The city of Chino Hills, California, embarked on a plan to accommodate its growing community — including a successful shopping center.
By Randall Shearin and Lynn Peisner
The Shoppes at Chino Hills is more than the first lifestyle center to come to the city of Chino Hills, California. The center itself is the culmination of a carefully conceived general plan.
Incorporated in 1991, the young Inland Empire city of approximately 75,000 made deliberate efforts to stake out the perfect parcel of land for the Shoppes at Chino Hills. A community park that was vital to the city's youth programs first had to be relocated, opened and operational before any ground could be broken for The Shoppes.
The project was a joint effort between the city and developer, Opus West, to guide the construction toward the goal of being more than a place to shop for residents of this somewhat rural pocket of San Bernardino County, but to function also as a part of the municipal center and a community gathering place.
The center was 96 percent leased when it opened in May 2008, just a few months prior to the economic downturn. Opus West filed for bankruptcy in 2009, and Bank of America brought onboard Richard Jones of PM Realty Group as consultant and general manager to prepare the center for sale while it was in receivership.
Chino Hills Mall LLC, a Newport Beach, California, private family trust, acquired The Shoppes at Chino Hills in spring 2010. The new ownership bought The Shoppes at Chino Hills in an all cash transaction and has since committed to and implemented capital improvements.
"There was about a year and a half during the transition when the center sat still and there wasn't any leasing going on," Jones says. "Now, we've signed 18 new leases. We were about 86 percent leased when it was purchased by the new ownership. Now we're 95 percent leased on the retail side, and the office space is 100 percent leased."
The center is home to Forever 21, Trader Joe's, P.F. Chang's, Yard House, Wood Ranch BBQ, RA Sushi, California Pizza Kitchen, Banana Republic, Barnes & Noble, Victoria's Secret, Coldwater Creek, Chico's, Brighton, White House-Black Market among others and the first H&M store in San Bernardino County, which is the largest county in the United States.
The main-street-style, mixed-use center was designed by architects Altoon + Porter, and sits on more than 25 acres with an 8-acre piece to the southeast that may be developed into more shops in the future. The center is adjacent to the City of Chino Hills' library, fire administration building, police, city hall and postal facilities. The shopping center hosts 315,000 square feet of retail, grocery and restaurant space and 60,000 square feet of office space.
"The development agreement was challenging," says Chino Hills Mayor Art Bennett. "It was a land swap where Opus and the city exchanged land. The agreement had a lot of milestones in it that had to be reached by both parties. The city had to build some of the related infrastructure nearby with strict deadlines to meet. The investment was $225 million between our facility [the city/civic buildings] and this facility [the shopping center]."
Consumer marketing is the engine that drives The Shoppes' efforts to serve as the community core for Chino Hills. The center actively connects with the market through outreach to local nonprofits, such as cause-related walks and runway fashion shows at the center to raise funds for breast cancer or to end human trafficking. Along with aggressive rebranding and advertising, the marketing team supports the city's town center concept with an annual community wine walk, summer concerts, local school parades, trick-or-treat events and a Christmas tree lighting. Many of these events have drawn crowds of more than 5,000 visitors.
The surrounding community was home to farms and ranches for most of the 20th century. Today, though hawks still fly overhead and the look is rural, there is promise in the trade area, which consists of approximately 1.2 million people within a 20-minute drive to the center, and a 2011 average household income of $86,162. The median age is 33.
Under the new ownership, the management staff at the center is utilizing additional financial resources to not only improve landscaping, signage, environmental graphics and common area soft seating, but to "connect The Shoppes emotionally" to the community, says Sarah Corrigan, director of marketing. "The first thing we did was launch our teen fashion council."
There are approximately five high schools within 5 miles of the center, and a diversely chosen teen fashion council helps reach those groups. Several retailers are in place to serve the young population, including Forever 21, H&M, Active, Aeropostale, Vans, Buckle and PacSun among others.
"We're well-balanced on the restaurant side," Jones says. "But there's opportunity here for national retailers. For example, we have so many high schools around here, a Niketown or a Foot Locker would be a good fit."
The center has experienced 20 months of positive sales growth, a result that is related to the center's vision to be an anchor within the city's social fabric.
"My core responsibility is to make sure the merchants benefit," Corrigan says. "But when they benefit, the community benefits. There is not one marketing program we have that doesn't tie into the community because that's what works here."
Building a City
Chino Hills enjoys a unique location in the western part of the Inland Empire region, which is east of Los Angeles. The rolling hills are a serene backdrop for the ranches and horse farms that settled the area. But the journey to cityhood hasn't always been picture-perfect. For the first 17 years after Chino Hills was incorporated, city hall was located in temporary trailers.
"We have always been conservative in allocating our resources," says Chino Hills Mayor Art Bennett. "That allowed us to build our permanent government center which now links to The Shoppes and helped create our 'downtown' for Chino Hills."
After describing the development that's taken place since 1991, he takes Chino Hills up several notches by calling it "the Beverly Hills of the Inland Empire." Smart growth, city and business officials would agree, is a large part of leading the city.
The Shoppes at Chino Hills, for example, is surrounded by approximately 3,000 acres of open space. Early on, the city conducted studies about how to protect the area's diverse changes in elevation, which led to a ridgeline protection initiative.
"We have a high quality of development that doesn't attract the developers who want to come in, make a quick dollar and then leave the city," Bennett says. "That's what makes us different than the rest of the Inland Empire."
The shopping center is well-located to four counties: Orange, Riverside, Los Angeles and San Bernardino. There is a synergy coming back to the Inland Empire, Bennett says. Chino Hills has made slow, careful adjustments to steer itself toward being a community with businesses and services that support a young, high-income community. This month Chino Hills was named Number 34 on Money magazine's 2012 list of the '100 Best Places to Live.'
"We do quarterly budget reviews, where our city manager and our finance director look at revenue projections," Bennett says. "We want any surprise to be on the positive side. If revenues aren't coming in, we will go in and make adjustments every quarter. By the end of this year, we're projecting an unrestricted general fund reserve of $15 million."
To achieve the reserve, the city has pursued solutions such as contracting with the San Bernardino County Sheriff's Department instead of supporting its own police department. Bennett shares an example of a neighboring city that pays approximately $27 million per year for its own police department, while the cost to Chino Hills is $9 to $11 million.
"In 1993, we reviewed zoning for the entire city," Bennett says. "Only 8 percent of the city was considered commercial in 1991. We looked at every piece of property that wasn't already restricted by the previous county specific plan. We determined how many acres should be commercial. We had determined all along that this [shopping center] was a prime spot. If we were going to do a town center concept, this is where it had to be."
— Randall Shearin and Lynn Peisner