In the November 2012 issue of Site Selection magazine, editor Ron Starner profiled San Bernardino County’s High Desert cities citing: The High Desert region of San Bernardino County is proving to be an oasis of business opportunity for companies seeking to expand their manufacturing and distribution operations in Southern California. Read more, including interviews with Dr Pepper Snapple and Wal-Mart, here http://www.siteselection.com/issues/2012/nov/san-bernardino-county-california-ip.cfm.
SAN BERNARDINO, CA-San Bernardino Association of Governments, a.k.a. SANBAG, will spend $734 million this year upgrading roads, highways, bridges and mass-transit bus and rail service throughout the County of San Bernardino. The investment underscores the leadership of the County to bring that money to bear on the issues facing the region and to ensure the County remains a destination of choice for major corporations and investors. GlobeSt.com recently spoke with Dr. Raymond Wolfe of SANBAG about the projects the agency will be working on and how companies can benefit by being located in the County.
GlobeSt.com: How has SANBAG influenced growth in the County?
Wolfe: SANBAG plays a number of roles in economic development as the County’s transportation commission and authority. SANBAG was originally commissioned in 1973 as the Council of Governments. In 1989, the agency morphed into a more transportation-focused organization with the passage of Measure I, the half-cent sales tax dedicated to County transportation
improvements.
Measure I has been responsible for major County projects such as the widening of SR 60, extension of the 210 freeway through San Bernardino and realignment of SR 71, among others. These projects, constructed from the 1990s through the early part of the century, really changed the character of the County’s landscape, provided for more access to the region’s developing lands and allowed for more streamlined goods movement.
GlobeSt.com: How does SANBAG influence goods movement in the County?
Wolfe: The ports of Los Angeles and Long Beach are the most heavily traveled ports in the nation and have been for a decade. Due to the County’s proximity to the ports, freight and goods movement are a huge part of our local economy. Goods movement has helped foster a network of distribution centers—from Ontario to the West Valley. The new Amazon.com distribution center
at AllianceCalifornia, a 2,000-acre, mixed-use development in the city of San Bernardino, is a great example. Amazon.com recently opened a new fulfillment center in a 950,000-square-foot building, bringing hundreds of new jobs to the local economy. That type of expansion is needed; however, the increased truck traffic impacts local streets and arterials. A major portion of SANBAG’s work is to improve interchanges allowing for better movement on and off the freeways and to also support local communities and local improvement projects.
GlobeSt.com: Please share some of SANBAG’s top projects.
Wolfe: I-15/I-215/Devore Junction: Trucks and trains move significant volumes of freight along the I-15 corridor, through the Cajon Pass and the Devore Junction, where the I-15 and I-215 freeways meet. The improvement project undertaken by SANBAG in coordination with the California Department of Transportation is focused on adding new lanes, realigning the freeway-to-freeway junction, adding truck by-pass lanes, improving bridges, reconnecting Route 66 and addressing other environmental needs. Only 21% of the $324-million total cost is federally funded. The remaining 79% of the funding is derived from Measure I local sales tax (20.4%), state funding (56.5%) and private funding (2.1%).
Passenger Rail Service: SANBAG is working to expand transit options in San Bernardino and Redlands. During the last several years, SANBAG has been studying the feasibility of utilizing the Redlands Subdivision, a 9-mile railroad corridor extending between Downtown San Bernardino and the University of Redlands, to introduce passenger rail service to this area.
Regional HOV Lanes: We are also working to create an accessible HOV (high occupancy vehicle) network throughout Southern California by working with our neighboring agencies such as Southern California Association of Governments (SCAG), the Riverside Transportation Authority, Orange County Transit Authority and Los Angeles Metropolitan Transportation Authority.
We’re even dedicating more money to transit-oriented developments with a number of projects now moving through design and environmental requirements. While these projects will take a number of years to complete, they demonstrate a commitment not only to a strong freight and goods movement industry, but also looking at alternate modes of transportation to enhance overall quality of life.
GlobeSt.com: How does your work support economic development?
Wolfe: Obviously all of these transportation improvements are of interest to manufacturers and any companies that need to transport raw materials through the supply chain and deliver finished goods to market. SANBAG is focused on making the County an attractive place to relocate or establish a new business, for all industries. We are lucky to be a self-help county in
California, where we have the ability to leverage local sales tax to affect many of these important advantages. This is not the case in many counties that have to rely on federal and state dollars.
