing market. The average cost of a home in Fontana is $190,000 — compared to $285,000 slightly further west. Fontana’s employment increased 15.5 percent in 1 year, according to a 2000 demographic study done by John E. Husing, president of Highland, California-based Economic & Politics Inc. With the pressures of increasing employment, relocation of businesses and low inventories of new housing, the growth momentum in Fontana is expected to lead the Inland Empire for the next 10 years. The retail growth is getting ready for it.

Kohl’s anchors Lewis Retail Centers’ new Summit Heights Gateway center, which will fully open this fall in Fontana.

Along Interstate 15 and Summit Avenue, Lewis Retail Centers’ Summit Heights Gateway is nearing completion. The Kohl’s-anchored center — the balance of which opens this fall — will span 200,000 square feet. Directly opposite the Summit Heights Gateway site, Regency plans to develop a 46-acre parcel into a power center anchored by Target and Lowe’s. Lowe’s already has broken ground on its new store.

Lewis Retail Centers is also underway on Sierra Lakes Marketplace, a 330,000-square-foot power center opening spring 2004, as well as Sierra Lakes Village, a 110,000-square-foot neighborhood center opening spring 2005. Both are part of North Fontana’s Sierra Lakes community, a master-planned development with 2,000 homes, a golf course and almost 1 mile of freeway frontage.

Downtown, near Kaiser Permanente Medical Group’s corporate headquarters and original hospital site, a developer plans to breathe new life into a once-coveted retail area by assembling an outdated shopping center, some marginal retail sites and some vacant property to create a mixed-use project that will lure national retailers and new residents. Another downtown revitalization attempt is being made by converting the city’s outdated performing arts theater into a dinner theater-style venue that would house plays, concerts, award banquets, conferences, film festivals and more.

City of Palm Springs

Everyone knows mixed-use projects with entertainment components are the trendiest thing since, well, lifestyle centers. They’re arguably the next big thing in retail development — and Palm Springs has had it all along. The city is predisposed to do what today’s developers like to do with older downtowns: anchor them with non-traditional retail anchors, with an entertainment base.

“We have a historic downtown village, and with all that’s going on nationally — people rediscovering mixed-use development — sometimes it’s a little bit amusing to watch,” says Jerry Ogburn, director of downtown development for the city of Palm Springs. “Now the big buzz is arts and entertainment. Well, we’ve been doing arts and entertainment for 10 years. That’s what downtown Palm Springs is. Our anchors are the Desert Museum, the Spa Casino Resort, the theater and the convention center.”

Palm Springs is not averse to taking what’s already there, however ahead of the curve it is, and making it better. For example, Signature Theaters plans to renovate the existing downtown theater complex into a multiplex stadium-seat cinema. Major pedestrian walkways will then link the new theaters to the casino, the convention center and the rest of downtown. Nearby, the Spa Casino Resort (a development of the Agua Caliente Tribal Council) is slated for an early November 2003 opening. A few blocks away, the convention center is expanding. Together, the casino and the convention center are expected to drive a lot of new retail growth in the area.

“We are starting on a Phase I renovation of the Desert Fashion Plaza, which has been sort of our ‘problem’ in downtown for a long time,” Ogburn says. The center was formerly owned by the DeBartolo Corporation and has since gone through three more owners. Now, local developer John Wessman of Wessman Development Company plans to turn the practically defunct mall into a lifestyle entertainment center anchored by a theater and a bookstore. The renovations, which will include storefront upgrades and re-tenanting with major national retailers, should be completed by early November. California Pizza Kitchen and Hamburger Hamlet will remain at their current locations on Paul Canyon Drive. Wessman’s later plan, Ogburn says, is to develop high-end residential condominiums adjoining the center.

Downtown residential growth is a large part of the city’s plan. “It’s something we’ve been trying to get done for the last 10 or 12 years,” Ogburn says. “We’re quite excited about it.” The new residential projects going up will likely target snow birds and will consist of second-floor units over art galleries, cafés and retail boutiques.

John Raymond, director of community and economic development with the city of Palm Springs, says the housing market is hot in Palm Springs right now. “We’re really starting to see residential infill all over the city,” he says. “Residential developers are looking for almost any development — because as soon as they put the sign up that it’s for sale, it sells. You can build anything anywhere in Palm Springs.”

Since the city already boasts an arts/entertainment tenant mix, with non-traditional retail anchors, developers are seeking downtown residential so they can appeal to an audience in the San Francisco Bay Area, Los Angeles and San Diego. “You can come to Palm Springs and live in a variety of housing types right downtown,” Ogburn says. “We’re very pedestrian-friendly. You never have to drive your car.”

