HomeMy WebLinkAbout32-Development Services
ATTENDANCE SHEET
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ATTENDANCE SHEET
DATE:
TIME:
MEETING:
LOCATION:
Note: Pursuant to Government Code Section 54953.3 the signing,
registering or completion of this document is voluntary, and all
individuals may attend the meeting regardless of whether they
sign, register or complete this document.
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Economics Research Associates
ECONOMIC ANALYSIS FOR AN UPDATE OF
THE LAND USE ELEMENT
OF THE GENERAL PLAN
PREPARED FOR THE
CITY OF SAN BERNARDINO
DEVELOPMENT SERVICES DEPARTMENT
BY
ECONOMICS RESEARCH ASSOCIATES
NOVEMBER 5, 2001
PROJECT NO. 13;;;' ",{ '; """'~;~l.;,q ,11/5"/01__
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10990 V\I,l.,hlre Boulevard SUIte 1500 Los Angeles. CA 90024
310477.9585 FAX 310478,1950 www.econres,com ERA Is .ffili.t.d with Drly.,s Jon.s
Lo:o Angele:o San Franci:oco San Diego Chicago O..lI.u Wa5hington DC London
City of San Bernardino
Economic Development Issues
Summary ofIssues
Ongoing and Contemporary Challenges
. There are a number of factors that have continued to challenge the City of San
Bernardino during the past decade.
1. The national recession of the early 1990s
2. The closure of the Norton Air Force Base,
3. Increasing regional competitive forces in the commercial/industrial sectors
4. Challenges posed by the oncoming economic downturn
. The Closure of Norton Air Force Base had the most adverse effect on the City's
economy, beginning with a loss of 10,000 :!: jobs (eventually affecting the City's
reputation), a decline in retail sales, market shares and fiscal revenues, and less higher
value residential developments and/or improvements.
Assets
.
. San Bernardino, however, has many valuable assets, which could help restore its
economic activity within the Inland Empire as well as Southern California.
1. Its geographic location: The "Transcontinental Hub" concept and, the
surrounding mountain recreation opportunities
2. Reuse opportunities of the Norton Air Force Base facilities
3. Its consistency in attracting and retaining Federal, State, and County properties,
facilities, grants, improvements, and employment location commitments
4. The location of two strong educational institutions: The California State
University San Bernardino, and the San Bernardino Valley College.
Community Image-Themes to Build On
Events and Ceremonies
. The annual Route 66 Festival has "captured the brand". Shows the City's hosting
capacities.
. Some shows "get lost", including the National Orange Show
. The success of the new San Bernardino Baseball Stadium and Hospitality Lane
Governments Center of the Inland Empire
. A collection of governments of every level have clustered in the City, and have
continually reinvested in public/govemmental, health, and other facilities, including
the most modern buildings downtown.
. Should sustain and further collect governmental offices.
Educational Cluster
. CSUSB and SB Valley College bring 25,000+ students, 1,000+ faculty, and 900 staff.
Page 1 of 3
. Growth, in addition to a proactive policy towards incubator start-ups, will provide
more growth, and should be encouraged by the City, its Redevelopment Agency, and
in concert with the college and the university.
. Initiation of a College of Engineering at CSUSB
Geography/Topography and Historic Assets
. Acts as a transcontinental hub and gateway; growing as a utility hub as well.
. Transform the gateways and corridors into next generation hub functions
(information, communication, energy, mass media). Needs to utilize these Iocational
strengths as potential for growing businesses which utilize these locational assets.
. The I-15/Devore Cutoff and the airport expansion were "victories" tor Ontario in the
past, however, NOW San Bernardino may seize initiatives with next technologies and
somewhat more intensive land uses than the warehousing fields of the California
Commerce Center in Ontario.
Gateway to the Mountains and Deserts
. Could be the provisioning place and the recreational equipment stores cluster
location.
.
Generate an effective additional reputational quality
(Near Term) Economic Development Goals
1. Encourage economic activity expanding upon the existing and oncoming locational
strengths of San Bernardino
2. Identify and attract new employment types/land uses that complement the existing
employment clusters and foster long-term economic growth
3. Prevent retail sales leakage and recapture regional retail expenditure through key
sectors
4. Prepare for oncoming economic activities through adequate infrastructure
improvements, sensible plarming, and a business friendly environment
S. Clearly signal the multiple opportunity locations in San Bernardino for retail, office,
and industrial development _.______
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City of San Bernardino
General Plan Visioning Workshops
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The City is preparing a new General Plan to guide the future of San
Bernardino. Your ideas and concerns are important in the preparation of
the new General Plan. Visioning workshops will be held throughout the
City, focusing on issues and topics relevant to your community. Interested
residents, students, property owners, business owners, and community
leaders are encouraged to attend and participate. The input received at
these workshops will be incorporated into an issues/opportunities report,
and ultimately, included in the updated General Plan.
What is a Vision: A positive description and image of the community at some point in
the future.
What is a General Plan:The General Plan sets the foundation for decision making by
city officials concerning land uses, publiC services, the physical character of the
community, and other important aspects of community life. It is a document that
captures what is really important about a community and provides direction for making
those important things happen.
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Workshop date~ time, and locations: 151
. Tuesday, November 13th - New Hope Missionary Baptist Church, 1667 rt Medical
Center Drive, at 6:30 pm.
. Thursday, November lSth - Scottish Rite Temple, 4400 N. Varsity Avenue, at 6:30
pm.
. Tuesday, November 27th - Latter Day Saints Church, 3860 N. Waterman Avenue, at
6:30 pm.
. Thursday, November 29th - Feldheym Library, SSS W. 6th Street, at 6:30 pm.
For additional information contact the City of San Bernardino Planning Division at
909.384.50S7
City of San Bernardino
General Plan Visioning Workshops
,.
The City is preparing a new General Plan to guide the future of San
Bernardino. Your ideas and concerns are important in the preparation of
the new General Plan. Visioning workshops will be held throughout the
City, focusing on issues and topics relevant to your community. Interested
residents, students, property owners, business owners, and community
leaders are encouraged to attend and participate. The input received at
these workshops will be incorporated into an issues/opportunities report,
and ultimately, included in the updated General Plan.
What is a Vision: A positive description and image of the community at some point in
the future.
What is a General Plan:The General Plan sets the foundation for decision making by
city officials concerning land uses, public services, the physical character of the
community, and other important aspects of community life. It is a document that
captures what is really important about a community and provides direction for making
those important things happen.
Workshop date~ time, and locations:
. Tuesday, November 13th - New Hope Missionary Baptist Church, 1667 N. Medical
Center Drive, at 6:30 pm.
. Thursday, November 15th - Scottish Rite Temple, 4400 N. Varsity Avenue, at 6:30
pm.
. Tuesday, November 27th - Latter Day Saints Church, 3860 N. Waterman Avenue, at
6:30 pm.
. Thursday, November 29th - Feldheym Library, 555 W. 6th Street, at 6:30 pm.
For additional information contact the City of San Bernardino Planning Division at
909.384.5057
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ECONOMIC ANALYSIS FOR AN
UPDATE OF THE LAND USE ELEMENT
OF THE GENERAL PLAN
PREPARED FOR
CITY OF SAN BERNARDINO
DEVELOPMENT SERVICES DEPARTMENT
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Economics Research Associates
ECONOMIC ANALYSIS FOR AN
UPDATE OF THE LAND USE ELEMENT
OF THE GENERAL PLAN
PREPARED FOR
CITY OF SAN BERNARDINO
DEVELOPMENT SERVICES DEPARTMENT
PREPARED BY
ECONOMICS RESEARCH ASSOCIATES
SEPTEMBER 2001
ERA PROJECT NO. 13718
10990 Wilshire Boulevard Suite 1500
Los Angeles. CA 90024 ERA is .ftlll.tad with 0'1..... Jon..
310.477.9585 FAX 310.478.1950 www.econres.com
Los Angeles San Francisco San Diego
Chicago Washington DC London
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TABLE OF CONTENTS
Section
I
EXECUTIVE SUMMARy..........................................................
Introduction................................................................................. .
Population and Demography........................................................
Employment.................................................................................
Real Estate Market .......................................................................
General Limiting Conditions .......................................................
II
INTRODUCTION .......................................................................
III
POPULATION AND DEMOGRAPHY ......................................
Introduction................................................................................. .
Population Growth Composition .................................................
Housing Growth Composition .....................................................
Market Area Characteristics.........................................................
Conclusion ...................................................................................
IV
EMPLOYMENT ..........................................................................
Introduction ..................................................................................
Regional Employment Growth ....................................................
Employment Clusters ...................................................................
Regional Shift.Share Analysis .....................................................
Concl usions..................................................................................
V
REAL ESTATE MARKET .........................................................
Introduction ..................................................................................
Office Market Trends ...................................................................
Industrial Market..........................................................................
Retail Markel................................................................................
Hotel Market ................................................................................
Concl usions..................................................................................
VI
MARKET DEMAND ESTIMATES ...........................................
Introduction................................................................................ ..
Office and Industrial Uses............................................................
Retail Demand..............................................................................
Overnight Visitor Market.............................................................
Conclusion ....................................................................................
1
Pal!e
1- I
1- I
1- I
1- 2
1- 5
1- 8
11- I
III. I
III- I
III- I
III- 3
III- 7
III-I5
IV. I
IV. I
IV- I
IV. 6
IV-20
IV-25
V- I
V- I
V- 2
V-13
V-I8
V-26
V-30
VI- I
VI- 1
VI- 1
VI- 4
VI- 6
VI- 6
Economics Research Associates
ERA Project No. 13718
City of San Bernardino
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TABLE OF CONTENTS
(Continued)
Section
VII
SUMMARY OF MARKET OPPORTUNITIES .........................
Introduction ..................................................................................
Office Development .....................................................................
Industrial Development ................................................................
Retail Development......................................................................
Hotel Development Opportunities ...............................................
Concl usions..................................................................................
VIII
FISCAL IMPACT ANALYSIS ...................................................
Introduction................................................................................. .
Conclusion ...................................................................................
IX
ECONOMIC DEVELOPMENT ISSUES, GOALS,
OBJECTIVES AND POLICIES ..................................................
Introduction................................................................................. .
Summary of Issues .......................................................................
Community Image-Themes to Build On...................................
Gateway to the Mountains and Deserts........................................
Goals, Objectives and Policies ....................................................
Pal!e
VII- 1
VII- 1
VII. 1
VII- 3
VII. 5
VII- 7
VII- 8
VIII. 1
VIII- 1
VIII- 6
IX- 1
IX. 1
IX- 1
IX- 3
IX- 5
IX- 6
Economics Research Associates
ERA Project No. 13718.
City of San Bernardino
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Table No.
1- 1
III. 1
III. 2
III. 3
III- 4
III- 5
III- 6
IV- 1
IV- 2
IV- 3
IV- 4
IV- 5
IV. 6
LIST OF TABLES
EMPLOYMENT CLUSTERS IN THE CITY OF SAN
BERNARDINO, 1999-2000 ........................................................
CITY OF SAN BERNARDINO AND SAN BERNARDINO
COUNTY HISTORIC POPULATION AND HOUSING
ESTIMATES, 1990.2000 ............................................................
RESIDENTIAL PERMIT TRENDS ...........................................
MEDIAN HOME PRICES (November 1997-January 2000) ......
SAN BERNARDINO NEW HOME SALES (Fourth Quarter
2000) ............................................................................................
POPULATION AND HOUSEHOLD CHARACTERISTICS....
INCOME CHARACTERISTICS ................................................
EMPLOYMENT GROWTH: RIVERSIDE-
SAN BERNARDINO PMSA VERSUS CITY OF
SAN BERNARDINO ..................................................................
NON-FARM EMPLOYMENT TRENDS BY SECTORS IN
RIVERSIDE-SAN BERNARDINO PMSA ................................
EMPLOYMENT PROJECTIONS: RIVERSIDE-
SAN BERNARDINO PMSA ......................................................
EMPLOYMENT BY SIC CODES: CITY OF SAN
BERNARDINO VERSUS SAN BERNARDINO COUNTY .....
ESTABLISHMENTS BY SIC CODES: CITY OF SAN
BERNARDINO VERSUS SAN BERNARDINO COUNTY .....
SALES BY SIC CODES: CITY OF SAN BERNARDINO
VERSUS SAN BERNARDINO COUNTY ................................
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Pal!:e
1- 3
III- 2
III- 4
III- 5
III- 6
III-I0
III-ll
IV. 2
IV- 4
IV- 5
IV. 7
IV- 8
IV- 9
Economics Research Associates
ERA Project No. 13718
City of San Bernardino
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Table No.
IV- 7
IV- 8
V- I
V. 2
V- 3
V- 4
V- S
V- 6
V- 7
V.8
V.9
V.lO
LIST OF TABLES
(Continued)
EMPLOYMENT CLUSTERS IN THE CITY OF SAN
BERNARDINO ...........................................................................
REGIONAL SHIFf-SHARE ANALYSIS:
SAN BERNARDINO COUNTY VERSUS SOUTHERN
CALIFORNIA FIVE-COUNTY REGION .................................
INLAND EMPIRE OFFICE MARKET INVENTORY
VERSUS VACANCY ................................................................
INLAND EMPIRE OFFICE MARKET ABSORPTION.
RENTS AND SPACES UNDER CONSTRUCTION .................
OFFICE INVENTORY BY BUILDING CLASS
(2000 Third Quarter) ....................................................................
OFFICE INVENTORY BY BUILDING SIZE
(2000 Third Quarter)....................................................................
CITY OF SAN BERNARDINO: CONTEMPORARY
OFFICE MARKET CHARACTERISTICS ................................
CITY OF SAN BERNARDINO: RECENT OFFICE
BUILDING FOR LEASE LISTINGS .........................................
INLAND EMPIRE OFFICE MARKET: SELECTED
ONCOMING DEVELOPMENTS ...............................................
CITY OF SAN BERNARDINO: RECENT OFFICE
PROPERTY SALES ....................................................................
2000 THIRD QUARTER MARKET OVERVIEW....................
SAN BERNARDINO INDUSTRIAL MARKET OVERVIEW
(Third Quarter 2000) ....................................................................
Pal!e
IV-ll
IV- 23
V- 4
V- 6
V.7
V- 8
V- 9
V-lO
V-lO
V-ll
V-IS
V-I6
Economics Research Associates
ERA Project No. 13718
City of San Bernardino
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Table No,
V-ll
V.12
V-13
V-14
V-IS
V-16
V-17
V-18
V-19
VI- 1
VI- 2
VI- 3
VI. 4
LIST OF TABLES
(Continued)
INLAND EMPIRE INDUSTRIAL MARKET: TOTAL
PRELEASING ACTIVITY AS OF THIRD QUARTER 2000...
CITY OF SAN BERNARDINO RECENT INDUSTRIAL
FOR LEASE LISTINGS..............................................................
CITY OF SAN BERNARDINO: RECENT INDUSTRIAL
BUILDING SALES .....................................................................
TAXABLE SALES IN THE CITY OF SAN BERNARDINO...
TAXABLE SALES COMPARISONS ........................................
TAXABLE SALES SHARES .....................................................
TAXABLE SALES PER CAPITA IN THE CITY OF
SAN BERNARDINO AND ENVIRONS....................................
RETAIL CENTER CHARACTERISTICS IN
SAN BERNARDINO CITY ........................................................
HOTEL MARKET TRENDS ......................................................
OFFICE AND INDUSTRIAL SUPPORTABLE SPACE
ANALYSIS (1999) ......................................................................
OFFICE AND INDUSTRIAL SUPPORTABLE SPACE
ANALYSIS (2004) ......................................................................