GlobeSt.com: What are the benefits to companies locating in the County?
Wolfe: The County of San Bernardino established a Countywide Vision Statement, and transportation is one of the nine elements. These elements, that include water, healthcare, education, among others, are central to improving our County and improving our competitiveness and quality of life. We have great leadership that isn’t just focused on being business-friendly,
but is also trying to solve the basic problem of transportation. That can be a basic hurdle toward a successful business climate. SANBAG is committed to helping to implement this Countywide Vision so that we don’t just have a document on paper that collects dust, but we address issues from every angle to make this a destination of choice.
Another great thing we bring to the table is that our average resident age, 31 years, is lower than most neighboring counties. We
have a robust workforce that will be available for years to come.
By Inland Valley Daily Bulletin’s Liset Marquez
Move over Seattle, the best coffeehouse can be found in Southern California.
Klatch Coffee, headquartered in Upland, recently beat out some of the top brew bars for the distinction as “Best Coffeehouse”
in the nation.
To celebrate the win and National Coffee Day, which is today, Klatch customers can stop by any one of its coffeehouses – in Ontario, Rancho Cucamonga and San Dimas as well as a roastery in Upland – for special discounts on their cup of Joe.
“What better way than to celebrate at America’s best coffeehouse,” said Mike Perry, Klatch’s owner and CEO. “It’s to thank
and reward them for their support. It’s also to encourage them to feel free to experience the coffee they might not regularly.”
Klatch came out on top of last week’s annual Coffee Fest, a trade show in Seattle that caters to the specialty coffee and gourmet tea industries.
As winner of the inaugural DaVinci Gourmet America’s Best Coffeehouse Competition, the company earned a trophy and $2,500.
Of the top eight finalists, three were from the Los Angeles region.
“L.A. was represented well,” Perry said. “People often think of the northwest as having the best coffeehouse. The winner was from California and that was really nice to see.”
Perry said their team – made up of his daughters Holly and Heather Perry, and Jenette Green – made the difference.
But the competition began long before the Klatch Coffee team arrived in Seattle.
Perry said having the distinction as the best coffeehouse in the nation is also an indication of the work by his staff who are constantly going through training and learning how to be better baristas.
Secret shopper
Klatch learned a couple of months ago they were nominated for the competition, which included coffee locations throughout the U.S.
Organizers then vetted that list to come up with 20 coffeehouses, including Klatch.
Perry said they were asked to submit a video about their operations.
At the same time, unbeknownst to them, a secret shopper was sent in to evaluate their competition.
Passing that round with flying colors – Perry says they got 100 percent – they advanced to the public portion of the competition.
From the online voting, Klatch emerged as one of the eight semifinalists.
When it finally came time to compete in Seattle, Heather and Holly Perry and Green had to operate a pop-up coffeehouse in front of 30 judges.
They were given 30 minutes and critiqued in everything from how they set up the coffee shop, served coffee and then cleaned up.
What made Klatch stand out from the rest of the competition?
“We went up with a cold drink, I think that blew (the judges) away. The naked Verbana uses lemon peel, verbana leaves and a shot of espresso. She mixes it in an ice shaker and pours it out,” Mike Perry said.
Heather Perry has been known for her specially drinks. She captured first place at the U.S. Barista Championship in 2003 and 2007.
Mike Perry adds, “We also brought coffee from Panama, the Esmeralda Leon Geisha and an Ethiopian which is fruity and has a
unique flavor.”
Perry prides himself on traveling to different countries such as Costa Rica, El Salvador and Panama and tasting for himself what he will be bringing back to his roasting company.
Shop’s buzzing
On Friday afternoon, the Rancho Cucamonga location was still buzzing with the news that the coffee shop was victorious.
Sitting at the bar reading his paper was Willie Decastro. The Rancho Cucamonga native was later joined by his wife, Dulce, where they shared a cup of the “brew of the day.”
The Descastros, who consider themselves coffee aficionados, often go to other locations in Los Angeles such as Intelliensa and
La Mil.
“They deserve it,” says Dulce, as she sipped her coffee. “In the Los Angeles area this our favorite choice. It’s nice
and homey.”
“We’re purists,” Willie chimes in.
