Since I arrived in the late 1980’s, every local City has stated that one of their key goals is to create more and higher quality local jobs. For decades, too many of our local residents have been forced to venture out in the pre-dawn hours to fight the traffic up and down the I-15 as they head to their higher paying jobs in San Diego, Orange and LA Counties. Our residents are then rewarded by an even longer return evening commute which brings them home late for dinner, only to have to repeat the same routine the next morning. The stress that these long commutes put on families, roads and overall quality of life are well documented, but won’t be addressed here.
For 30 years this same cycle as continued with little improvement. The lack of balance between the thriving population vs. a scarcity of quality local jobs remains one of the most concerning issues facing every local City.
In recent years, new industrial businesses have arrived, and existing businesses HAVE expanded locally. But the source for this growth – plentiful vacant buildings resulting from the Great Recession – has dried up. Today, there are no more empty buildings available for these job producers. The area’s industrial vacancy rate is under 2%. Few speculative buildings are under construction or in the planning stages. If business is going to move or expand in SW Riverside County, industrial businesses are going to have to buy land and build their facility from the ground up. The solution seems simple: these new and growing businesses simply need to buy a finished “shovel ready” lot, build their facility and hire from the local job pool. The logical result of this process would meet every city’s goal of reducing the resident / commuter ratio which leads to a stronger and thriving community. The process as described seems reasonable and attainable, right? Unfortunately, the above process only works if a company is able to locate and purchase “finished, shovel ready” lots.
Herein lies the problem: If a hypothetical 100,000 sq. ft medical manufacturer is interested in purchasing a 5 to 10 acre finished parcel and wants to build their own facility within the cities of Temecula, Murrieta, Wildomar, Lake Elsinore, Menifee or surrounding county areas, – there are ZERO sites available. There are only 3 locations that even HAVE finished land in excess of 5 acres. But for reasons that would take on a whole other article, these rare parcels are not for sale.
One would think “there’s plenty of vacant land in the area…you just need to grade it, bring in the utilities, pave a few streets and you’re in business”. Not so fast – those days are over!
Today, the process to convert raw land to finished parcels is incredibly difficult, requiring seemingly unlimited amounts of money, time, expertise, and patience. And did I mention it takes a lot of time money?!?
One of my clients who is an experienced, established developer recently had to work through the following agencies and jurisdictions in his attempt to transform 5 raw acres into a buildable parcel:
FEMA, Army Corps of Engineers, CA Dept. of Fish and Game, Riverside County Flood Control, Pechanga Indian Tribe, County Habitat Conservation, with honorable mentions to city planning, engineering, So Cal Edison and the local water district, among others. One of my favorites: he had to collect on site water to test if there were endangered fairy shrimp! I’m not making this up! This process took years and his costs were astronomical.
What used to be a seemingly straightforward process (creating finished lots) has now evolved into a long and expensive process. Business owners don’t have the time or expertise to tackle this difficult task. Similarly, individual land owners don’t have the resources to complete the process. Only a handful of large developers have the resources necessary to reach the finish line (and these large developers aren’t lining up to build in SW Riverside Co). The solution to solving the finished land shortage is complex. The solution will require the cooperation, communication and participation of the local cities, county, utility providers, state and federal agencies – many of which are listed above. In my client’s words: “There are absolutely too many agencies and layers to overcome. My request to the City is: give me a concise and consistent path on which to proceed. Provide us with milestones. Provide a point of contact for resolution if the milestones are not achieved. Time is as important as dollars”. He’s not looking to bend the rules, he simply needs to know what the rules are!
In the end, it is the individual CITY who is the largest stakeholder in this quest to provide quality jobs for its citizens. Don’t misunderstand my point: the CITY is not necessarily the problem (well sometimes, yes!). Most of the agencies listed aren’t under the City’s control. But it’s our local cities (with the assistance of private land owners and the development community) who have the resources, contacts and influence to reach and communicate with the utilities, county, state and federal agencies. If the City doesn’t take the lead in this issue, who else is going to?
Charley Black is a Senior Vice President and co-founder of Temecula Valley’s Lee & Associates Commercial Real Estate office, specializing in industrial, land and investment properties since 1988. Lee & Associates is a full-service commercial brokerage offering industrial, office, retail, land and investment expertise.