RETAIL MARKET DEMAND ...................................................
ESTIMATED NUMBER OF BUSINESS VISITORS TO THE
CITY OF SAN BERNARDINO (1999) ......................................
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V-17
V-19
V.20
V-22
V-24
V-2S
V-28
V-29
V-31
VI- 2
VI- 3
VI- S
VI- 7
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Table No.
VIII - I
VIII- 2
VIII - 3
VIII - 4
LIST OF TABLES
(Continued)
SAN BERNARDINO GENERAL PLAN FISCAL IMPACT
ANALYSIS ..................................................................................
BUILDING V ALUA TIONS........................................................
PROPERTY TAX VALUATION (NON-RESIDENTIAL)........
FISCAL IMPACT OF NON-RESIDENTIAL USES).................
Pal!e
VIII. 3
VIII. 4
VIII. 5
VIII - 7
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Fil!ure No.
III. 1
III- 2
IV- 1
IV- 2
IV- 3
IV- 4
IV. 5
IV- 6
IV- 7
LIST OF FIGURES
MARKET AREA DEFINITION (CENTROID 1-215
AND 6TH STREET)....................................................................
POPULATION DISTRIBUTION, 1999......................................
EMPLOYMENT DISTRIBUTION, 1999...................................
NON-DURABLE MANUFACTURING ESTABLISHMENTS.
TRANSPORTATION RELATED ESTABLISHMENTS...........
FINANCE, INSURANCE AND REAL ESTATE RELATED
ESTABLISHMENTS ..................................................................
HEALTH SERVICES RELATED ESTABLISHMENTS ..........
EDUCATIONAL SERVICES RELATED ESTABLISHMENTS
PUBLIC ADMINISTRATION RELATED ESTABLISHMENTS
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III- 8
III.12
IV-13
IV-IS
IV-17
IV-18
IV.19
IV-21
IV-22
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City of San Bernardino
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LIST OF EXHIBITS
Exhibit No.
Pal!e
y. 1
TAXABLE RETAIL SALES TRENDS IN SAN
BERNARDINO AND ENYIRONS.............................................
Y- 27
Y- 2
TAXABLE NON-RETAIL SALES TRENDS IN SAN
BERNARDINO AND ENYIRONS.............................................
Y- 27
y. 3
SAN BERNARDINO HOTEL MARKET TRENDS ..................
Y.32
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Section I
EXECUTIVE SUMMARY
INTRODUCTION
In this assignment Economics Research Associates (ERA) has been tasked by the
City of San Bernardino's Development Services Department to undertake an economic
analysis for an update of the land use element for the City's General Plan. ERA was asked to
examine the current market conditions in San Bernardino for development of nonresidential
land uses. This report contains an extensive analysis of the market for these land uses within
the City in the context of the broader real estate market of the Inland Empire and Southern
California as a whole. In addition to the analysis of the real estate market, the report also
includes an overview of population demography and economic conditions in the City, along
with a review of San Bernardino's employment both in terms of the City's labor force, i.e.,
the job of residents who live in San Bernardino, and employment base, i.e., jobs in San
Bernardino regardless of the place of residence of the employee.
This report also contains an analysis of the fiscal impacts of development of
nonresidential development in the City of San Bernardino, which can be used as a planning
tool to assess the affects of new development on the General Fund revenues on the City of
San Bernardino. Finally, this report concludes with a series of policy recommendations that
can be used to inform the development of a new land use element for the City's General Plan.
This includes a series of objectives that can be met by implementable policies that may be
used directly in that effort. This Executive Summary contains an outline overview of the key
findings of the report.
POPULATION AND DEMOGRAPHY
The 2000 census estimates population of the City of San Bernardino to be 185,401
persons. This represents approximately 11 percent of the total population of the County of San
Economics Research Associates
ERA Project No.13718
City of San Bernardino
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Bernardino. During the past decade, the City's population has grown at a rate of 1.4 percent
annually which has trailed countywide growth (1.8 percent). While the population base of the
City of San Bernardino has been growing, it has not kept pace with growth experienced in the
County as a whole. The slower rate of population growth is coupled by a growth in
concentration of persons under the age of 18 in family households. For 1999, the median
household income for the City of San Bernardino can be estimated at about $32,000 which is
considerably lower than the countywide median of just over $40,000 per year.
One of the great strengths of the City of San Bernardino is the racial and ethnic diversity
found among its residents. San Bernardino represents the core of the most ethnically and
racially diverse areas of the entire Inland Empire. This community diversity has the potential to
be a source of differentiation, and market strength now and into the future. For example, San
Bernardino's linguistic diversity, in terms of its Spanish speaking labor force, could be a
strength to attract (Spanish speaking) telephone call centers and employers requiring Spanish
skills. In addition, diversity could also be an asset in terms of marketing niche
retail/entertainment products (specialty stores, markets, festivals) or 'cultural theming' of
existing retail enclaves. The City has enhanced eligibility for focused job training resources.
EMPLOYMENT
According to 1999 estimates, San Bernardino is the site of approximately 74,000 jobs.
While the economy of the Inland Empire as a whole has been growing, the City of San
Bernardino was more severely affected by the regionwide recession of the early '90s due to
the closure of Norton Air Force Base and defense-service related establishments. Though the
Inland Empire as a whole has shown a relatively fast-paced recovery from the recession, the
City of San Bernardino's recovery has been able to keep pace. Currently, the City accounts
for approximately 14 percent of total jobs in the County. An analysis of employment data
shows the following key employment clusters for the City of San Bernardino (see Table 1-1).
It is evident that the City of San Bernardino's decreasing share of regional
employment can be attributed, for the most part, to its eroding competitive position within
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the region. The increasing strength of Ontario, in terms of transportation connections and
readily available floor space, as well as the competitive labor force and amenity advantages
available in Riverside, make both these communities strong competitors of San Bernardino.
Table 1-1
Employment Clusters in the City of San Bernardino
1999-2000
Employment Sales Establishments Share
Number Share $ Mil. Share Number Share of
County
Health Services 9,771 13% 1,122 15% 467 8.1% 17%
Educational Services 8,498 11% 790 10% 137 2.4% 19%
Public Administration 7,510 10% 0% 224 3.9% 29%
Real Estate 2,251 3% 342 4% 280 4.9% 18%
Business Services 2,084 3% 259 3% 266 4.6% 10%
Special Trade 1,633 2% 224 3% 207 3.6% 10%
Contractors
Printing & Publishing 1,536 2% 82 1% 62 1.1% 28%
Legal Services 1,112 2% 198 3% 187 3.3% 36%
TOTAL 34,395 46% 3,017 39% 1,830 32%
Source: Economics Research Associates and Claritas
In addition, San Bernardino has undergone a relatively tough transition in recovering from
the last recession due to the closure of Norton Air Force Base, which was a major economic
engine for the city, especially in terms of creating high value civilian jobs through defense
contracts.
It would be wrong, however, to say that opportunities are limited for the future. The
City has the potential for retaining and expanding certain key employment sectors that have
traditionally located here. This would depend not only on the identification of these
potentially strong sectors, but also in a proactive program to attract and retain employment
through partnerships, alliances and marketing efforts. Some of these existing and expanding
sectors are found to be:
1. Light industrial and manufacturing, especially in terms of non-durable goods
and services. The city could build on the existing Printing and Publishing
Sector. Market opportunities for full service publishing facilities that include
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both design and production should be explored. Opportunities also. exist in
apparel (production) and specialty food (preparation/packaging) sectors.
These opportunities are not limited to low-skill employment, but could be in
the form of a range of high value products and services.
2. The Health Services cluster that has a larger proportion of high value jobs
provides tremendous opportunities. Note also that the City is adjacent to the
significant potential growth medical center and research activities at Lorna
Linda Hospital.
3. Partnerships and alliances with the Educational Services sector will be very
important in not only creating a competitive labor pool, but also in providing a
regional amenity.
4. Transportation is evolving as a core employment sector in the region and
opportunities exist for continued capture of Transportation related jobs (both
in terms of goods and passenger transportation).
5. It is important to retain the existing cluster of government offices, as they
provide a sustained demand for business and professional services in the City.
However, caution should be taken at the potential risks posed by relocation
and downsizing of certain administrative sectors.
6. Call Centers and other services not dependent on product delivery will need a
low cost environment and diverse (including multi-lingual) labor force.
7. Opportunities for Wholesale Trade related uses with frontage to the Interstate-
215 should be explored. Eventual completion of the 1-21O/Route 30
Connection (2005/2006) will provide significant locational advantage.
REAL ESTATE MARKET
In this analysis, ERA undertook a review of the broader real estate market for
nonresidential land uses in the Inland Empire with a focus on the following:
Economics Researcb Associates
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City of San Bernardino
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1
. Office
. Industrial
. Retail
. Hotel
Sections V and VI of the report give detailed information regarding the performance of
the real estate market in both the Inland Empire and the City of San Bernardino as a whole.
Market indicators suggest that San Bernardino will experience increase in demand for industrial
space, and to a lesser extent, demand for additional commercial office. However, given the
current market conditions and the absence of a major market transforming project such as those
represented by the Vision 2020 (lakes and streams plan), the City of San Bernardino is overbuilt
in retail space. This does not mean, however, that the City will not see any new retail
development in the near term. In fact, it is likely to be the focus of continuing interest by large-
format retailers such as Wal-Mart, Kohl's, and home stores such as Lowe's or Home Depot.
However, ERA anticipates that this will represent a marginal growth in retail demand which
will make existing developments, particularly strip retail, highly vulnerable to new competition.
As a result, only marginal increases will occur in the total net volume of occupied retail space
in the City of San Bernardino.
Office
The demand for office space in the Inland Empire, particularly east of Ontario, is
forecast to increase in the next 5 to 10 years. ERA's preliminary supportable space estimate
shows that the City of San Bernardino's office market is currently overbuilt. However,
projected employment growth estimates show that the City could capture as much as 170,000
square feet annually over the next five years. Most of this oncoming office demand in San
Bernardino is likely to be fulfilled by infill development in the downtown area. From a land
use perspective, the City should be proactive in promoting infill and mixed office
commercial development in the downtown area. Ma~ket conditions which permit some
lower-density office park type development can be accommodated in the northern part of the
Economics Research Associates
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City either along the 1-215 corridor or adjacent to Cal State San Bernardino (CSUSB). This
can serve as an effective buffer between oncoming new residential development to the north,
and potential industrial uses that might locate along the freeway. Completion of the 1-
21O/Route 30 connection will also increase office location advantage. The City should also
be proactive in promoting mixed office and commercial uses in the Downtown area and the
area adjacent to CSUSB.
The total over the life of the plan at saturation, ERA forecasts net new demand of
slightly over 850,000 square feet of new office space in the City of San Bernardino, which
would require approximately 27 acres to accommodate.
Industrial Development
Industrial vacancies in the City of San Bernardino (4.8 percent) are significantly
lower than the regional market as a whole at 7.1 percent. Industrial rents, however, are still
lower than the regional average. ERA's preliminary demand estimates show that the current
industrial market in the City may be marginally overbuilt. The City, however, could absorb
approximately 400,000 square feet annually over the next four years, with the capacity to
accommodate approximately 2 million square feet by the end of the planning period. In the
short tenn, most of the industrial growth is expected to be in the warehouse distribution
sector due to the availability of prime locations with access to the regional interstate highway
system. This could be expanded to include key manufacturing and R&D sectors if the City is
able to establish pro-active alliances with existing educational and professional institutions
(universities, medical facilities, and hospitals). ERA forecasts that over the planning period
the market will demand approximately 2 million square feet in net new industrial space in the
City of San Bernardino which can be accommodated on approximately 151 acres.
Retail Development
Although the City of San Bernardino continues to attract retail dollars from
neighboring communities, its position as a retail center is declining. As evidence of this,
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most of the multi-tenant retail centers in the City are experienced vacancies ranging from 15
to 40 percent. ERA's preliminary analysis shows that the existing retail stock is overbuilt by
approximately 400,000 square feet. Given current growth rates, it is unlikely that all this
space will be reabsorbed in the next 5 to 10 years. However, with oncoming new retail
formats and the possibility for improved market conditions, it is safe to plan for a marginal
amount of net new growth in retail space. For the purposes of this plan, ERA anticipates net
new demand in retail growth to be approximately 10,000 square feet.
Realization of the City's Vision 2020 project (lakes and streams) as a regional" town
center" and recreation attraction, could be a significant catalyst in helping San Bernardino to
retain its regional retail position.
Hotel Development
Currently, the hotel market in the City of San Bernardino shows moderate demand for
new rooms. Both room supply and room demand have remained relatively flat over the past
five years. However, the existing clusters of federal, state, and county offices will continue
to demand a certain continuing level of moderately priced business hotels in the City. The
current and future market conditions in the region do not suggest a strong demand for more
hotel rooms in San Bernardino. This is particularly true because of the intense cluster of
hotels/executive suites at Ontario airport environs. While demand for more total hotel rooms
is not strongly demonstrated, certain hotel types may be under supplied such as modem
business-serving hotels. Over the next four to five years, San Bernardino could potentially
add approximately 200 mid.priced, business quality hotel rooms in the City.
GENERAL LIMITING CONDITIONS
Every reasonable effort has been made to ensure that the data contained in this study
reflect the most accurate and timely information possible, and they are believed to be reliable.
This study is based on estimates, assumptions, and other information developed by Economics
Research Associates from its independent research effort, general knowledge of the industry
Economics Research Associates
ERA Project No.13718
City of San Bernardino
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and consultations with the client and the client's representatives. No responsibility is assumed
for inaccuracies in reporting by the client, the client's agent and representatives or any other
data source used in preparing or presenting this study.
This report is based on information that was current as of September 2001 and
Economics Research Associates has not undertaken any update of its research effort since such
date.
No warranty or representation is made by Economics Research Associates that any of
the projected values or results contained in this study will actually be achieved.
Possession of this study does not carry with it the right of publication thereof or to use
the name of "Economics Research Associates" in any manner without first obtaining the prior
written consent of Economics Research Associates. No abstracting, excerpting or
summarization of this study may be made without first obtaining the prior written consent of
Economics Research Associates. This report is not to be used in conjunction with any public or
private offering of securities or other similar purpose where it may be relied upon to any degree
by any person other than the client without first obtaining the prior written consent of
Economics Research Associates. This study may not be used for purposes other than that for
which it is prepared or for which prior written consent has first been obtained from Economics
Research Associates.
This study is qualified in its entirety by, and should be considered in light of, these
limitations, conditions and considerations.
Economics Research Associates
ERA Project No.13718
City of San Bernardino
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Section n
INTRODUCTION
In this assignment, ERA has been charged with determining the market demand for land
uses within the City of San Bernardino. The market demand analysis is not intended to be a
prescriptive document which would guide the General Plan process towards the selection of one
particular mix of land uses over another, but rather sets out to identify the current factors of
demand that are present in the market for the City of San Bernardino and the San Bernardino/
Inland Empire market area as a whole.
We have been charged with identifying this market demand on the basis of the highest
and best economic use of the parcels that are available for development within the City. This
analysis takes the perspective of a private landowner by asking the question: "What is the most
economically efficient use of a given parcel within the City?" However, the City planning
process does not always require that the highest and best economic use be what is eventually
incorporated into the general plan.
There may be legitimate community planning reasons why one category of uses is
preferred over another. These reasons may include aesthetics, community character,
employment generation, or identified deficit of a certain service or land use category that is
needed in the community - all of which can be addressed through the General Plan process.
However, there are consequences (solely from a market perspective), to selecting less than
optimal permitted land uses.