Dulce said they don’t need creamers or sugar because the coffee is a really good quality.
The couple say staffers at Klatch are very accommodating and often share their drink recommendations if they don’t have something they like.
“They really know their coffee. We get our education from them, and they love to talk about coffee,” Dulce said.
It’s the welcoming environment that has kept the couple coming back since they first began in 2005.
Meghan Schauer, a barista at the Rancho Cucamonga location, said it’s what they pride themselves on.
“We want to create the friendly environment. This is their shop, too. Everyone is pretty much family,” she said.
And as customers trickled in on Friday afternoon, Schauer and the other baristas working at the bar not only greeted them by name but many times knew their drink order without having to be told.
As staff prepares for today’s specials, don’t expect things to slow down for Mike Perry or Klatch.
Perry is in the midst of opening up an 1,800-square-foot coffee spot in Terminal 7 of Los Angeles International Airport.
The facility has been under construction for about a month.
An opening date has not been finalized, but Perry said it could be operational by early November and, when it does, it will nearly double all of Klatch’s staff.
The LAX location alone will employ 50 people, he said.
“It exposes our brand to the rest of the world,” Perry said.
By Ian Ritter
The Macerich Co. embraces the desert. San Bernardino County‘s High Desert is home to the REIT’s Mall of Victor Valley, in Victorville, CA, which it has owned for eight years. The mall is one of the top retail draws in the area, nearly 100% leased and going through a facelift that includes the addition of a new Macy’s anchor. Though Macerich owns 63 regional shopping centers across the United States totaling 64 million square feet, and is one of the largest mall owners in the country, Skip Kuhn, the firm’s vice president of development, took some time to tell us about what makes this particular asset a standout in the portfolio.
GlobeSt.com: Tell us about your retail assets in the High Desert.
Skip Kuhn: Macerich has owned and managed The Mall of Victor Valley for over eight years. This regional center, today with three major anchors (Sears, JCPenney and Cinemark Theatre) and a new one – Macy’s – arriving next year, is a highly successful property. Across our portfolio, our key properties are always evolving to meet the changing needs of retailers and consumers. Here at Victor Valley, we are renovating all four of the property’s major entrances; we recently completed renovations at the soon-to-open Penney; and we are working toward the opening of our new, full-line Macy’s department store in spring 2013.
In addition to The Mall of Victor Valley, Macerich owns a number of other shopping centers in California, and Santa Monica is home to our corporate headquarters. Inland Center is an estimated 35 miles away and offers Coach, The Disney Store, Macy’s, Sears, Vans and Zales.
GlobeSt.com: What has been the latest news at Victor Valley?
Kuhn: In early October, Penney will officially open its 93,000 square foot, single story, full line department store. The new store will feature recognized brands such as Sephora, Liz Claiborne, I Heart Ronson, Bisou Bisou and Levi’s. The expanded store is opening in the former Forever 21 location and will be approximately twice the size of the current jcpenney.
In spring 2013, Macy’s will open its doors to a brand new 103,000-square-foot department store. The store will feature Macy’s
well-regarded set of national and locally edited merchandise.The center’s Cinemark Theatre recently completed a renovation of its own. The theater boasts the largest HD Theater in the High Desert and offers wall-to-wall and floor-to-ceiling screens.
The center is also in the midst of remodeling all four major entrances. The sleek glass storefronts and travertine stone give
the center a whole new look and feel. Along with new landscaping and additional seating, The Mall of Victor Valley becomes even more inviting. Construction on the four entrances is taking place right now and two of them opened over Labor Day weekend and the other two will be complete just in time to celebrate the opening of the new Penney in October.
GlobeSt.com: What you see as the greatest opportunity at Victor Valley?
Kuhn: The Mall at Victor Valley is the dominant shopping center for this key part of Southern California. The property’s high-profile location on I-15 and Bear Valley Road; its loyal shopper base; and strong working relationships with the City of Victorville contribute to its continuing success. The fact that Macy’s is building a brand new store here is testament to the power of this center and this market, and we look forward to adding even more national brands to our already strong roster of stores.
GlobeSt.com: Why do you think this asset has performed so well, and how were you able to attract Macy’s
to the center?