“What really has spurred this is outdoor dining,” Ogburn continues. Not long ago, the city went through a process of offering incentives, such as reduced parking fees, to restaurants that would incorporate outdoor dining. “We have these great little restaurants and wide sidewalks and courtyards, and it was a way we could spur revitalization without the city actually spending its dollars. And it was a rent-free way for the restaurants to add 25 to 30 percent more tables. Those are the tables that are most popular here. Having outdoor dining is like having an extra sign.” The city also has encouraged its restaurants to offer live entertainment.

Tourism dollars — much of them from international travelers — have always made up a large piece of the Palm Springs pie. After September 11, 2001, however, tourism plummeted nationwide. No city emerged completely unscathed, but Palm Springs came close.

“We dodged a lot of that because our tourism division immediately targeted the drive-in market,” he says. “Sixteen and a half million people live within 2 and a half hours of Palm Springs. It’s a good demographic that will come in for shorter periods of time but more often.”

Though the spending patterns of nearby day trippers are quite different (“They don’t buy the really high-ticket items like the international traveler will,” Ogburn says), many retailers have shifted their focus to a broader price point, and it has worked.

“The average ticket price is down, but the gross sales are up,” Ogburn notes. “They just have to make more transactions to make their bottom line.”

City of Rancho Cucamonga

The 1.3 million-square-foot Victoria Gardens is being developed by Forest City Enterprises and Lewis Retail Centers in Rancho Cucamonga, in the heart of the Inland Empire.

The big story in Rancho Cucamonga is still Victoria Gardens, a 1.3 million-square-foot regional open-air lifestyle/ entertainment center being developed by Cleveland-based Forest City Enterprises and Upland, California-based Lewis Investment Company in the heart of the Inland Empire. A fifth anchor, to be announced soon, will round out the strong anchor roster, which includes Macy’s, Robinson’s-May, the Rancho Cucamonga Cultural Center and Library and the most recent addition, AMC Theatres.

Victoria Gardens is located on a 147-acre site at the northwest corner of Interstate 15 and Foothill Boulevard, set against the scenic backdrop of the San Bernardino Mountains. The project is racing along, says Randall Lewis, a principal and executive vice president of Lewis Retail Centers. His company, which boasts more projects in Rancho Cucamonga than anyone else (over 2 million square feet of retail space, 2,500 apartment units and 3,500 homes), was involved in the acquisition and design stages of Victoria Gardens. It also is in charge of an adjoining residential component, which recently broke ground.

Victoria Gardens is expected to generate more than $5 million in new retail sales tax, property tax and business license taxes annually for the city of Rancho Cucamonga. According to Jack Lam, city manager, such revenues will help fund municipal services like police, fire and recreational programs — which are now all in higher demand due to the city’s surging population growth. Approximately 3,000 new jobs also will be created.

Directly opposite the Victoria Gardens mall, the Los Angeles office of O&S Holdings is underway on Foothill Crossing, a 300,000-square-foot retail center expected to open in summer 2004. According to Austin Bettar, director of leasing, negotiations are currently underway with a 180,000-square-foot department store and two 25,000-square-foot national retailers, in addition to numerous restaurant and retail pad users.

City of Riverside

The city of Riverside, located just east of Los Angeles, is a rapidly growing city of more than 275,000, ranking as the 11th largest city in California. It also boasts the Inland Empire’s largest number of businesses and total jobs, and its public schools are among the Inland Empire’s finest. The city’s retail reputation isn’t too shabby, either.

A restaurant sketch for Canyon Crossings, a new power center underway by Transcan Development and CB Richard Ellis in Riverside.

Located near the Moreno Valley border, at the highly trafficked junction of Interstate 215 and Highway 60, Transcan Development is underway on Canyon Crossings, a new 499,000-square-foot power center that is estimated to generate more than $10 million in annual sales tax revenue for the city of Riverside, plus create more than 750 new jobs. The project has received unanimous approval by both the city’s planning commission and chamber of commerce. The Ontario, California, office of CB Richard Ellis is marketing and leasing the new center, which will be part of the 180-acre Canyon Springs master planned commercial hub. Canyon Springs is already home to Wal-Mart, Sam’s Club, Best Buy and PetsMart — soon to be joined by Target, Linens ‘n Things, Pier 1 Imports, Party City, Michaels Arts & Crafts and Famous Footwear. Canyon Crossings is estimated to open in late 2004.

©2003 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.