The effects of making a less than maximal, economically efficient distribution of land
uses fall primarily into two categories: (1) fiscal and (2) timing of development. In the first
case, by choosing a lower valued land use, any development that takes place will have a
resultant lower assessed valuation. That lower assessed valuation will result in less property
tax revenue to the City of San Bernardino's General Fund or will reduce the increment (i.e.,
the new additional value of development available within the district) created for
redevelopment projects. This would have the effect of reducing the amount of revenue that
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would be available to be directed towards infrastructure improvements and other capital
investments that would support the implementation of the overall vision contained within the
General Plan.
An example of the second consequence, timing of development, is that while the
community may have a specific outcome in mind, if market conditions are not in line with
that vision land may remain underutilized or vacant until market conditions change. There
may be certain strategic parcels, such as those with access to the 1-215 corridor, that may be
appropriate to hold in reserve until a development that meets community goals for economic
development or employment generation becomes feasible on that site.
Underlying the whole discussion, contained within the market study, is the notion of
land value. Land value is determined by four major factors:
1. Location -- Where a specific parcel or piece of land is located, and what are its
physical limitations/strengths.
2. Infrastructure and neighboring land uses -- The presence of complementary or
compatible land uses nearby, along with appropriate supporting infrastructure that
either supports or prevents certain economic activities from taking place
3. Entitlements -- The legal restrictions on what can be built on a given parcel, zoning,
and development standards. It is through the General Plan process that the
entitlements will be established. It will therefore determine one of the critical
components of the ultimate land value and therefore the ultimate disposition of land.
4. Demand - Market demand for types of land uses feasible on the site in order to
determine the 'highest and best' use.
Because the city is a mature market, there are some significant constraints that limit
the ability to alter the trajectory of development; i.e., available parcels for development will
likely need some reconfiguration or redevelopment of existing uses. There is, however, a
significant amount of undeveloped or vacant land within the City of San Bernardino. Also
many buildings will require some kind of reuse, adaptation, demolition, and/or clearance
where the economics of redevelopment make sense.
Economics Research Associates
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City of San Bernardino
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It is important to realize that in performing this market study, Economics Research
Associates has been looking at a broader market area than just the boundaries of the City of
San Bernardino. The districts that comprise the plan area are complicated in shape and have
interactions with adjacent and other neighboring land uses. More importantly, no market
analysis can take place in a vacuum which only considers conditions within the district
without consideration of the broader economy. In this market analysis, ERA will be looking
at how the City of San Bernardino fits in with market conditions in the broader area of the
Inland Empire. It is with this perspective that ERA offers the following review of general
market conditions affecting the City of San Bernardino.
Economics Research Associates
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City of San Bernardino
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Section III
POPULATION AND DEMOGRAPHY
INTRODUCTION
Economics Research Associates (ERA) was retained by the City of San Bernardino to
assist in its update of the Land Use Element of the General Plan. This report presents an
analysis of the City's economic and demographic base, potential trends and available
markets. This base analysis lays the foundation for the City's commercial and industrial land
use strategy, which will be formulated in the next task.
POPULATION GROWTH COMPOSITION
Table III-I presents population and housing growth in the City of San Bernardino
compared to San Bernardino County, from 1990 to the year 2000. The 2000 census
estimates the population of the City of San Bernardino to be 185,401. This is approximately
11 percent of the countywide population of 1,709,434. However, during the past decade
(1990-2000), the City's population has grown at a rate of 1.4 percent annually, which is
lower than the countywide growth rate of 1.8 percent. In absolute terms, the City's
population has grown by 13 percent during the 1990-2000 period, compared to the
countywide increase of 19 percent during the same period. Also, the City's share of
countywide population has steadily decreased during this period, from an 11.6 percent share
in 1990 to an 11 percent share in 2000. Though the City's share of 'non-household,]
population is marginally higher at 3 percent of total, compared to the countywide share of 2
percent, this has been gradually falling over the years.
1 Includes population in group quarters
Economics Researcb Associates
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City of San Bernardino
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HOUSING GROWTH COMPOSITION
Residential Permits
Table III-2 presents residential pennittrends in the City of San Bernardino compared
to the County. Annual residential pennit issues dropped significantly during the 1990-95
period in both the City and the County of San Bernardino. This period reflects the 'recovery
lag' from the past recession, and low development activity should not be considered
uncommon. However, pennit volumes in the City of San Bernardino continued to fall into
the next year (1996), while the countywide pennit volumes increased rapidly. Similar trends
are reflected in the pennit valuations. Consequently, the City's share of countywide pennit
volumes also decreased. In 1990 The City accounted for 7.7 percent (848 units) of the total
10,990 single family residential pennits issued countywide, in 2000 this share fell to only 1.3
percent. The City issued no multifamily pennits since 1995, while the countywide share of
multifamily penn its has been steadily increasing since 1995.
Home Values
Table III-3 presents median home prices in the City of San Bernardino compared to
the County as a whole during the November 1997 - January 2000 period. Median home
prices in the City of San Bernardino are approximately 20 to 30 percent lower than the
countywide median. In January 2000, the median sales price of a home in the City of San
Bernardino was $86,250 compared to the countywide median of $109,0002. However, home
prices in the City have increased at a higher rate than the County as a whole. The average
monthly growth rate in the countywide median home price (during the analysis period) was
only 0.2 percent to the corresponding growth rate in the City of 0.6 percent.
One of the reasons for relatively low home values in the City of San Bernardino is the
lack of newer residential developments (with higher values). Most of the housing stock is
smaller and older. Table III-4 presents new home values in San Bernardino County
communities on a per-square-foot basis (as of the 4th quarter of 2000). Average new home
2 These prices reflect all residential types and do not necessarily reflect Single Family homes only
Economics Researcb Associates
ERA Project No. 13718
City of San Bernardino
Page UI-3
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Table 1Il.2
Residential Permit Trends
Permits Issued
,
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1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
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SaD Bernardioo County
SFU MFU ToIiJ/
10,990 2,260 13,250
5,940 869 6,809
5,884 1,367 7,251
5,296 482 5,778
4,664 145 4,809
3,801 127 3,928
4,660 162 4,822
5,012 347 5,359
5,616 511 6,127
6,496 239 6,735
5,736 704 6,440
City of SaD Bernardioo
SFU MFU ToIiJ/
848 202 1,050
412 28 440
368 72 440
297 248 545
171 2 173
98 98
96 96
108 108
137 137
120 120
76 76
ValuatioD ($0005)
City as a % of Couaty
SFU MFU Total
7.7% 8.9% 7.9%
6.9% 3.2% 6.5%
6.3% 5.3% 6.1%
5.6% 51.5% 9.4%
3.7% 1.4% 3.6%
2.6% 0.0% 2.5%
2.1% 0.0% 2.0%
2.2% 0.0% 2.0%
2.4% 0.0% 2.2%
1.8% 0.0% 1.8%
1.3% 0.0% 1.2%
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1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
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San Bernardino County
SFU MFU Total
1,240,622 122,605 1,363,227
652,331 51,754 704,085
649,166 71,817 720,983
592,693 24,305 616,998
576,207 12,774 588,981
481,373 12,185 493,558
616,393 10,937 627,330
722,007 21,963 743,970
884,666 27,069 911,735
1,140,669 13,087 1,153,756
993,235 44,888 1,038,123
City of San Bernardioo
SFU MFU ToIiJ/
92,126 7,703 99,829
46,038 1,327 47,365
42,458 4.669 47,127
33,303 8,745 42,048
18,846 171 19,017
10,590 10,590
11,317 11,317
13,035 13.035
17,192 17,192
15,061 15,061
10,096 10,096
Citv as a % of County
SFU MFU ToIiJ/
7.4% 6.3% 7.3%
7.1% 2.6% 6.7%
6.5% 6.5% 6.5%
5.6% 36.0% 6.8%
3.3% 1.3% 3.2%
2.2% 0.0% 2.1 %
1.8% 0.0% 1.8%
1.8% 0.0% 1.8%
1.9% 0.0% 1.9%
1.3% 0.0% 1.3%
1.0% 0.00/0 1.0%
I
Note:
1. SFU = Single Family Units
2. MFU = Multi Family Units
I
Source: Economics Research Associates and Economics Sciences Corporation
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Table m-3
Median Home Prices (Nov,'97- Jan.'OO)
City or San San Bernardino
Bernardino COUDty
Nov.97 $73,500 $102,000
Oec.97 $72,000 $100,000
1an.98 $73,000 $100,000
Feb.98 $72,500 $105,000
Mar.98 $70,000 $102,000
Apr.98 $75,000 $105,000
May.98 $77,500 $105,000
1un.98 $75,000 $107,500
1ul.98 $79,000 $110,000
Aug.98 $74,000 $107,800
Sep-98 $77,000 $110,000
Oct.98 $79,000 $107,000
Nov.98 $76,750 $105,000
Oec.98 $79,750 $104,000
1an.99 $78,000 $101,500
Feb.99 $75,000 $104,750
Mar.99 $80,000 $105,000
Apr.99 $77,500 $102,000
May.99 $79,000 $110,000
1un.99 $81,000 $115,000
1ul.99 $81,000 $117,500
Aug.99 $80,500 $110,000
Sep.99 $79,000 $113,000
Oc1.99 $85,000 $115,000
Nov.99 $89,500 $117,000
Oec.99 $85,500 $110,500
1an.OO $86,250 $109,000
Source: Economics Research Associates and The California Association of Realtors
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TABLE m-4
San Bernardino County New Home Sales (4th Quarter 2000)
CITY
Chino Hills
Upland
Alia Lorna
Redlands
Rancho Cucamonga
Highland
Yucaipa
Montclair
North Park
Chino
Lorna Linda
Rialto
Colton
Ontario
East Highlands
Grand Terrace
Bloomington
San Bernardino
Fontana
Apple Valley
Victorville
Baldy Mesa
AVERAGE
Average Lot Size (s.r.)
5,080
8,629
12,000
20,887
9,274
12,500
9,340
4,500
7,850
10,000
8,600
6,250
9,780
7,120
8,800
7,200
7,300
9,223
5,983
16,000
6,827
43,560
10,759
Price/s.C.
$121.78
119.61
107.79
103.27
102.44
102.00
10 1.3 7
10 1.16
97.15
96.72
95.80
94.13
92.98
90.87
90.57
87.10
86.51
86.10
83.33
80.54
73.55
71.59
$94.83
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price In the County is approximately $95/sJ. compared to $86/s.f. in the City of San
Bernardino. Note that average new home values in the City of San Bernardino are higher
compared to the communities of Apple Valley, Fontana, Victorville, and Baldy Mesa.
Average new home price in Ontario is approximately $91/sJ., which is also below the
countywide (unweighted) average.
MARKET AREA CHARACTERISTICS
ERA has carried out an analysis of population, income, employment and economic
characteristics in the potential market areas available to the City of San Bernardino from the
perspective land use opportunities, labor pool, and access. The demographic analysis will
discuss a number of critical variables, which will illustrate the type of consumer base that is
present in each one of the market areas. The City will draw from multiple market segments
that will include area residents and area employees.
ERA has delineated three distinct markets based on factors such as competitive
advantages/disadvantages of the location, regional freeway access, potential uses and
available space, and geographic and reputational. The resulting markets are primarily based
on drive times. The area covered by a 0.5 minute drive time from the City Center is defined
as the primary market, a 5-10 minute drive time from the City Center is defined as the
secondary market and a 10-20 minute drive time from the City Center is defined as the
tertiary market. These market areas are illustrated in Figure III-I. It is important to note that
the Market Area estimates are extracted from secondary data provided by CACI Inc., and
there might be dissimilarities of this data to other sources (such as the Dept. of Finance or
SANBAG). As such, direct comparisons of the absolute numbers in these data sets should
not be made to data from other sources. However, these give us a fair estimate of shares,
demographic distribution patterns and short-term growth patterns of the defined markets
relative to the City and the County as a whole.
Economics Research Associates
ERA Project No. 13718
City olSan Bernardino
Page III- 7
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Figure I1I-l
Market Area Definition (Centroid 1-215 and 6th St.)
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Market Area PODulation and Household Characteristics
The population and household characteristics of the area are summarized in Table IlI-
5, and the income characteristics are summarized in Table II1-6. These two tables display the
counts and percentage distribution for the primary, secondary and tertiary markets and the
market area as a whole. These figures can also be compared to the same values for the
County as a whole. A second column shows each of the three market areas and the market
area total expressed as a percentage of the total County value. This allows for the
comparison of the market areas to the conditions in the broader regional context. In the
instances where the variables are expressed as a percentage, the analysis of the market area as
a percent of the County totals can be read like a cross tabulation figure. In other words, the
instances where values are at 100 percent indicate that the characteristic is present at the
same levels that it is throughout the County. Any value above a 100 percent indicates an
over representation and any value below a 100 percent represents an underrepresentation.
.
Total Population: 1999 estimates show that approximately 192,900 people
(192,917) live in the primary market area. This is approximately 11.8 percent of
the total County population, and encompasses almost all of the City of San
Bernardino. The secondary market is estimated to contain approximately 317,900
people (317,992) and the tertiary market is estimated to contain 824,700 people
(824,717). The total market area (all three markets combined) contains almost 1.3
million people (1,335,626), representing an 81.9 percent share of the County
totals. 2004 projections show that the primary market as well as the City will
grow at a slower rate than the region. Compared to the Countywide growth of 7
percent during the 1999-2004 period, the primary market will grow only by 6
percent, while the tertiary market is expected to experience the strongest growth
at 8 percent. Figure IlI-2 illustrates regional population distribution by census
tract. As a result it is expected that the City, the primary market and the
Economics Research Associates
ERA Project No. 13718
City of San Bernardino
Page 1lI.9
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Population Distribution 1999 (1 dot = 100 persons)
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secondary market will all experience slight decline in their relative shares of
countywide population during the 1999-2004 period3.
. Race and Ethnicity: Although the majority of the population across all market
areas is white, the share of white population is lower in the market areas relative
to the countywide average. According to 2000 census, 63.1 percent of the county
population is white, compared to only 53.2 percent of the primary market, 49.4
percent of city, and 63.8 percent of the market area totals. Approximately 51.2
percent of the primary market population are ethnic Hispanic. The primary
market also has a significantly higher share of African Americans, with a 13.8
percent share compared to the countywide average of 7.7 percent. Other than
Asian/Pacific Islanders and Native Americans, the primary market exhibits a
significant overrepresentation of all non-white racial groups, relative to the
County. The City of San Bernardino's racial characteristics are also fairly similar
to the primary market. This is also true for the secondary market, except for a
relatively higher share of Asian/Pacific Islanders. The tertiary market's racial
characteristics are the closest to the countywide profile. However, the tertiary
markets presents a higher than average share of Asians, along with marginally
lower shares of other non-white racial groups. Overall, the total market area
presents a higher than average share of African American, Asian/Pacific Islander,
and Other racial groups, compared to the countywide averages.
.
Total Households: Estimates for 1999 show that the primary market area
contains more than 62,700 households with an average household size of 3.07
persons. The secondary market is estimated to have more than 103,300
households in 1999, with an average of 3.08 persons per household. The tertiary
market is estimated to contain 266,365 households, which yields 3.1 persons per
household. Estimates for 1999 for the total market area show that it contains
3 According to the Census 2000 PL94-171 data released in May 2001, San Bernardino County's population is
1,709,434, and the City of San Bernardino's population is 185,401. During the 1990-2000 period, the county
grew by 20.5 percent, while the City grew by only 12.9 percent. It should also be noted that the combined
Riverside-San Bernardino MSA grew by 25.7 percent during the same period. In fact Riverside County was
one of the fastest growing counties in 1990-2000 period with a 32 percent absolute growth.