Kuhn: For many years, Southern California’s High Desert has been a fast-growing market thanks to family-friendly housing prices and good employment opportunities. Since it was built in 1987, our well-situated property has been continually
serving the needs of this market by always evolving to meet the changing preferences of the community. New stores, fresh amenities and modern design elements help keep this property top of mind for Victorville and the region. All of these reasons made our location desirable for a premier national fashion anchor like Macy’s.
GlobeSt.com: What has driven new tenants to move to your center?
Kuhn: The powerful combination of strong demographics and the center’s collection of brands, make The Mall of Victor Valley a natural choice for retailers who want to reach the region’s attractive and ready consumers. Additionally, the effective management team maintains excellent working relationships with the City of Victorville and contributes to a friendly business environment for the retail community. In all, more than 546,000 square feet of shopping space that includes Sears, Penney and soon, Macy’s, meets the needs of this appealing market. This center is also home to in-line stores that include Bath and Body Works, Vans, The Children’s Place, Victoria’s Secret and Barnes & Noble, to name a few.
Our leasing team is always in talks and negotiations to bring new and exciting retail and entertainment to this dynamic
center. The expansion of Penney, the addition of Macy’s and Macerich’s capital investment in the Mall of Victor Valley have spawned a new interest from retailers formerly not in the market. Looking forward, we are excited by current negotiations and look forward to announcing our new merchants in the near future.
GlobeSt.com: What is your perspective of retail in that region?
Kuhn: The Mall of Victor Valley continues to be a powerful draw for High Desert consumers and beyond. The center creates a nexus that enhances the regions retail offerings and we are proud of the center and its recent additions.
Retail and entertainment in the High Desert has always been responsive to the consumers and the Mall at Victor Valley is no exception. The Mall of Victor Valley is committed to family friendly events from the quintessential holiday visit with Santa to an on-going partnership with Circus Vargas. With our new and expanded anchors and the addition of the new-to-market retailers, The Mall of Victor Valley is a stronger retail draw than ever.
In the September/ October 2012 issue of Site Selection magazine, The Best of Both Worlds, written by Ron Starner, features leading companies flourishing in the County of San Bernardino.
Gregg Fresonke has seen firsthand the difference that a San Bernardino County location can have on a Southern California-based business.
“After almost two years, our decision to relocate from Los Angeles to Rancho Cucamonga is reinforced every day,” says Fresonke, vice president of marketing and sales for Hollywood Ribbon Industries, the largest manufacturer of decorative ribbons and bows in the Western U.S. “Everything has been positive. The move has helped our employees a great deal. The work environment here is much nicer, and our employees are very proud to work here.” Read more here.
Riverside-San Bernardino-Ontario Area Ranks as Top Metro
This spring, Business Roundtable, the national organization of CEOs from major U.S. companies, released “Create, Grow, Sustain,” its own 2012 report on corporate sustainability featuring accounts of company progress from 126 of the
organization’s CEOs. Whether forced to by statute or driven to by strategy, many of them are pursuing sustainability projects that involve California, which for the third year in a row tops Site Selection’s Sustainability Rankings.
Riley Bechtel, chairman and CEO of Bechtel, reported that the Ivanpah Solar Electric Generating System and the California Valley Solar Ranch the company is building in the state will not only produce enough solar power for 240,000 homes, but
are employing more than 1,400 construction workers.
Theodore Craver, Jr., chairman, president and CEO of Edison International, parent company of Southern California Edison (SCe) and Edison Mission Group (eMG) wrote that the company’s new smart-grid system “will be designed to not
only support traditional power generation, but also interconnect with intermittent renewables. We are investing approximately $1 billion a year to upgrade our transmission grid; this will help California meet its 33 percent Renewables Portfolio Standard by 2020. In 2011, SCE delivered 15.54 billion kilowatt hours of renewable electricity to our customers, equal to 21.1 percent
of our power portfolio. In addition, EMG is the sixth-largest wind developer in the country, operating a portfolio of 31 projects with a generating capacity of nearly 2,000 megawatts.”
By the end of 2012, said Craver, the company will have completed the installation of 5 million smart meters. “The $1.6 billion edison SmartConnnect program will provide customers with new tools to better understand and manage their electricity use.” The company’s Plug-in Readiness program, meanwhile, will help customers who choose electric cars prepare their homes for fueling with electricity and informing them about their EV rate plan options.
