California Cities In Demand
With rapidly growing residential populations and incomes, cities in Southern California are ripe for retail growth.
Anastasia Parsons

The bedroom and resort communities of Southern California are getting a lot of action lately. Development action, that is. Continued retail and residential growth in the Los Angeles and Orange County markets are radiating outward, sparking new and renewed activity in neighboring cities such as Fontana, Ontario and Whittier. While townships like Palm Springs and Rancho Mirage are continuing their balance of leisure destination tradition and the evolving needs of their year-round residents.

Fontana, California

Sierra Lakes Country Club, located north of the 210 Freeway between Citrus and Sierra avenues in Fontana, has been the impetus behind much of Lewis Retail Centers’ retail development in the Sierra Lakes area.

“We are an evolving marketplace adapting to the needs of our residents and visitors by actively working with retail developers to ensure that the desires of the community are fulfilled,” says Elisa Grey, economic development manager for the City of Fontana.

Topographically, Fontana resides within a few miles of Los Angeles, making it a prime residential market for the city’s commuters. Demographically, yearly household income for the area averages $85,000. This potential has enticed retailers from Costco, The Home Depot and LA Fitness Sports Clubs, to Applebee’s, the Coffee Bean & Tea Leaf, Jamba Juice, Marble Slab Creamery and Panera Bread Company to expand into and within the market.

Additionally, the city has created a development program known as the “North and South Fontana Economic Zones.” The program encourages retail development by defraying a portion, and sometimes all, of the development impact fees for public improvement, public service and community amenities projects. To be considered a Zone project, it must develop 5 acres or more and generate at least $250,000 in sales tax revenue.

Projects currently open, or slated to be open by year’s end in the Sierra sector, include Sierra Lakes Marketplace, Sierra Lakes West and Sierra Lakes Village. Lewis Retail Centers is the developer for each of these centers located north of Interstate 210 between Sierra and Citrus Avenues. The largest, Sierra Lakes Marketplace, features more than 300,000 square feet anchored by Lowe’s Home Improvement and Costco. The recently opened Sierra Lakes West sports 170,000 square feet and includes home improvement chain The Home Depot, while the slightly smaller Sierra Lakes Village will feature 107,000 square feet and a Ralph’s and Walgreens when opened in the fall.

A rendering of the Fontana Promenade’s “Restaurant Row” in Fontana.

Ontario, California

Ontario, California, is in a unique position. Situated at the intersection of several major Southern California highways and byways — including main vein Interstate 10 — the city has all the elements for retail growth potential. However, with the market now changing, the Southern California distribution hub is realigning its development focus to fulfill the needs of its 170,000 residents, and the 900,000 retail customers available within a 10-mile radius of Ontario.

“Movement of population has made our economy very strong in the Inland [Empire] region,” says Kelly Marks, economic development manager for the city of Ontario. “We have the sister airport to LAX, and now that we’re building out more lifestyle components, [Ontario has] become a very attractive place to live, work and play.”

Marks states that the city’s leadership is very focused on these goals, and has therefore approved the development of many mixed-use centers. The city’s hope is that Class A office space in these ventures will entice companies to consider Ontario and the business talent pool available in the area. Residential builds — such as New Model Colony built on 8,200 acres to accommodate 120,000 new residents — will house the anticipated business influx, and that new retail will follow to fill the gaps in services for the market.

Included at Panattoni’s new Piemonte project in Ontario will be this 11,000-seat arena managed by AEG, the same organization that runs the Los Angeles Staples Center.

The Inland Empire’s first pedestrian-oriented, urban village is a joint venture between Panattoni Development Company and the City of Ontario. Called Piemonte, this project will be the first Ontario retail undertaking for Panattoni, who has worked with the city in the past on industrial builds. A completion date for the project has yet to be determined, but current plans include 400,000 square feet of Class A office space; 364,080 square feet of retail and entertainment space; a 45,000-square-foot health club; a 200-room, business-class hotel; and 1,575 residential units. Additionally, the facility will feature an 11,000-seat arena managed by AEG, the same organization that runs the Los Angeles Staples Center.

Piemonte is a pedestrian-oriented urban village underway in Ontario. It will include 400,000 square feet of office space; 364,080 square feet of retail/ entertainment space; a 45,000-square-foot health club; a 200-room hotel; and 1,575 residential units.