Economics Research Associates
ERA Project No. 13718
City oJ San Bernardino
Page m.13
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more than 432,500 households and represents an 80.5 percent share of the County
total.
. Population by Age. Estimates for 1999 show that there is significant over-
representation of three distinct population cohorts in the City of San Bernardino
and the primary market area. These are the 0-17 years, 18-24 years, and the 65+
years age groups. In tenus of absolute share across all market segments including
the County totals, there appears to be a large concentration of teen and pre-teen
age groups (representing 30 to 35 percent of the total), followed by persons aged
18-34 years. Approximately 8 to 10 percent of the total population across all
market segments fall in the 65+ years age cohort.
. Household Income. The estimated 1999 median household income in the
primary market area at $29,767 is considerably lower than the countywide median
of $40,865. The City of San Bernardino's median household income during 1999
is estimated to be $32,573, which is also lower than the countywide figures. The
secondary market has a higher median household income at $39,581 but is still
marginally lower than the countywide averages. The tertiary market's median
household income is 112.5 percent of the countywide median at $45,976,
signifying dispersal of higher income households. It is also important to compare
the median household income to the average income, as the magnitude of positive
or negative differential between the two indicates the skews in the income
distribution pattern. For example a significantly larger average income compared
to the median indicates a positive skew in the income distribution and means that
there are some significantly wealthy households in the area. Households by
income analysis show that there are significantly high proportions of 'very low
income' (<$10,000) households in the primary and secondary market areas as
well as the City of San Bernardino. The tertiary market area is comparable to the
countywide averages in tenus of households by income distribution, and is
positively skewed towards moderate to high-income households.
Economics Research Associates
ERA Project No. 13718
City of San Bernardino
Page 111-14
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CONCLUSION
One of the great strengths that the City of San Bernardino has is the racial and ethnic
diversity found among its residents. San Bernardino represents the core of one of the most
ethnically and racially diverse areas in the entire Inland Empire. In addition, this
community's energy represented by its desire to strive for higher standards of living through
improved employment opportunities is discussed in the section that follows. The
simultaneous challenge is to improve resident labor pool job skills and connect the labor pool
more effectively to evolving new/oncoming job types.
Though it is not the primary objective of this report to specifically analyze residential
land uses, it is evident that the City can encourage the development of a wide range of
housing types catering to existing as well as oncoming population/workforce. However, it is
important to realize that labor markets are usually regional, implying that employees working
in the City may reside elsewhere in the region (but within reasonable commuting distance).
As long as regional jobs to housing balance is met, the need to supply housing types for
'each' employee within the City's jurisdiction becomes a less significant issue.
Economics Research Associates
ERA Project No, 13718
City of San Bernardino
Page III.IS
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Section IV
EMPLOYMENT
INTRODUCTION
The growth of new employment opportunities for the residents of the City of San
Bernardino and the attraction of new commercial and industrial development has been a
central focus of the City's policies through the 1990s. San Bernardino suffered greatly with
the closure of Norton Air Force Base in 1994, and since that time, the City has been looking
for major employers that could offset this loss. This section reviews the employment market
in the City of San Bernardino, and within the Inland Empire, in order to identify key sectors
with potential for employment growth that can be induced to locate and grow within the City
of San Bernardino. This review considers both the labor force, i.e., residents of the City of
San Bernardino regardless of where they are employed, as well as the City's employment
base, i.e., jobs located in the City of San Bernardino. This analysis about employment
potentials informs the discussion of market demand estimates detailed in Section VI of the
report, as well as the goals, objectives, and policies described in Section IX.
REGIONAL EMPLOYMENT GROWTH
Labor Force
Historic employment (by place of residence) trends reported by the California
Employment Development Department (EDD), show that the post recession recovery in the
region started after 1993, and employment growth has been strong ever since. However as
seen in Table IV -1, the City of San Bernardino has been experiencing a slower rate of
employment growth compared to the San Bernardino-Riverside Primary Metropolitan
Statistical Area (PMSA) as a whole. The City also experienced a steady decline in its share
of regional employment between 1990 and 1996. This period can be directly related to the
closure of the Norton Airforce Base in March 1994. Though the base itself displaced
approximately 4000+ military and civilian defense department jobs, numerous other defense
Economics Research Associates
ERA Project No, 13718
City of San Bernardino
Page IV-I
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Table IV-'
Employment Growtb: Riverside San Bernardino PMSA Vs. City orSan lIernardino
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Year
RiversiJe-San
llernarJino PMSA
San llernarJino City as %
City of PMSA
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1990
1991
1992
1993
199-1
1995
1996
1997
1998
1999
2000
CAGR'
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1,128,700
1.113,000
1,12-1,600
1,1-13,300
1,159,500
1,180,800
1,201,900
1,259,000
1,297,300
1,3-19,510
1,-1-1-1,500
2.50%
63,930
62,830
6-1,370
62,870
6-1,230
65,030
66,0-10
68,860
70,950
73,700
78,920
2.13%
5.66%
5.65%
5.72%
5.50%
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5.51%
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civilian employment were also forced to move. Year 2000 estimates show that the City of
San Bernardino has a labor force of 83,960 residents of which 78,920 are employed resulting
in an unemployment rate of approximately 6.9 percent. This is significantly higher than the
year 2000 regional unemployment rate of approximately 4.8 percent. The unemployment
rates may increase somewhat during the current recession now acknowledged to have begun
before September 2001.
Emolovment Base
Table IV-2 displays historical non-fann employment trends in the PM SA by major
industry groups, during the 1990-2000 period. It should be kept in mind that this is
employment by 'place of work'. Historically the region has experienced strongest growth in
the areas of Services and Transportation, Communication and Public Utilities (TCPU) related
employment followed by the Wholesale Trade, Construction and Manufacturing sector. The
Manufacturing sector grew at an average annual rate of 3.8 percent between 1990 and 2000,
while the Finance, Insurance and Real Estate sector grew at an average annual growth rate of
0.4 percent. High growth in Services sector jobs (at 4.5% annually) is a common
phenomenon in all fast growing regions, however it is important to keep in mind that this
sector includes both professional and personal services. Job growth driven by the latter is
often associated with lower skills and consequently lower wages.
Rel!ional Emolovment Proiections
Sectoral employment (by place of work) in the PMSA, as projected by the EDD for
the 1997.2004 period are exhibited in Table IV-3. According to these projections,
construction related employment is expected to experience the strongest growth at a rate of
5.4 percent annually. Transportation, Communications and Public Utilities (+3.9 percent),
Wholesale Trade (+3.7 percent), Services (+3.6 percent), and Manufacturing (+3.3 percent)
will follow this. Increased construction employment is an indicator of related real estate
development, and most growth in this sector is expected to result from new residential .
construction throughout the region. The region will further strengthen its role as the
Economics Research Associates
ERA Project No. 13718
City of San Bernardino
PageIV.3
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Table IV.3
Employment Projections: Riverside San-Bernardino PMSA
MINING
CONSTRUCTION
MANUFAcruRING
TRANSPORTATION & PUBUC UTlUTIES
WHOLESALE TRADE
RETAIL TRADE
FINANCE, INSURANCE & REAL ESTATE
SERVICES
GOVERNMENT
Total Nonfarm Employment
1997
1.200
52,200
104,800
42,500
40,100
177,800
29,800
221,500
171,600
841,500
2004 CAGR'
1,000 -2.6%
75,400 5.4%
131,300 3.3%
55,400 3.9%
51,800 3.7%
202,800 1.9%
33,400 1.6%
284,300 3.6%
198,000 2.1%
1,033,400 3.0%
1019971
_2004
z " z "' "' <l"' tIl
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'CAGR: Compounded Annual Growth Rate
Source: California State Board of Equalization and Economics Research Associates
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transportation/distribution hub of Southern California with continued expansion of rail, road
(trucking), and air transportation facilities, resulting in an increase in Transportation and
Wholesale trade related jobs. Availability of affordable real estate, combined with
transportation amenities, will also strengthen the region's manufacturing and warehousing
base. Demand for services will continue to grow with oncoming residential growth. It
should be kept in mind that construction growth is cyclical and the previously projected surge
could be a short-tenn phenomenon, while the long-tenn regional economic sustainability will
be dependent on pennanent job creating sectors like manufacturing. Also, the quality of
jobs, especially in the services and manufacturing sectors will be key in shaping the longer
tenn economic sustainability of the region.
EMPLOYMENT CLUSTERS
Emolovment. Establishments and Sales
According to 1999 estimates, the City of San Bernardino has a total of approximately
74,100 jobs. As mentioned in the earlier sections, the entire region has gone through an
economic transition during mid-1990s resulting in a regional decline in employment growth
levels. The city of San Bernardino was more severely affected due to the closure of large
defense and defense service related establishments. Though the region has shown a
relatively fast paced recovery from the recession, the City of San Bernardino's recovery has
not been able to keep pace. The City currently has about 13.9 percent.of total countywide
jobs.
In this analysis, ERA used data about employment provided by American Business
Infonnation Service (ABI). Tables IV-4, IV.S and IV-6 present the distribution of
employment, establishments and transaction values (sales) in the city of San Bernardino in
comparison to the county, at the level of the two-digit standard industrial classification (SIC)
codes. The database is tied to census tracts and is primarily based on credit requests and
banking transactions of business establishments during 1999. The data set provides detailed
infonnation on employment, number of establishments and sales, and is the most current data
set available at present. One of the drawbacks of this data set is that it tends to underestimate
Economics Research Associates
ERA Project No. 13718
City of San Bernardino
PageIV.6
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Government and other Public entity related employment as their primary reliance is on
financial transactions to determine employment. In the tables, the sectors that represent a
higher proportion than the City's nominal total share of county employment are highlighted
in red. In order to identify the strengths and weaknesses of the existing employment mix in
the city, it is important to examine this data from a multitude of perspectives, the primary
being:
.
Absolute employment shares by sector. Existence of large volumes of jobs in a
few distinct sectors could indicate economic opportunities, but they could also
translate into vulnerability.
.
Share of regional employment. Regional employment shares are often better
indicators of clustering as they relate the absolute employment numbers to the
regional context. An examination of both the absolute numbers as well as their
regional shares provide a much clearer picture.
.
Establishments and sales transactions. A large number of employees in a
particular sector distributed among a few establishments could mean that one is
vulnerable to the economic cycles of that particular sector. While the same
number of employees distributed among a larger set of establishments might
indicate the emergence of a cluster. It is also important to connect all of the
above relationships to sales and transaction values generated by each sector, in
order to better understand the economic value of each.
Closer observation of the employment, sales, and establishments data reveal about
eight to ten distinct concentrations of employment types in the City of San Bernardino.
Some of the sectors, which exhibit consistent strengths across all categories, are as follows:
Economics Research Associates
ERA Project No. 13718
City of San Bernardino
Page IV-I0
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Table IV- 7
Employment Clusters in the City of San Bernardino
Employment
Number Share
Health Services 9,771 13%
Educational Services 8,498 11 %
Public Administration 7,510 10%
Real Estate 2,251 3%
Business Services 2,084 3%
Special Trade Contractors 1,633 2%
Printing & Publishing 1,536 2%
Legal Services 1,112 2%
TOTAL 34,395 46%
Source: Economics Research Associates
Sales
S Mil. Share
1,122 15%
790 10%
0%
4%
3%
3%
1%
3%
39%
342
259
224
82
198
3,017
Establishments
Number Share
467 8.1 %
137 2.4%
224 3.9%
280 4.9%
266 4.6%
207 3.6%
62 1.1 %
187 3.3%
1,830 32%
Share of
County
17%
19%
29%
18%
10%
10%
28%
36%
The eight sectors listed m Table IV-7 account for 46 percent of the City's
employment, 39 percent of the City's business volume and 32 percent of Its establishments.
The top three sectors, namely, Health Services, Educational Services and Public
Administration account for almost 24 percent of all citywide employment, 25 percent of all
citywide sales and more than 14 percent of all establishments. These three sectors also
represent 17, 19 and 29 percent of sectorwide employment in the county respectively. In
addition, there are some emerging sectors showing signs of clustering, as well as certain
sectors showing employment stability over time. A good example of the latter is the
Transportation, Communication and Public Utilities (TCPU) sector, which will continue to
be one of the City's stable employers, especially in tenns of location advantages in rail
transportation (both for freight and increasingly for local passenger transport through the
expansion of Metrolink)l. Printing and Publishing appears to be a strong sector in tenns of
their employment base with 1,500+ employees in 82 establishments. Printing and Publishing
employment in the City accounts for 28 percent of sector-wide employment in the County.
As the top two sectors (in tenns of employment volume), Health and Educational
Services, fall under the Services sector in general, it is not surprising to see that the services
sector accounts for most jobs in the city, with almost 42 percent of the total. The large
concentration of health services jobs could be accounted for by the concentration of several
1 Note that the SIC data shows minimal employment in Rail Transportation. However, ERA believes this to be
a methodological error inherent to the data.
Economics Research Associates
ERA Project No. 13718
City of San Bernardino
PageIV-ll
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health related establishments in and around the City, including the fairly large San
Bernardino County Hospital, the St. Bernardine Medical Center, the nearby Patton State
Hospital and the medical teaching facilities in Lorna Linda. Similarly educational services
employment concentrations are due to the presence of the California State University
Campus, the large community college district and the school district. The presence of a large
number of Federal, State and County facilities in the City accounts for the large
concentration of Public Administration jobs. This also results in the clustering of legal
service jobs as is evident from the data shown above.
SDatial Distribution of Kev EmDlovment Tv Des
The above sections examined San Bernardino's employment characteristics in terms
of its quantitative characteristics. It is also important to look into the spatial distribution of
employment in order to better understand the relationships between location, transportation
and regional adjacencies. ERA has put together a series of thematic maps to help analyze
San Bernardino's employment geography.
Figure IV-1 presents overall employment distribution in southwest San Bernardino
County and parts of northwest Riverside County. The map clearly shows three distinct
employment centers in the area, namely:
1. The City of San Bernardino
2. The City of Riverside
3. The City of Ontario
In addition, there exists some 'secondary' clusters of employment in the Redlands
and Moreno Valley areas. It is evident that there is a propensity of employment
concentrations along the Interstate 215 on the north-south axis and along the Interstate 10 on
the east west axis. In view of these observations, the following are some relevant issues
pertaining to regional employment distribution:
Economics Research Associates
ERA Project No. 13718
City of San Bernardino
Page IV.12
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Figure IV-I
Employment Distribution 1999 (1 dot = 100 persons)
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Ontario has grown rapidly, and will continue to grow in the near future as a
primary employment core in the San Bernardino-Riverside region. Transportation
connections by air and land, residential development resulting from recent and
oncoming annexations to the south (dairy conversions), and the availability of
large yet affordable floor spaces are some of Ontario's key competitive
advantages.
.
Riverside also has similar advantages combined with the presence of a major
research university, making it far more attractive to higher value employers.
.
Rapid residential growth that will continue in the region, especially in the eastern
and the 'High-Desert' communities (Victorville, Hesperia, Apple Valley), will
also continue to increase the demand for numerous service-related jobs. Though a
lot of these jobs might not be in the high wage brackets, they will push up the
volume of employment as well as (smaller) business establishments in absolute
terms. A large part of the employment clusters visible in the Redlands and
Moreno Valley areas are in fact due to increasing numbers of service jobs.