The list goes on: UPS Chairman and CEO Scott Davis discussed the deployment of alternative-fuel and electric vehicles around the world, including leading sustainable nations such as Brazil, Canada and the U.K., and the Golden State, where UPS is using 100 plug-in EVs and also testing long-haul trucks fueled by liquid natural gas. Greg Swienton, chairman and CEO of Ryder, said his company is pursuing a similar truck deployment in Southern California. And John Watson, chairman and CEO of Chevron, wrote of one innovation that some carbon footprint observers might call a wash: “In California, we are developing and demonstrating solar technology that will produce steam needed for production operations at our Coalinga oil field.”
By Andrew Edwards, The (San Bernardino County) Sun Inland Valley Daily Bulletin
ONTARIO – Hillwood chairman Ross Perot Jr. told an audience of real estate professionals this week that he thinks this is the right time to invest in California. “We believe the bottom of these cycles is the right time to be aggressive,” he said while delivering the keynote address at a National Association of Industrial and Office Properties conference at Ontario Convention Center on Wednesday.
Hillwood is the master developer of Alliance California, the sprawling complex of distribution centers that surrounds San Bernardino International Airport. Perot Jr., who is the son of the 1992 and 1996 presidential candidate, founded Hillwood in 1988. In his speech, Perot Jr. said Hillwood has survived enough real estate cycles for its executives to manage a course through the post-2007 housing bust and the slow recovery that has followed.
Perot largely sidestepped the Texas-versus-California arguments that contrast the Lone Star State’s laissez-faire reputation with the Golden State’s strict regulatory environment. He did say Hillwood is generally optimistic when it comes to business prospects in California, for one reason being the strength of the state’s technology sector.
Hillwood, Perot Jr. said, is pursuing residential projects in coastal markets like San Jose but would not pursue the same kind of investments in San Bernardino County. “Would I put a lot of housing out in the Inland Empire?” Perot Jr. asked. “I wouldn’t. If you can see the water, I would.”
Perot Jr. also said he expects the ports of Los Angeles and Long Beach – key to his firm’s investments in distribution centers – to remain competitive after widening of the Panama Canal is completed. The Panama Canal project, set for 2014 competition, would allow for larger vessels to pass through the canal and conceivably allow for exporters to send goods to Texas or
East Coast ports instead of Southern California destinations.
“Hopefully, it will give completion to your ports, and your ports will become more competitive and more efficient,” he said. “California will continue to dominate (shipping).”
Alliance California is the site of the recently announce Amazon fulfillment center, which may employ more than 1,000 people after its expected opening this fall. The Texas-based Hillwood’s projects include InterChange Business Center in San Bernardino, Hofer Ranch in Ontario and the proposed Renaissance Rialto.
The Rialto project involves redeveloping Rialto Municipal Airport in cooperation with the Upland-based Lewis Group of Cos.
RECon 2012 LAS VEGAS-Scott Kaplan, senior vice president at CBRE, talks about how the San Bernardino County retail market has bounced back. He spoke with GlobeSt.com’s Ian Ritter at the RECon show here.
They also discussed:
Watch video here: http://www.globest.com/videos/event_coverage/west/san-bernardino-retail-market-321863.html
SAN BERNARDINO, CA-Few markets were harder hit by the Great Recession than the one-time boom towns of Southern California and the Southwest. Sandwiched between the two, San Bernardino County (booth CW149 at RECon) saw its own struggles.But now the region, particularly in and around San Bernardino County, is staging a comeback, with rising rents and even the glimmers of new construction. Scott Kaplan, senior vice president of CBRE, spoke with GlobeSt.com about the retail resurgence of San Bernardino County, the Inland Empire and the continuing challenges facing retail nationwide.
GlobeSt.com: How is the recovery going in the Inland Empire?
Kaplan: We are seeing an increase in retail sales in most of the markets of the Inland Empire region, in all sectors. Discount, power centers, community centers, even luxury is on the mend. We look at the bellwether projects for our market, the Mall of Victor Valley, the Shops at Chino Hills, Victoria Gardens, etc., and we’re hearing that the revenue numbers for most of them are up 5% to 10% over a year ago.
GlobeSt.com: Are some cities bouncing back more than others?