Whittier, California

Whittier has seen resurgence in development activity over the past 3 years that has infused the market with new retail and brought city revitalization, according to Angelica Frausto, business development manager for Whittier, and Elise McCaleb, the city’s redevelopment manager. Whitwood Town Center is an example of these efforts. Originally a 62-acre mall, the site has now been converted by LNR Crossroads Marketplace LLC into a 758,927-square-foot lifestyle center complete with former mall tenants JCPenney, and new big box retailers Target, Cost Plus World Market, PetsMart, 24 Hour Fitness, Johnny Carino’s, Red Robin, Panera Bread Company and more. Whitwood is currently 98 percent leased and open to the public. Across the street from this center, developers have shown interest in developing a new commercial node currently in the planning stages.

On the west side of Whittier, The Quad is now seeing the results of some tenant improvement initiatives, allowing for the entrance of a Chili’s restaurant into the market, an establishment Whittier was not privy to before.

The zoning for uptown Whittier will also undergo some changes to allow for the building of a new mixed-use center in the city’s original business district. Moule & Polyzoides are developing the pedestrian-friendly project, and have been actively educating the community on what this new center will mean for the city and its residents. Retail will include upscale and boutique concepts, including some galleries, apparel establishments, restaurants and more, and adoption is expected by the end of the year.

Whittier and its government continue to work with retailers and developers in order to fill specific needs within the community, such as a major bookstore that will accommodate the two local colleges and a big box electronics store.

“I think the city’s really making an effort to make the development community know we’re willing to work with [them],” says McCaleb.

Palm Springs, California

The spectrum of retail — from big box and mid-sized, to boutique — is all in demand in Palm Springs. New retail developments and concepts are springing up all over the city, and the community’s involvement, either through demands on goods and services, or lobbying for projects to befit their lifestyle, continues to be a guiding factor for the city.

“Palm Springs is known for its village atmosphere,” says Cathy Van Horn, economic development and downtown administrator. “We have a lot of community input on projects. This city definitely has a lot of members in the community that are very vocal about projects downtown.”

A rendering of developer Lawrence Rael’s One Palm Canyon redevelopment project in Palm Springs. Opening June 2008, this downtown center will include 25,000 square feet of street-level retail, 116 residential condos and 16 work/live units.

Other mixed-use retail in development for the Palm Springs community includes Art Colony, South Palm Canyon and Palm Canyon 102. Art Colony is the redevelopment of an existing shopping center, by the Burnett Companies, into 15 live/work units and 153 residences, with first phase completion slated for 24 to 48 months from third quarter 2006. South Palm Canyon is a Brian Linnekens project that will feature 32,420 square feet of retail and 125 condos when it opens for business in spring 2008. The first phase of Palm Canyon 102 will be completed in 2007, with the second phase following 18 to 24 months later. This Martin Group/OJMR Architects project will house 15,000 square feet of retail space, 102 residential townhomes and a number of live/work lofts.

The Springs at Ramon and Gene Autry (a Charles Company project) will pull The Home Depot and Kohl’s into the Palm Springs area when it opens its 393,000-square-foot facility in spring 2007. Donahue Schriber will open the 175,000 square-foot Smoke Tree Commons in late 2007 to early 2008, and bring Michaels, Cost Plus World Market and Linens ‘n Things, among others, into the Palm Springs market. Additionally, Laurich Properties’ Tahquitz Plaza Commercial Shopping Center will sport 255,250 square feet upon its completion in fall 2008, and will be anchored by Vons grocery store.

Rancho Mirage, California

Rancho Mirage, California, has made its name as a rest and recuperation area thanks to its proximity to the prime tourist destination of Palm Desert and its reputation with facilities such as Eisenhower Medical. And it is the service to these industries that has initiated a boost in retail growth and development for the city, including numerous projects currently breaking ground, and others waiting in the pipeline.

“I think it’s the good location/access and [the] quality of product [that] makes developers feel good about the long term,” says Curt Watts, economic development director for Rancho Mirage.

Bordered on the north by Highway 111, Rancho Mirage is easily accessible to those commuting from neighboring areas. One soon to open destination for these consumers is One 11 Plaza, a 3.6-acre project being developed by the Alamo Group. Located at the corner of Highway 111 and Rancho Las Palmas Drive, One 11 Plaza will include 28,000 square feet of retail and restaurant space spread across two buildings and 8,000 square feet of offices in a third when completed. Two confirmed tenants, Starbucks Coffee and Bing Crosby’s Restaurant and Piano Lounge (an establishment themed around the image of the late crooner), are slated to be open by September/October 2006.

In Rancho Mirage, Monterey Marketplace II is an expansion project being lead by The Investment Group, scheduled to open early next year.

The strength of this retail market just continues to grow, according to Sean Smith, redevelopment analyst for Rancho Mirage. “Most retailers that are here are at the top of their chain in terms of sales and output,” says Smith.

“I think on a more long term basis, what we’re going to be seeing is not a huge increase, but a very measured growth to serve the immediate needs of Rancho Mirage,” adds Watts.