ERA has also analyzed certain key employment sectors, which have traditionally
clustered in San Bernardino, and could present opportunities for sustained employment
growth and stability in the City. The spatial distributions of these sectors are presented in
Figure IV-2 through Figure IV-7.
Non-Durable Goods Manufacturing. This category includes Food and Kindred
products, Textiles, Apparel, Chemicals and Allied products, Paper and Printing
products. Typically a large share of these establishments, especially perishables
like food, tend to serve the larger regional market. As seen in Figure IV-2, most
of the non-durable goods manufacturing establishments are located towards the
central and southern parts of the City, providing easy access to the Interstate 215
and the Interstate 10. Competing locations are in Ontario and Riverside. The
City exhibits significantly high concentrations of Printing and Publishing
establishments compared to the region as a whole. Though the primary reason
City of San Bernardino
Page IV-14
Economics Research Associates
ERA Project No. 13718
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Figure IV-2
Non-Durable Manufacturing Establishments
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behind this would be to service the cluster of nUmerous government offices, this
sector could provide opportunities for expansion.
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Road and Rail Transportation. Figure IV-3 presents the distribution of road and
rail transportation establishments in the region. Considering the location of a
major airport and good regional freeway access, it is not surprising to see high
concentrations of trucking and warehousing establishments in Fontana and
Ontario. Besides a major rail yard, the City of San Bernardino shows a higher
concentration of Local and Interurban Passenger Transit related establishments
compared to the region. This is attributed not only to Metrolink, but also to
numerous other private transportation services that are located in the City. It is
important to note that the existing rail infrastructure is extremely important for
San Bernardino's 'local' economy. This is not because of the direct employment
that rail may generate, but the indirect employment that it can potentially generate
by attracting other employers to the City (by being a valued transportation
amenity).
.
Finance, Insurance and Real Estate. As shown in Figure IV-4, the cities of San
Bernardino and Riverside have the highest concentration of Finance, Insurance
and Real Estate related establishments. Once again in the case of San Bernardino,
this phenomenon could be attributed to the demand for these services generated
by the cluster of government administrative offices, and their many employees. It
should also be noted that a large number of establishments in this sector are
comprised of smaller real estate offices that have located in the region to service
the tremendous growth of new residential development.
.
Health Services. Figure IV -5 presents the distribution of Health Service
establishments in the region. As mentioned earlier, the City has a strong share of
Health Service establishments due to presence of a number of large and quality
health care centers. Lorna Linda and Fontana also exhibit similar characteristics.
Economics Research Associates
ERA Project No. 13718
City of San Bernardino
Page IV-16
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Figure IV-3
Transportation Related Establishments
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Considering the projected residential growth in the region, there could be a
significant rise in the demand for healthcare and related services, and
opportunities exist for San Bernardino to capitalize on its existing clusters.
.
Educational Services. The Educational Service cluster in San Bernardino is
driven by the location of educational institutions at four hierarchical levels; a state
university, a cluster of proprietary education and training institutions, a large
community college district, and a fairly large school district. As seen in Figure
IV -6, the Cities of San Bernardino and Riverside have the largest share of
Educational Services in the region. This cluster should be viewed as a prime asset
for the City. Partnerships and alliances across the sector, as well as between the
various educational establishments and potential employers, could be a key
economic development tool for the City.
.
Public Administration. As seen in Figure IV-7, San Bernardino has the largest
concentration of Public Administration establishments, compared to any other
community in the region. These are comprised of a number of Federal, State as
well as County offices. It is clear from some of the above observations that some
of the other important industry clusters in the City are driven by these offices, and
hence the retention of these offices are important to the City (at least in the short
term). Once again alliances and partnerships will be extremely important.
REGIONAL SHIFf.SHARE ANALYSIS
ERA carried out a simple Shift-Share analysis of employment growth in San
Bernardino County compared to the five county2 region of Southern California, during the'
1997-2004 period, based on projections by the California EDD. The results of the analysis
are presented in Table IV -8. The results of this analysis pinpoint important differences
between the industry composition of employment growth in San Bernardino County versus
growth in the region at large.
2 Los Angeles, Orange, Ventura, San Bernardino and Riverside.
Economics Research Associates
ERA Project No. 13718
City of San Bernardino
Page IV -20
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Figure IV-6
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San Bernardino County is expected to grow at a faster rate in terms of overall
absolute employment compared to the five county region (during the analysis period).
However, a few key findings of the shift-share analysis indicate that there are some
significant differences in the patterns of growth in the county and the region. These are listed
as follows:
.
Overall standardized growth in the county at 14.4 percent is marginally lower
than the overall growth in the region at 14.6 percent. This indicates that the mix
of industries in the county is slightly tilted towards slower growing industries
compared to the region as a whole.
.
The above observation is further clarified by examining the 'shift-share'
components in the second table. It is seen that the county has a negative overall
'industry mix' effect. This means that the industry composition employment for
San Bernardino County is tilted towards slower growing industries (compared to
the region). Other than the Construction, Services and Transportation and Public
Utilities sectors, all of the industries in the county have a negative industry mix
effect.
The 'regional-shift' effect computed the gain or loss in local employment from an
industry growing faster or slower than its regional counterpart. All of the sectors
other than Finance, Insurance and Real Estate will experience faster growth than
their regional counterparts. In summary, San Bernardino County will experience
fairly positive employment growth during the 1997-2004 period, compared to the
region as a whole. However, a large proportion of the county's employment
growth will be in sectors that are typically 'slow growing' in the region as a
whole. The county's share of Finance, Insurance and Real estate employment is
expected to decline over the period.
City of San Bernardino
Page IV -24
Economics Research Associates
ERA Project No. 13718
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CONCLUSIONS
It is evident that the City of San Bernardino's decreasing share of regional
employment can be attributed, for the most part, to its eroding competitive position in the
region. The increasing strength of Ontario, in terms of transportation connections and readily
available floor space, as well as the competitive labor force and amenity advantages available
in Riverside, make both these communities strong competitors of San Bernardino. In
addition, San Bernardino has undergone a relatively tough transition in recovering from the
last recession due to the closure of Norton Air Force Base, which was a major economic
engine for the city, especially in terms of creating high value civilian jobs through defense
contracts. However, it would be wrong to say that opportunities are limited for the future.
The City has the potential for retaining and expanding certain key employment sectors that
have traditionally located here. A lot of this would depend on not only the identification of
these potentially strong sectors, but also in a proactive program to attract and retain
employment through partnerships, alliance and marketing efforts. Some of these existing and
expanding sectors could be:
1. Light industrial and manufacturing, especially in terms of non-durable goods and
services. The city could build on the existing Printing and Publishing Sector.
Market opportunities for full service publishing facilities that include both design
and production should be explored. Opportunities also exist in apparel
(production) and specialty food (preparation/packaging) sectors. These
opportunities are not limited to low-skill employment, but could be in the form of
a range of high value products and services.
2. The Health Services cluster that has a larger proportion of high value jobs
provides tremendous opportunities. These may also be opportunities for linkages
with the adjacent Lorna Linda teaching and research hospital/medical cluster.
3. Partnerships and alliances with the Educational Services sector will be very
important in not only creating technical skill increments in a more competitive
labor pool, but also in providing a regional educational opportunity amenity.
Economics Research Associates
ERA Project No, 13718
City of San Bernardino
Page IV -25
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4. Transportation is emerging as a core employment sector in the region and
opportunities exist for continued capture of Transportation related jobs (both in
terms of goods and passenger transportation).
5. The City should continue to work closely with the Inland Valley Development
Agency (IVDA) and San Bernardino International Airport Authority (SBIAA) in
order to preserve the airport facility and aggressively promote commercial/
industrial land uses around it. It is important to note that SBIA is an asset and
losing the potential future airport usage (international trade and cargo,
commercial flights) and FAA air traffic pathways will be an irreversible process.
ERA understands that developers have expressed interest in eliminating the
facility and expanding the rail infrastructure. It is desirable that any expansion of
rail infrastructure attempts to integrate itself with the airport, rather than replacing
it.
6. It is important to retain the existing cluster of government offices, as they provide
a sustained demand for business and professional services in the City. However,
caution should be taken at the potential risks posed by relocation and downsizing
of certain administrative sectors.
7. Call Centers and other services not dependent on product delivery will need a low
cost environment and diverse (including multi-lingual) labor force.
8. Opportunities for Wholesale Trade related uses with frontage to the Interstate-2IS
should be explored.
Economics Research Associates
ERA Project No. 13718
City of San Bernardino
Page IV -26
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Section V
REAL ESTATE MARKET
INTRODUCTION
This section will review the current state of the real estate market in the City of San
Bernardino and in the environment in which the City competes, and the Inland Empire as a
whole. This section will focus on the most immediate near-term trends in the real estate
market, but it should be understood that the Inland Empire as a whole has undergone a
tremendous transformation over the last 15 to 20 years, and has become a major industrial
center for Southern California. Much of this new commercial development has been located
in the City of Ontario east of the City of San Bernardino, along the 1-10 freeway, particularly
around the Ontario International Airport. Also, in late 2001, it is now probable that major
industrial/commercial development will commence at San Bernardino International Airport
(former Norton AFB).
The rate of growth has been so dramatic that in many respects the 1-10 corridor and
airport corridor of the Inland Empire can be seen as mature markets with many of the best
developable sites having been taken. As a result, industrial development is seeking locations
farther afield in the high desert in locations such as Hesperia and elsewhere in the Victor
Valley. San Bernardino is strategically placed to take advantage of these market conditions
with the City's access to the 1-10, 1-215, and I-IS freeways. This will improve further by
2006 when the I-21O/Route 301I-215 connections are finally completed. In the near term,
San Bernardino will increasingly be a site of interest for new commercial and industrial
development along these corridors. This section will examine trends in the Inland Empire's
real estate market with a focus on the City of San Bernardino including the following
commercial land uses:
. Office
. Industrial
. Retail
. Hotel
Economics Research Associates
ERA Project No, 13718
City of San Bernardino
Page V-I
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OFFICE MARKET TRENDS
It is only in the past four to five years that the Inland Empire has started to emerge as
an attractive location for office development. Historically, office development in the region
was concentrated around the Ontario core, and typical leases were always embellished with a
multitude of concessions to sustain demand.
As seen in the previous sections, the primary force behind the region's growth has
been strong residential development cycles driven by affordability advantages relative to Los
Angeles and Orange Counties. This was followed by a gradual expansion of supporting
retail and service establishments that were developed primarily to serve the growing local
market.
As the more mature office markets in Los Angeles and Orange counties have
continued to lease space at record levels, tenant interest in the Inland Empire has been
growing. Initial increased demand in the west and southwest end of the San Bernardino
Riverside County area is expected to move gradually to the east. It is important to note that
the increasing value of office locations in the Inland Empire is not merely due to cost
pressures from the west. There have also been a number of internal catalysts that continue to
add value to office locations in the region. These include:
. Continuing expansion of passenger traffic in the Ontario International Airport
makes the area more attractive for offices which generate and attract business
travel. The airport is currently served by 11 major airlines and connects every
major city in the nation. 1999 passenger traffic of 6.5 million people made
Ontario one of the busiest hundred airports in the world and one of the fastest
growing in the nation. The airport opened its 530,000 square foot expansion of
the passenger terminal in 1998. Passenger traffic in the airport may cross the 8.5
million mark this year, 2001, despite the economic slowdown and the events of
September 11, 2001.
. A wider range of residential products in the region that are of increasingly higher
quality and yet remain affordable acts as a magnet for a competitive labor force.
Economics Research Associates
ERA Project No. 13718
City of San Bernardino
Page V-2
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. An improving network of freeways is making in-commuting an easier task. The
toll road (231) and the 71 freeway (connecting the 91 and the 60) provide easy
access from west and south Orange County into the Inland Empire. The Foothill
Freeway will be completed within 5 years to connections in San Bernardino, and
will connect with the 1-15 by October 2002 from the west.
Over the past year and a half, the core airport market has shown some signs of
maturity. Office tenant concession lists are becoming shorter and lease rates have been going
up. This has also triggered a series of speculative development projects outside this core
market area. While these are signs of overall market maturity, office development in the
Inland Empire is not entirely without risks. It should be kept in mind that one of the major
forces behind this growth is cost pressures from the west (though it is not the only one), and
one can expect the Inland Empire market to be fairly sensitive to market slowdowns in Los
Angeles and Orange Counties. This will be especially true if the large volumes of oncoming
speculative developments are not absorbed. With the recent tech-bust and a falling stock
market, it is extremely important to recognize these risks in the near term.
As seen in Table V-I, the Inland Empire market has added approximately 1.48
million square feet of space during 1995-2000, to reach a rentable inventory of
approximately 13.5 million square feet as of the third quarter of 2000. Of this approximately
3.7 million square feet are located in the San Bernardino area, which also includes the
communities of Colton, Redlands and Lorna Linda. Vacancy rates in the region have fallen
from a staggering 21.1 percent in 1995, to 14.4 percent in 2000. Vacancy rates in the San
Bernardino area are marginally lower than the regional averages. The other large
concentrations of office space are located in the Riverside (Riverside, Moreno Valley
Corona) and Airport (Ontario, Rancho Cucamonga, Fontana) submarkets. While the former
has a 2000 (Q3) vacancy rate of 18.5 percent, the latter has a vacancy rate of only 13.4
percent.
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Economics Research Associates
ERA Project No. 13718
City of San Bernardino
Page V.3
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Table V -2 shows net absorption, average rents and space under construction in the
various Inland Empire submarkets. Net absorption in the market has been increasing steadily
since 1996. As of the third quarter of 2000 (year to date), the San Bernardino submarket had
absorbed 268,000 square feet and the Riverside submarket had absorbed 172,000 square feet.
These two markets accounted for 80 percent of office space absorption in the region, up to
the third quarter of 2000. Average rents have also been increasing steadily since 1996.
Average asking rents in the region is approximately $1.45 per square foot per month as of the
third quarter of 2000, compared to approximately $1.42 per square foot in the San
Bernardino submarket. Average asking rents in the region had risen to $1.70 per square foot
at the end of 2000.
Table V -3 and Table V -4 show the distribution of office space by building class and
building type as of the third quarter of 2000. The largest share of the San Bernardino office
inventory is Class B space with approximately 42 percent, followed by Class A space with a
36 percent share. The remaining 22 percent of the inventory is comprised of Class C space.
However, 65 percent of new space absorbed in the San Bernardino submarket falls in the
Class A category. Approximately 84 percent of the submarket is comprised of 20,000+
square foot space, and approximately 84 percent of all new space is absorbed by this type of
property. These patterns are fairly consistent with the region-wide distribution of class and
type.
Table V -5 presents an inventory of major multitenant office properties located in the
City of San Bernardino. The approximate volume of multi-tenant space located in the city is
3.03 million square feet. This does not include single use governmental space. About
551,300 square feet of this total is vacant resulting in an overall vacancy rate of 18.2 percent.
Average lease rate derived from this data set is approximately $14.18per square foot per year
or $1.18 per square foot per month, full service. Note that this list is not all-inclusive.