Kaplan: Yes. We’re following common post-recession recovery patterns. They typically run coastal and urban, then inland. Last year we felt it in the markets touching the coastal markets. Chino Hills would be in recovery a year ago. Ontario would have been a market recovering a year ago. Now, the recovery rings have expanded to more markets, including the high desert region, Victor Valley, etc. If there were three recovery regions last year in our market, there may be seven or eight this year that are stronger.
GlobeSt.com: Is this affected by the status of Los Angeles or Long Beach?
Kaplan: I don’t know that we’re related to those economies. In general, what happens in retail is that retailers feel more
comfortable expanding where there is dense population and where New York says capital should be. The biggest difference between a year ago and today [is that Las] Vegas, Phoenix, and the Inland Empire were all “Red X’ed” in the capital
markets until, probably, this year. We’ve seen that turn on like a spigot, which has been very helpful to stimulating our local economy. Capital, of course, is the oxygen of everything we do in all the product types.
GlobeSt.com: What retailers are expanding besides the Macy’s to coming the Mall of Victor Valley?
Kaplan: Neiman Marcus Last Call at Ontario Mills is an important name. The Mills has been up significantly over the last three years as they’ve added more tenants, and Neiman Marcus is an important name for them and for our market. Macy’s has been slow to do deals across the country. As we understand, they’re only opening three stores next year, and one of them will
be at the [Mall of Victor Valley], which we think is a defining moment for our market.
Charming Charlie is expanding across our market, doing multiple locations. We’re working on a luxury theater deal in Ontario, Cinetopia out of Vancouver, WA. The lifestyle sector has been beaten up across the country, and has weathered the storm. The brands that are still here are the brands that are expanding. It cold be Coach, White House Black Market, Chico’s. Rue 21 did a deal in Apple Valley.
We tend to generalize in our business. We tend to say “This sector is dead, this sector is expanding.” But generalizing is dangerous. It’s really the health of each individual retailer, and many of them are in a managed expansion mode.
JCPenney recruited senior level Apple executives to reshape the JCP brand, and is doubling its size at the Mall at Victor Valley.
They’re reformulating their brand, but the fact that they’re doubling their size in our market is pretty meaningful and a big statement.
Overall, the national benchmark for retail is sales per square foot. Just to pick a number, $400 per square foot in sales performance is thought of as the top 25% of projects in the country. All of our [bellwether] projects, including the [Mall of Victor Valley] are running over that benchmark, and I think that’s meaningful.
GlobeSt.com: Does that mean that this recovery is sustainable?
Kaplan: Nobody knows the answer to that, except that we’ll be able to retroactively look back and see whether what I’m about to say is right or wrong. It’s just the cycles. Last year you started to see pockets and sporadic markets and green shoots. This year, there is clearly a pattern. We track demand, vacancy and, obviously, capital is critical.
We have a lot of developers and architects calling us again. The Architectural[Billings] Index, which measures the workload of the top 100 firms in the country, is at its highest rate for our market since 2006. When a recovery happens, architects are usually the first guys to get the call. Our architects are very busy and hiring back.
We’re seeing land trade again, and prices that were very, very depressed snap back in the retail sector. Last year, they snapped back in the industrial sector, and they’ve snapped back in the multifamily sector in our market. But clearly, there was little to no retail development, and we’ve been working on and have knowledge of many projects that have been restarted and replanned. There will be a runway period from the time we know about those until we see sticks in the ground, but once that gets going, it takes another three to five years to get those projects done and expanded. Really, it’s about retail demand and what retailers are telling Wall Street. It’s about their expansion plans.
One thing we haven’t had snap back is our housing and unemployment. We’re not tracking as well as the rest of the country, but
unemployment is improving over a year ago, and you can’t imagine the number of builders who are building apartments. When it’s this heated, it usually signifies that we’re at the end of the multifamily cycle or that we’re peaking. We’re starting to hear single-family residential developers buying residential lots. That’s a very good sign if we can get the single-family market going in the right direction.
Is it going to be a protracted recovery? This year, it feels like there are too many signs for it not to be the start of the next new
cycle. If you asked me this a year ago, I would have been more cautious in my answer.
GlobeSt.com: What are you looking to do at RECON?
Kaplan: We have more meetings this year than we’ve had in
the last five years, which is emblematic of what we’ve been discussing.
NBC News talks to Cal State San Bernardino on Manufacturing Job Growth in the Inland Empire.
View more videos at: http://nbclosangeles.com.