Table V -6 presents a sample of office properties in San Bernardino that have recently
been available for lease. Table V -7 lists some of the major oncoming office developments in
the Inland Empire Market. Table V -8 presents a list of recent office property sales in the
Economics Research Associates
ERA Project No. 13718
City of San Bernardino
Page V.5
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Table V-6
City of San Bernardino: Recent Office Building for Lease Listings
I
Building Name
Brier Corporate Center Office Buildings
NEC Building
Hospitality Plaza
Highland Commons
HDS Plaza
Exchange Place
Fairway Commerce Center
Address
860 Brier SlIee & 834 Hardt Street
825 E. Hospitality Lane
164 W. Hospitality Lane
2210 Highland Avenue
268 Hospitality Lane
1845 South Business Center Drive
1535 South
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No. of
Floors
4
2
2
Available
Sq.FL
51,000
32,000
22,000
16,742
14,166
2,294
1,916
Building
Sq.FL
25,514
32,000
52,000
16,742
104,178
83,874
18,000
Rent per
Sq.FL
S1.40-1.45
SO.85
S1.20-1.35
S0.50
S1.45
S9.00
S1.10
I
Source: Loopnet.com and Economics Research Associates
Table V-7
Inland Empire Office Market: Selected Oncoming Developments
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Project
North Main St. Plaza
Corona Corp. Center 1 & II
California Ave.
Ontario Center
Fairway Business Park
Springs Gateway II
Location
Corona
Corona
Corona
Ontario
Rancho Cucamonga
Riverside
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Size (s.f.)
70,000
120,000
85,000
72,000
90,000
18,500
Type
Class A
Class A
Class A
Class A
Class A
Class A
Status
Pre-Leasing
Pre-Leasing
Pre-Leasing
Pre-Leasing
Pre-Leasing
Source: Grubb and Ellis and Economics Research Associates
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C Table V-II
I City of San Bernardino: Recent Office Property Sales
Recording Date Property Description Sale Price Square Ft. Pricel SF Year Built
I CitylZip
12/22/99 Multi Tenant Low Rise(1 - 3 sty) $5,500,000 63,834 $86.16 1986
San Bemardino92408
I 6/8/00 Mid Rise (4 - 8 sty) $1,600,000 38,000 $42.11 1967
San Bemardino9240 1
11112/99 Multi Tenant Low Rise(1 - 3 sty) $900,000 8,800 $102.27 1997
I Big Bear Lake92315
2/24/99 Mid Rise (4 - 8 sty) $780,000 33,500 $23.28 1970
San Bemardino92401
6/25/99 Single Tenant Low Rise $700,000 14,070 $49.75 1980
I San Bemardino92408
5/4/00 Multi Tenant Low Rise(1 - 3 sty) $600,000 20,000 $30.00 1966
San Bemardino92401
I 10/1/99 MedicallDental Office $420,000 5,336 $78.71 1984
San Bemardino92401
3/1/00 Lodge/Meeting Hall $380,000 35,370 $10.74 N/Av
I San Bemardino9240 1
8/10/99 Single Tenant Low Rise $290,000 1,664 $174.28 1989
,. Highland92346
I 4/28/00 Single Tenant Low Rise $275,000 11,992 $22.93 1989
San Bemardino92408
11/24/99 MedicallDental Office $235,000 13,793 $17.04 1965
San Bemardino92404
I 6/23/00 Single Tenant Low Rise $175,000 3,488 $50.17 1970
San Bemardino92405
6/22/00 Single Tenant Low Rise $160,000 1,710 $93.57 N/Av
I San Bemardino92408
12123199 Single Tenant Low Rise $155,000 4,432 $34.97 1985
Yucca Valley92284
I 3/11199 Single Tenant Low Rise $150,000 4,197 $35.74 N/Av
San Bemardino92401
7/16/99 Multi Tenant Low Rise(l - 3 sty) $150,000 10,094 $14.86 1960
g San Bemardino92405
12/9/99 Multi Tenant Low Rise(1 - 3 sty) $150,000 3,000 $50.00 1985
Yucca Valley92284
I Average $742,353 16,075 $54
Source: eComps and Economics Research Associates
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City of San Bernardino. Most of the recorded sales are of properties older than 15 years.
Sale prices have varied from the $11 to $94 per square foot, with an average of
approximately $43 per square foot. The range of prices and sizes are fairly wide, but only a
few properties are more than 20,000 square feet.
INDUSTRIAL MARKET
The Inland Empire has been a top industrial location for a number of years due to a
combination of location advantages that include the following:
.
Interstate 10, 15, and Highway 60 provide east-west access. The new Route 71
connecting the 60 and 91 freeways continues to expand market access to the south
and west. The construction of the new Eastern Corridor toll road linking Corona
and Irvine will further improve connections with Orange County.
.
There are 10 major truck terminals located in the market, with more than 80
contract and independent trucking firms. The San Bernardino Valley is
essentially a transcontinental trucking hub.
.
The San Bernardino/Riverside area provides access to one of the largest markets
in the nation. Approximately 47 percent of California's 34+ million population is
within an hour from here.
.
And there is still available land in the region that is also at fairly competitive
prices relative to other markets.
.
Both the Union Pacific and Santa Fe railroad lines serve the Inland Empire.
Union Pacific's Colton Yard is considered to be one of the most technologically
advanced freight terminals in the world.
.
Excellent air cargo services in the Ontario International Airport are a big plus for
potential manufacturers and distributors. Ontario has handled more freight in the
last two years than the previous twenty years combined. UPS has a $53 million
sorting facility at the airport.
Economics Research Associates
ERA Project No. 13718
City of San Bernardino
Page V-13
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. The region is home to the second largest international airport in the greater Los
Angeles region, two transcontinental railroads, three interstate highways (1-10, 1-
15, 1-215), a foreign trade zone, enterprise zone, and is near the two adjacent
largest harbors on the west coast.
Table V -9 presents a snapshot of the Inland Empire industrial market as of the third
quarter of 2000. The total regional market inventory is approximately 215.9 million square
feet, of which approximately 92.9 million or 43 percent is located in the Ontario/Mira Lorna
submarket. The San BernardinolRedlands submarket contains approximately 11.8 million
square feet or approximately 5 percent of the regional total. Of this approximately 9.5
million square feet are located in the City of San Bernardino. The 6.0 percent industrial
vacancy in the submarket is lower than the regional average of 7.1 percent. Vacancy rates in
the City are even lower at close to 4.8 percent. But lease rates in this submarket are
approximately $3.56 per square foot per year (NNN) and are slightly lower than the regional
average $3.83 per square foot per year (NNN). Comparatively, Corona and Chino have the
highest lease rates at $4.50 per square foot per year and $4.22 per square foot per year,
respectively. Almost 60 percent of all new construction are concentrated in the Ontario/Mira
Lorna and Chino submarkets.
Table V -10 presents the characteristics of available (vacant) industrial space located
in the City of San Bernardino as of the third quarter of 2000. About 40 percent of the
existing leasable industrial space in the city is in the 100,000- to 149,999 square foot range,
about 22 percent are in the 25,000- to 49,999 square foot range, and about 19 percent are in
the 10,000- to 24,999 square foot range.
A majority of the new industrial product built in the Inland Empire during the year
2000 is comprised of speculative projects, which account for about 63 percent of total new
buildings. 24 percent of all new construction is comprised of Build-to-Suits and the
remainder is owner built. Almost all the submarkets have some construction activity going
on, and pre-leasing activity has been vigorous. Table V -11 shows total pre-leasing activity in
Economics Research Associates
ERA Project No. 13718
City of San Bernardino
Page V-14
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Table V-IO
I San Bernardino Industrial Market Overview (3rd Quarter 2000)
Available Available Total Leasing Sales Total Act. Total Act. Total Act.
Size Range Dinct Sublease Inventory No. Activitv Activity 3Qoo YTD Prev. Yr.
. .
I 5,000.9,999 sq. It
Existing 19,418 19,418 3 5,400 5,400 10,640 28,800
Under Const.
Planned
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Existing 91,551 91,551 6 19,375 45,243 64,618 103,458 265,621
Under Canst.
Planned 20.856 20.856 2
I 25,000-49,999 sq. ft.
Existing 101,795 101,795 5 36,619 36,619 155,199
Under Const.
Planned 100,937 100,937 3
I 50,000-74,999 sq. II.
Existing 55,000 55,000 65,654 65,654 124,124 58,000
Under Canst.
I Planned
75,000.99,999 sq. ft.
Existing
Under Const. 28,000 28,000
I Planned
100,000.149,999 sq. fl.
Existing 188,904 188,904 2 107,320 101,250
Under Const.
I Planned 106,140 106,140
150,000.249,999 sq. fl.
Existing 235,000
Under Const.
~ Planned
250,000-349.999 sq. fl.
Existing
Under Const.
I Planned 275,000 275,000
350,000+ sq. fl.
Existing
Under Canst.
I Planned 1,017,100 1.017.100
Total
Existing 456,668 456,668 17 127,048 45,243 172,291 735,741 453,671
Under CODsL 28,000 28,000 1
I PlaoDed 1,520,033 1,520,033 8
Source: Grubb & Ellis and Economics Research Associates
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the Inland Empire as of the 3,d quarter of 2000. Close to 6 million square feet were pre-
leased in 24 different properties and about 40 percent of the new tenants were from outside
the Inland Empire.
Table V -12 presents a sample of industrial properties in San Bernardino that are
currently available for lease. Table V -13 lists recent industrial property sales in the City of
San Bernardino. Most of the recorded sales are of properties older than 10 years. The
average property size is 28,000 square feet and the average sales price is approximately $50
per square foot. Most of the recorded sales are of single tenant industrial properties.
RETAIL MARKET
Taxable Retail Sales Trends
Table V-14 presents taxable sales in the City of San Bernardino during the 1990-1999
(latest full year available) period, in constant 2000 dollars. The total taxable sales in the City
during 1990 was $2.5 billion of which approximately $2.0 billion was from retail sales. The
strongest retail categories in 1990 were General Merchandise and Auto Dealers. Between
1990 and 1993, retail sales in San Bernardino experienced a steep drop. Total taxable sales in
1993 fell to $1.9 billion (-$0.6 billion) and retail store sales fell to approximately $1.6 billion
(-$0.4 billion). The sectors that were hardest hit were the very ones that were traditionally
considered the strongest. The big losers included Home Furnishings and Appliances (-36
percent), Apparel Stores (-28 percent), food stores (-25 percent), General Merchandise stores
(-21 percent), and Auto Dealers (-20 percent). This period also coincides with the closure of
Norton Air Force base and subsequent loss of a large share of the City's employment base.
While the base closure might not be the only reason behind the City's falling retail activity,
the loss of a large disposable income base certainly did not help. Increasing retail
competition from the newer regional centers (Ontario Mills etc.) have also continually eroded
San Bernardino's regional retail market base. Taxable sales growth remained relatively flat
between 1993 and 1997 and was accompanied by marginal losses across all sectors. Overall
taxable sales has grown at an average annual rate of 4.3 percent since 1996, but has still not.
Economics Research Associates
ERA Project No. 13718
City of San Bernardino
Page V-18
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Table V-13
I CITY OF SAN BERNARDINO: RECENT INDUSTRIAL BUILD LING SALES
Recording Date Property Description Sale Price Square Ft. Pricel SF Year Built
I CitylZip
Single Tenant Industrial Building
5/16/00 San Bernardino92408 $ 3,760,000 235,000 $ 16.00 1978
I Multi-Tenant Industrial Building
9/15/00 San Bernardino92408 $ 3,069,000 70,145 $ 43.75 1990
Single Tenant Industrial Building
I 9/2/99 San Bernardino92407 $ 3,000,000 35,760 $ 83.89 1990
WarehouselDistribution
5/5/00 San Bernardino92408 $ 2,910,000 107,320 $ 27.12 1981
I WarehouselDistribution
5/28/99 San Bernardino92407 $ 2,350,000 68,500 $ 34.31 1990
Single Tenant Industrial Building
I 513/00 San Bernardino92408 $ 2,079,000 59,400 $ 35.00 . 1986
Industrial Park
2/26/99 San Bernardino92408 $ 1,825,000 74,502 $ 24.50 1986
I WarehouselDistribution
1/14/00 San Bernardino9241O $ 1,725,000 58,470 $ 29.50 1963
Single Tenant Industrial Building
I 6/30/00 San Bernardino92408 $ 1,400,000 47,957 $ 29.19 1975
Single Tenant Industrial Building
1/28/00 San Bernardino92408 $ 1,115,000 41,633 $ 26.78 1980
I Single Tenant Industrial Building
4/30/99 San Bernardino9241O $ 725,000 28,324 $ 25.60 1969
Radio Transmission Facilities
I 3/26/99 San Bernardino9241O $ 700,000 1,531 $ 457.22 N/Av
Multi-Tenant Industrial Building
10125/99 San Bernardino92401 $ 600,000 64,654 $ 9.28 N/Av
I Single Tenant Industrial Building
7121/00 San Bernardino92408 $ 550,000 16,880 $ 32.58 1985
Single Tenant Industrial Building
4/13/00 San Bernardino9240l $ 540,000 16,750 $ 32.24 1987
I Auto Salvage Yard
2[7/00 San Bernardino92410 $ 500,000 5,000 $ 100.00 N/Av
I Multi-Tenant Industrial Building
6/16/00 San Bernardino9240l $ 482,500 15,080 $ 32.00 N/Av
Single Tenant Industrial Building
4/9/99 San Bernardino9241O $ 460,000 19,802 $ 23.23 1984
I Single Tenant Industrial Building
2/16/00 San Bernardino92408 $ 460,000 12,600 $ 36.51 1951
Single Tenant Industrial Building
i 1213/99 San Bernardino9241O $ 450,000 13,400 $ 33.58 N/Av
Multi-Tenant Industrial Building
9/15/00 San Bernardino92408 $ 450,000 11,583 $ 38.85 1990
I Multi-Tenant Industrial Building
3/16/99 San Bernardino9241O $ 425,000 22,000 $ 19.32 1993
WarehouselDistribution
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Recording Date Property Description Sale Price Square FL Pricel SF Year Built
I CitylZip
10129199 San Bemardino92408 $ 422,100 12,600 $ 33.50 N/Av
Single Tenant Industrial Building
I 8/6/99 San Bemardino92408 $ 415,000 8,000 $ 51.88 N/Av
Multi-Tenant Industrial Building
7127/00 San Bemardino92410 $ 415,000 16,660 $ 24.91 1950
I Single Tenant Industrial Building
12/13/99 San Bemardino92408 $ 380,000 5,977 $ 63.58 1989
Single Tenant Industrial Building
I 9/8/99 San Bemardino9241O $ 366,500 16,000 $ 22.91 1947
Single Tenant Industrial Building
3113/00 San Bemardino92407 $ 360,000 15,000 $ 24.00 1980
I Towing & Storage Yard
1/12/99 San Bemardino92408 $ 350,000 2,023 $ 173.01 N/Av
Single Tenant Industrial Building
i 8n/00 San Bemardino92407 $ 350,000 6,000 $ 58.33 N/Av
Single Tenant Industrial Building
3/31/99 San Bemardino92408 $ 325,000 5,000 $ 65.00 1980
I Single Tenant Industrial Building
7/9/99 San Bemardino92410 $ 287,500 19,375 $ 14.84 1943
Single Tenant Industrial Building
7127/00 San Bemardino92408 $ 262,000 5,600 $ 46.79 1961
I Single Tenant Industrial Building
12/17/99 San Bemardino92408 $ 250,000 7,090 $ 35.26 1986
Single Tenant Industrial Building
I 5/16100 San Bemardino9241O $ 250,000 6,640 $ 37.65 1962
Single Tenant Industrial Building
4/11100 San Bemardino92410 $ 245,000 12,510 $ 19.58 1965
I Single Tenant Industrial Building
9/8/99 San Bemardino9241O $ 200,000 10,531 $ 18.99 1989
Single Tenant Industrial Building
I 4/27/99 San Bemardino92405 $ 182,000 4,042 $ 45.03 N/Av
Single Tenant Industrial Building
2/19/99 San Bemardino92408 $ 174,000 3,324 $ 52.35 1985
I Single Tenant Industrial Building
4130/99 San Bemardino92408 $ 165,000 8,413 $ 19.61 N/Av
2 Single Tenant Industrial Bldgs
I 3/8/99 San Bemardino92407 $ 150,000 4,000 $ 37.50 1945
Single Tenant Industrial Building
8/31/99 San Bemardino9241O $ 150,000 5,884 $ 25.49 1962
I Warehouse/Distribution
3/31/00 San Bemardino92410 N/Av N/Av N/Av 1988
Average $ 840,000 29,000 $ 49,06
i Source: Economics Research Associates and Ecomps
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reached the levels of 1990. Overall taxable sales in 1999 were approximately $2.2 billion,
with retail sales of approximately $1.8 billion.
During the first three quarters of 2000, the City experience total taxable sales of $1.72
billion, of which retail store sales were $1.38 billion, suggesting that the pace of sales during
2000 would be roughly the same as 1999.
During the period 1999 through the third quarter of 2000, the City experienced a
modest increase in retail stores, rising from 1996 to 2046 stores. New stores were added in
the following categories:
.
Apparel + 10
General merchandise +6
Food stores +7
"Other" stores +41
.
.
.
Fewer stores were reported as follows:
. Home furnishings and appliances-5
. Building materials-2
. Auto dealers and supplies -3
. Service stations -6
Table V-15 compares taxable sales trends of San Bernardino to the surrounding
communities of Colton, Lorna Linda, Redlands, Highland and Rialto. In terms of retail sales,
San Bernardino experienced the slowest growth among all of the above communities during
the 1990-99 period. With an average annual growth rate of -1.2 percent during this period,
San Bernardino lagged far behind the countywide growth rate of 1.5 percent. San
Bernardino's retail sales growth during the 1996-99 period was slower than all but one of the
communities (Highland) listed above. The City's non-retail sales, which include a large
portion of business-business transactions, recovered much faster relative to retail sectors.
Taxable sales shares of County totals are presented in Table V-16. San Bernardino's
share of taxable retail sales has fallen from 19.8 percent in 1990 to 15.6 percent in 1999. The
City's share of total taxable sales has also fallen from 17.0 percent in 1990 to 12.9 percent in
1999. Though most of the other communities in the vicinity have maintained or marginally
increased their shares, the volume of growth is marginal in absolute terms. This is further
Economics Research Associates
ERA Project No. 13718
City of San Bernardino
Page V.23
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Table V-16
Taxable Sales Shares
Total Taxable Retail Sales Sbare (or County Totals)
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
San Bernardino 19.8% 19.4% 18.5% 17.9% 17.4% 17.0% 16.5% 15.9% 15.8% 15.6%
Colton 4.1% 4.0% 4.3% 4.0% 3.9% 3.9% 3.6% 3.3% 3.4% 3.5%
Lorna Linda 0.8% 0.9% 0.9% 0.9% 1.0% 1.0% 1.0% 1.0% 1.1% 1.1%
Redlands 5.0% 4.9% 5.0% 4.9% 4.7% 4.6% 4.4% 4.6% 4.5% 4.4%
Highland 0.5% 0.5% 0.6% 0.5% 0.7% 0.7% 0.8% 0.7% 0.7% 0.7%
Rialto 2.9% 3.2% 2.8% 3.0% 2.7% 2.8% 2.7% 2.9% 2.6% 2.8%
San Bernardino County 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Source: California State Board of Equalization and Economics Research Associates
Total Taxable Sales Share (or County Totals)
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
San Bernardino 17.0% 16.6% 15.7% 15.1% 14.6% 14.0% 13.7% 13.0% 13.1% 12.9%
Colton 3.6% 3.5% 3.7% 3.5% 3.4% 3.3% 3.1% 2.8% 2.8% 3.0%
Lorna Linda 0.9% 1.0% 1.1% 1.2% 1.1% 1.2% 1.1% 1.2% 1.2% 1.2%
Redlands 4.0% 4.0% 4.1% 3.9% 3.8% 3.7% 3.6% 3.7% 3.7% 3.6%
Highland 0.6% 0.6% 0.7% 0.6% 0.7% 0.7% 0.6% 0.6% 0.6% 0.6%
Rialto 2.9% 3.0% 2.8% 2.9% 2.8% 2.8% 3.0% 3.3% 3.5% 5.3%
San Bernardino County 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Source: California State Board of Equalization and Economics Research Associates
Taxable Sales Share in the City or San Benardino Vs. San Bernardino County
25%
III 20%
u
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___Total Sales
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Source: California State Board of Equalization and Economics Research Associates
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evidence of the City's eroding market share. Exhibit V-I and Exhibit V-2 graphically
presents the taxable sales growth trends in San Bernardino and its environs.
Taxable sales per capita in the City of San Bernardino and its surrounding
communities are presented in Table V-17. San Bernardino continues to enjoy taxable sales
per capita that are higher than all of its surrounding communities as well as the countywide
averages. However taxable sales per capita in the City has fallen considerably over the past
decade. In 1990 San Bernardino had a taxable sales per capita of $12,279, which was
approximately 170 percent higher than the countywide average. This has fallen to $9,786 in
1999, amounting to only 140 percent of the countywide average. However, high taxable
sales per capita relative to surrounding communities and the regional average often indicates
positive taxable sales leakage into the City. In other words, the City is still able to attract a
fair amount of customers to its retail centers from outside its boundaries, but this capacity has
been steadily declining.
Table V -18 lists the characteristics of most of the multi-tenant retail centers located in
the City of San Bernardino as of mid-year 2000. Approximately 42 percent of the total retail
inventory of 4.1 million square feet are comprised of community serving centers and
neighborhood centers. The 29 year old Carousel Mall with 1.0+ million square feet is the
largest regional center in the City. This is followed by the 35 year old Inland Center, also
with approximately 1.0 million square feet. There are an estimated 465+ stores in all of the
multi-tenant centers in the City, with distributions ranging from 4 to 100 stores per center.
Vacancies have plagued many of the centers. No multi-tenant center reported greater than 87
percent occupancy, except for the Tri-City Shopping Center and the University Valley
Center. The occupancy rates for properties above 85,000 square feet vary from 60 to 85
percent. Some of the centers have serious vacancies.
HOTEL MARKET
The City of San Bernardino hotel market appears to be relatively static during the
five-year analysis period of 1994-99, with a marginal decrease in room supply and a
moderate increase in demand. Based on an independent survey conducted, total room supply
Economics Research Associates
ERA Project No, 13718
City of San Bernardino
Page V -26
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Exhibit Vel
Taxahle Retail Sales T~nds in San Bernardino and Environ.~
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Stmrcc:: California Stale Ih)an.l t lilualil.ati(Ul and I~OI1t)mics Research ASS(lCimcs
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Exhlhit V.2
Taxable NOII~Rctail Sales Trends in Sm. Uern:mllno :lIId EnvinUls
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in the City has fallen from 700,070 room nights in 1994 to 695,325 room nights in 1999. In
contrast, room demand has increased from 384,878 room nights in 1994 to 406,111 room
nights in 1999. Both supply and demand fell sharply during 1999 due to a decrease in room
inventory as well as reduced occupancy rates. Though overall occupancy rates have
increased from 55 percent in 1994 to 58 percent in 1999, it fell by 2 percentage points during
the 1998-99 period. In absolute terms, room rates increased from approximately $46 in 1994
to approximately $58 in 1999, but the level of increase is less significant if inflation is
considered. The cluster of government offices in the City generates much of the local hotel
demand.
The hotel market in the remainder of the county has been relatively more dynamic
during the analysis period. This has largely been driven by growth at the Ontario airport's
cluster of hotels. Room demand in this market has increased from 2.2 million room nights in
1994 to 2.5 million room nights in 1999. Room supply has increased from 3.7 million room
nights in 1994 to 3.9 million room nights in 1999. Occupancies moved up from 59 percent in
1994 to 64 percent in 1999. Room rates have increased to $61 in 1999 from $45 in 1994.
Six new properties were added during this period increasing the room inventory by 643
rooms. Table V-19 and Exhibit V-3 shows hotel market trends in the city of San Bernardino
relative to the remainder of the County
CONCLUSIONS
While the Inland Empire as a whole has seen a tremendous amount of development
activity in recent years, much of this growth and development has been located along the 1-10
corridor farther west towards the City of Ontario and the airport core, and on "greenfield"
newly developable sites. However, much of that inventory of space has been consumed and
demand for new industrial, and to a lesser extent commercial space, continues in the market.
The City of San Bernardino has several key strategic sites where the combination of
infrastructure, accessibility, and developability for industrial land can be exploited to a
greater extent. Key areas include the 1-215 corridor north of Cajon Boulevard in the
northeast comer of the City, and areas adjacent to the San Bernardino International Airport.
Economics Research Associates
ERA Project No. 13718
City oj San Bernardino
Page V -30
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Future land use planning should be cognizant of the potential demand for these uses and
avoid the siting of incompatible land uses on these prime developable locations. The
volumes of land that can be absorbed by San Bernardino in the short to medium tenn (5 to 10
years) is further described in the section which follows.
Economics Research Associates
ERA Project No. 13718
City of San Bernardino
Page V.33
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Section VI
MARKET DEMAND ESTIMATES
INTRODUCTION
This section provides some preliminary forecasts for the potential market demand of
different types of commercial space in San Bernardino. This information is designed to
inform the land use planning process, rather than be determinative of outcomes. This section
will consider likely oncoming demands for office, industrial, and retail floor space in the City
of San Bernardino. This section will also look at the overnight visitor market and estimate
the potential volume of overnight visitors to the City of San Bernardino.
OFFICE AND INDUSTRIAL USES
The need for new office and industrial space in San Bernardino is based on projected
employment growth in the City. ERA's forecast uses the near-term analysis for growth by
industrial sector by the State of California Employment Development Department's Labor
Market Information Division's projections and planning information series for San
Bernardino County as a whole. These sectoral growth rates have been applied to 1999
employment estimates provided by CACI Inc. Supportable space is calculated by applying
an area per employee ratio of 500-800sJ. for industrial and 200 sJ. for office space. ERA
has further adjusted the office space estimates by excluding government and health services
related offices, as they are not included in the existing office space estimates by secondary
sources. The supportable square foot analyses are presented in Tables VI-I and VI-2 and are
constructed as follows.
Table VI-l shows the supportable square foot analysis for 1999. This shows that San
Bernardino had an unmet demand for 65,000 square feet of office space and 172,000 square
feet of industrial space in 1999. Note that the existing occupied space estimates do not
include government and medical offices, owner occupied buildings and smaller offices
located in infill or mixed use projects. Hence, it is likely that the 65,000 square feet currently
Economics Research Associates
ERA Project No. 13718
City of San Bernardino
Page VI-I
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demanded is already being satisfied in other types of properties, Similarly, the 172,000
square feet of industrial space currently demanded is more than likely to be satisfied in owner
occupied properties. Hence, the current office and industrial market is probably in
equilibrium and might even be slightly overbuilt. Note that there is demand for an additional
3.4:t million square feet of space for government and medical uses, however. It is not known
at this time as to how much of that demand has already been met. Also these estimates
include only 20 percent of educational services needs.
Table VI-2 shows the supportable square footage analysis for 2004 based on forecast
employment growths from the State of California EDD by industrial sector. Major groups
are assigned either an industrial or office real estate use. Not considering, medical,
government and 80 percent of the education sector, San Bernardino's unmet office demand
will rise to 851,000 square feet in 2004. Industrial demand will increase to 1,474,000 square
feet based upon anticipated employment growth, and no significant loss of employment and
business types already in place.
RETAIL DEMAND
Table VI-3 shows a demand schedule for supportable square feet of retail space in
San Bernardino. This analysis is based on the following assumptions.
.
Retail expenditures (excluding transportation costs) are about 27 percent of gross
household income.
.
Penetration rates will vary with distance
.
New retail space will be supported at $175 per square foot in 1999 dollars.
Though this might appear low in absolute terms, it should be noted that this is an
average of all qualities of retail outlets in the City. This will make new
development difficult as most new space will normally require upwards of $200
per square foot.
Economics Research Associates
ERA Project No. 13718
City of San Bernardino
Page VI-4
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Table VI-3 shows that the existing retail market demand in 1999 would yield a
citywide demand of approximately 3.58 million square feet of retail space. Assuming that
there is already 4.0 million square feet of space in the market, it appears that there is a
surplus of 420,000 square feet. Retail demand increases marginally by 2004 to 3.76 million
square feet. Compared to the 1999 base of 4.0 million square feet, there is still a surplus of
240,000 square feet (considering supply levels constant). New market entrants will normally
build new store space, however (Lowe's, Kohl's, Walgreens, etc.). This can mean that some
existing space may become vacant and that new centers or freestanding stores are built in the
community.
OVERNIGHT VISITOR MARKET
As shown in Table VI-4, ERA has estimated the total number of overnight visitors to
San Bernardino to be over 600,000 annually. Applying typical shares of business travelers, it
is estimated that more than 137,000 of the trips are business related. The estimates of
overnight visitors are primarily based on 1999 Smith Travel Research hotel census data, U.S.
Department of Transportation data and ERA estimates. It should be noted that these figures
slightly underestimate overnight visitors visiting friends and family. ERA understands that
the region would have a fairly large share of tourists visiting friends and family.
Unless an existing property closes or is converted to other use there does not seem to
be an essential unmet demand. Year 2001 travel has been down and will likely remain so
through mid-2002. Thereafter, either property replacement or a new hotel entrant might
pursue a project of up to 200 rooms.
CONCLUSION
At this time, market indicators suggest that San Bernardino will experience increasing
demand for industrial space within the City and to a lesser extent create demand for
cornmercial office space. However, given current market conditions and the absence of a
major market-transforming project such as those represented by the Vision 20/20 plan, the
Economics Research Associates
ERA Project No. 13718
City of San Bernardino
Page VI-6
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Table VI-4
ESTIMATED NUMBER OF BUSINESS VISITORS TO THE CITY OF SAN
BERNARDINO (1999)
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Number of Rooms'
1,905
Average Occupancy Rate'
58.4%
Room Nights Sold Per Annum
406,070
Average Length of Stay (Nights)'
2.2
Number of Parties Per Annum
184,600
Average Number of Persons Per Party
1.3
Number of Persons Staying in Hotels & Motels
240,000
Estimated Total Overnight Visitors Per Annum'
(Including visiting friends and family)
612,200
Percent of Total Travel Business Related'
22.5%
Total Business Travelers
137,700
I Smith Travel Resrech
, Average for all overnight visitors staying in hotels/motels.
, Multiple visits per person are included in this total.
, U.S. Dept. of Transportation, Bureau of Transportation Statistics
Source: Economics Research Associates
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City of San Bernardino is overbuilt in retail space. This does not mean, however, that the
City will not see any new retail development in the near term. In fact, it is likely to be the
focus of continuing interest by large-format retailers such as Wal-Mart and home stores such
as Lowe'slHome Depot (ERA understands that Wal-Mart has already secured a site at the
northwest corner of University and the 1-215). However, ERA anticipates that this will
represent a marginal growth in retail demand which will make existing retail developments,
particularly strip developments along Highland and Baseline Avenue, as well as Mt. Vernon
and Waterman, highly vulnerable to this new competition. As a result, we forecast only
marginal increases in the total net volume of occupied retail space in the City of San
Bernardino. Also, some of the key efforts that may help alleviate the current challenge of
retail leakage are to modernize/upgrade existing retail space and to identify and aggregate
prime retail parcels to attract larger tenants. It is also important to realize the long term
outcomes/implications of all proposed new developments. For example, the Hopkins/
Pearlman development project in the Santa Fe Depot area is ideal as a mixed cornmercial
development at that location, as long as it does not interfere with the regional transportation
networks from its traffic and other consequent impacts.
As for hotel development, it is possible to anticipate with the growth of new
commercial office and industrial space that there will be eventual demand for modest
expansion of hotel room inventory in the City. Likely locations for this expansion would be
along the 1-10 corridor in the hospitality lane cluster, or possibly as a site along the 1-215
freeway. This will become especially attractive with the expansion of the Foothill Freeway
west toward Fontana, which will create a major transportation nexus in the northeast corner
of the City of San Bernardino. ERA is aware of a resort type project (Arrowhead Springs)
being proposed in the foothills. The success of such a high-end facility is more dependent on
their unique marketing and management capabilities than absolute market demand
(competing facilities, if any, will be a key factor)
Economics Research Associates
ERA Project No. 13718
City of San Bernardino
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Section VII
SUMMARY OF MARKET OPPORTUNITIES
INTRODUCTION
This section provides a preliminary list of potential market opportunities, strengths
and challenges for office, industrial, commercial and recreational land uses in San
Bernardino.
OFFICE DEVELOPMENT
. As noted in the previous sections, the Inland Empire office market is primarily
concentrated around the Ontario Airport core. Governmental and government-
related offices do remain clustered in San Bernardino and Riverside.
. The airport market has matured over the last few years, and has been able to
attract a significant number of office users from both Los Angeles and Orange
Counties with minimal lease/tenant improvement concession incentives.
. The demand for office space to the east of Ontario is likely to increase in the next
5 to 10 years, but will be dependent on a number of factors such as:
- Availability of high quality housing for employees. Cost pressure from the
west is already making the Inland Empire an attractive location for new
residential development. This trend will continue at a very rapid pace, and the
growing population base (or labor force) in the region will be the key magnet
for new office users. The ability of the various Inland Empire communities to
capture this oncoming "labor force", however, will depend on each
community's "attractiveness". Image of the City will be increasingly
important. As mentioned earlier in this report, it is important to realize that
labor markets are also regional, hence shortfalls in certain types of housing
within the City's jurisdiction does not always mean that it will be unable to
attract employers (as long as regional jobs to housing balances are met).
Economics Research Associates
ERA Project No. 13718
City of San Bernardino
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- Agglomeration with existing and emerging employment clusters will also be
attractive to certain sectors of office employers. Identification and marketing
of any existing and emerging clusters will be helpful in capturing potential
employers.
It is important to note that a large share of the current speculative office
development in the Inland Empire still depends on absorption resulting from
higher costs in Los Angeles and Orange counties. Though this will be less of
an issue as the market matures, it will be important in the short term. The
implication of this phenomenon is that any short-term slowdown of the
economic cycle that leads to increased vacancies (and decreased rents) in the
west, might have a far more adverse effect in the Inland Empire market.
Keeping this in mind, it is important for the Inland Empire communities to
build on long-term value and competitive position, relative to the regional
market.
- Quality of available space will be an important factor for new office users.
The market currently has a slightly higher share of Class B space that Class A
space.
.
ERA's preliminary supportable space estimates show that the City of San
Bernardino's office market is currently overbuilt. Projected employment growth
estimates show, however, that the City could capture as much as 170,000sJ.
annually, over the next five years.
.
Much of the oncoming office demand in the City of San Bernardino is likely to be
fulfilled by infill development in the Downtown area. From a land use
perspective, the City should be proactive in promoting infill and mixed
office/commercial development in the Downtown area, in view of their longer
term Downtown Revitalization strategy. This will be one of the steps in
preserving and reinforcing the image of Downtown as a "center" of the city. A lot
Economics Research Associates
ERA Project No. 13718
City of San Bernardino
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of this new development might involve both 'use' and 'class' conversions to meet
market needs.
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An increase in concentrated Downtown employment will also result in an
increased employee expenditure base, which in turn will be able to support an
increased amount of retail space in the Downtown core.
.
If market conditions permit, some lower density office park type developments
could be accommodated on the northern part of the City, along 1-215. Specific
market demand for office park properties may arise after 2005 when the 1-
21O/Route 30/I-215 connections are completed. This will be an effective buffer
use between the oncoming new residential enclaves to the north and potential
industrial uses that might locate along the freeway to capitalize on access. There
is also infill space available along Hospitality Lane in the southerly quadrant of
the City.
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In the long term, opportunities for office development encompassing a range of
densities might also be possible in the Norton Air Force Base area, subject to the
overall reuse plan and initial developer successes in luring industrial and fIexi-
space users.
INDUSTRIAL DEVELOPMENT
.
Unlike the emerging office market, the Inland Empire industrial market is far
more mature, and has established itself as a top location. This is due to a range of
competitive advantages that include:
- Access to a significant International Airport (Ontario), two transcontinental
railroads, three interstate highways, and a number of 'incentive zones'.
Potential for industrial uses at San Bernardino International Airport.
- Availability of large assemblies of land at competitive prices, with access to
service and utility infrastructure.
Economics Research Associates
ERA Project No, 13718
City of San Bernardino
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Industrial vacancies in the City of San Bernardino (4.8 percent) are significantly
lower than the regional market (7.1 percent), as of the 3rd quarter of 2000.
However, industrial rents are still marginally lower than the regional average.
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ERA's preliminary demand estimates show that the current industrial market in
the City might be marginally overbuilt. It is estimated, however, that the City
could absorb approximately 400,000:t: sJ. annually in the next 5 years, with a total
capacity to accommodate approximately 2+ million square feet at the end of the
period. We understand that KolI Co. has already submitted plans for a 650,000sJ.
warehouse in the Airport area.
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In the short term, most of the industrial growth is likely to be in the warehouse
and distribution sector, due to availability of some prime locations along the 1-215
and 1-10. However, in the longer term there could be opportunities to attract
certain key manufacturing sectors, which would capitalize on the City's
educational institutions and attractive labor force. Examples of this could include
technology hardware, printing and publishing specializations, medical
manufacturing.
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It is extremely important for the University to have their engineering faculty in
place in order to attract some of the above sectors, especially the ones requiring a
highly skilled labor force (medical manufacturing etc.).
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It will be a challenge to attract hi-tech R&D firms (especially bio-tech) unless
strong programmatic links between the university and the potential tenants are
possible. For R&D tenants, proximity to a strong research institution is extremely
important (ongoing academic research will have to complement the R&D
company needs). Opportunities do exist in the Bio-tech R&D sector if
programmatic alliances can be forged between prospective tenants and the Lorna
Linda Hospital.
Economics Research Associates
ERA Project No. 13718
City of San Bernardino
Page VII-4
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Technology sectors oriented towards production and manufacturing (as opposed
to R&D) are more likely to locate in San Bernardino, either near the former
Norton Base or in a future CSUSB Research Park. Programmatic ties with
research institutions are not the primary concern of this type of industries.
However, infrastructure costs and availability (utilities, access, transportation,
optical networks) and availability of skilled labor will be very important. This re-
emphasizes the need for the University to set up an engineering faculty.
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Larger assemblages of land exist on the northwest part of the City in the
'Northwest' redevelopment project area. Some of these sites with frontage along
the 1-215 could be ideal locations for warehouse-distribution and light
industrial/manufacturing centers. There are also opportunities of infill and
development in the "Southeast Industrial Park" redevelopment project area, and
the "Tri-City" redevelopment project area.
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Proactive alliances between the City and the existing educational and professional
institutions (the Universities, medical facilities, and hospitals) could be an
effective tool to attract high value industrial employers to the City. This includes
University owned land to be made available for such developments,
creating/enabling endowments (jointly with the City) to attract funding for the
new engineering faculty, identification of potential programmatic links to the
university that can be offered to prospective tenants.
RETAIL DEVELOPMENT
.
Although San Bernardino continues to attract retail dollars from neighboring
communities, its retail position as a regional retail center is rapidly declining.
This can be attributed to two primary reasons:
- Dilution of the regional market with the emergence of newer and higher
quality shopping facilities.
- Peripheral developments of "shop for value" retailers in the region.
Economics Research Associates
ERA Project No. 13718
City of San Bernardino
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- Steady decline of resident buying power since the closure of the Norton
Airforce base. This was further exacerbated by the general economic
recession of the 90s, and now may recur in late 200llearly 2002.
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Most of the existing multi-tenant retail centers in the City are plagued by
vacancies ranging from 15 to 40 percent.
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ERA's preliminary analysis shows that the existing retail stock is overbuilt by
almost 420,000sJ.:t. Given current growth rates, it is unlikely that all of this
space will be reabsorbed even in the next 4 to 5 years.
.
At present the City should concentrate its efforts to prevent any leakage of
community shopping expenditure. This should at least ensure that close to 100
percent of the day-to-day shopping needs of the resident population is fulfilled
within the City.
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The next objective should be to increase regional retail capture. Though this is
unlikely to result in the development of new shopping centers, it will however
involve the redevelopment and revitalization of existing ones. The commercial
developments along Hospitality Lane, with proximity to both the 1-10 and 1-215
freeways should be able to recapture some of the lost regional retail expenditure
once the development achieves a critical mass of complimentary tenant mixes.
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Realization of the City's 'Lakes and Streams' project as a regional recreational
attraction could be a significant catalyst in helping San Bernardino regain its
regional retail position.
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Other retail opportunities exist in the downtown area in the form of
redevelopment and infill projects. However, this has to go hand-in-hand with
other mixed use residential and/or office development projects, which will justify
the addition of new retail space in the area. (Starbucks is an example)
It is likely that future retail site locations may be on the periphery of the City in
locations such as the eventual 1-210/1-215 intersection.
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Economics Research Associates
ERA Project No. 13718
City of San Bernardino
Page VII-6
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. The City will therefore probably experience some replacement of existing retail
floor spaces during the next 5 years, but may not achieve significant net new floor
space occupancies.
HOTEL DEVELOPMENT OPPORTUNITIES
. Currently the hotel market in the City of San Bernardino shows moderate demand
for new rooms. Both room supply and room demand have remained relatively flat
over the past five years.
. The overall occupancy and room rates in the City are marginally lower than the
remainder of the County. The decline of defense related establishments and the
relocation of defense contractors from the City also resulted in a significant drop
in the demand for business accommodations.
. The existing clusters of Federal, State and County offices will continue to demand
a certain ongoing level of moderately priced business hotels in the City.
However, at present most of the overnight business visitors still prefer airport
locations.
. Tourist usage of hotels is currently minimal and it is estimated that a large number
of non-business overnight visitors to the City prefer to stay with friends and
relatives.
. The current and future market conditions in the region do not suggest strong
demand for more hotel rooms in San Bernardino, unless actions are taken that
would increase room-night demand, such as the development of a university-
based conference center to induce group-business demand. While demand for
more total hotel rooms is not demonstrated, certain hotel-types may be under-
supplied, such as modern business-serving hotels. Over the next 4 to 5 years San
Bernardino could add one or two mid priced, quality business hotels in the City
(200:i: rooms).
Economics Research Associates
ERA Project No. 13718
City of San Bernardino
Page Vll-7
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CONCLUSIONS
These market opportunities represent the likely level of forecast demand for key non-
residential land uses in the City of San Bernardino. The square footages have been used in
supplying the estimates for the fiscal impact analysis and policy recommendations sections
which follow. Please note that the fiscal impact analysis represents an estimate of near-term
development to potential market saturation rather than some achieved end state through the
much more lengthy duration of the master plan horizon (10 to 20 years). However, the City
of San Bernardino should be cognizant of the larger term potential demands in both its land
use planning and economic development efforts in order to attract and retain both employers
and future development.
Economics Research Associates
ERA Project No. 13718
City of San Bernardino
Page VIl-8
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Section VIII
FISCAL IMPACT ANALYSIS
INTRODUCTION
As part of the scope of services, ERA was requested to forecast the fiscal effects of
the market demand for new non-residential land uses in the City of San Bernardino. The
purpose behind this exercise is to allow the City to understand the net potential effects of new
development on the General Fund revenues of the City of San Bernardino. That is to say,
this analysis will provide planning factors that can be used in assessing the fiscal impacts of
various categories of non-residential development.
For the purpose of this analysis, we have chosen to estimate the fiscal impact of
market saturation at levels identified earlier in this report. However, it should be understood
that these are planning guidelines only and do not necessarily represent some end state that
will finally be reflected in the possible long term build out of the revised land use element of
the City's General Plan.
Assumotions of the Model
The fiscal impact model utilizes the following assumptions:
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It is based on the assumption of near term (next 5 years) development. That is to
say, the model represents the fiscal impact of non-residential land uses at a
hypothetical point in time in which all of the forecast elements are built out in
their entirety.
.
The model only measures the fiscal impact of development on the General Fund
revenues of the City of San Bernardino. Any other jurisdiction such as San
Bernardino County, San Bernardino Unified School District, any special districts,
and any others are explicitly excluded from this analysis.
I.
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The model measures revenues and expenses on a recurring annual basis only.
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City of San Bernardino
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. All values are presented in 2001 dollars.
. The model assumes no change in the level of service provided by the City of San
Bernardino, and costs are based on the analysis of the City's fiscal year 2000-
2001 budget.
Table VIII-l shows the non-residential land uses by gross square footage estimated
by ERA to represent near term/next 5 years market demand. This represents approximately
2.8 million square feet of total new net demand of which approximately 2 million square feet
are anticipated to be demanded by industrial land users. In addition to the square footage
estimates, ERA has also supplied for planning purposes only an estimated scale of this
development in terms of acreages which cumulatively total an estimated 181.3 acres. These
estimated acreages are provided as planning factors only to be considered in future land
planning efforts by the City of San Bernardino.
The lower half of the table shows the City of San Bernardino's current land use
inventory for each of the non-residential land uses under consideration in this report. This
forms the basis for estimating the per square foot costs and revenues based on existing levels
of service.
Table VIII-2 displays ERA's estimate of average valuations per square foot that have
been used in forming the fiscal impact model. Note again, these will vary from project to
project, but these costs represent realistic estimates based on current market conditions.
Fiscal Imnacts
Table VIII-3 shows the non-residential property tax revenue distribution at 5-year
'build-out' in 2001 dollars. Total net new demand can be forecast to account for $158.4
million worth of new assessed valuation which would yield slightly over $1.58 million in
total property tax revenues. Assuming an average split by tax rate area with 11.5 percent of
the total property tax returning to the City of San Bernardino, this would result in an annual
reoccurring property tax value of approximately $182,100 per year available to the City of
San Bernardino (most this would probably be available as redevelopment tax increment).
Economics Research Associates
ERA Project No. 13718
City of San Bernardino
Page VIII.2
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Table VIII-I
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SAN BERNARDINO GENERAL PLAN
FISCAL IMPACT ANALYSIS
FINANCIAL AND PROJECT ASSUMPTIONS
Net New Demand (sq. ft.).
861,000
851,000
10,000
Land Use Designation
General Commercial
Office
Retail
Industrial
Hotel (units)
Total
. ERA Estimate
City of San Bernardino Composite Land Use Inventory
Use Units
Office
Retail
Industrial
Hotel
1,974,000
250
2,835,000
3,300,000
4,128,064
9,500,000
1,905
Estimated Acreage
27.7
27.4
0.9
151.1
2.0
181.3
Source
Grubb & Ellis
NRB
Grubb & Ellis
STR
Source: Economics Research Associates and the City of San Bernardino
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Table VIII-2
BUILDING VALUATIONS
(Valuations based on a square footage basis)
Total Valuation Average cost
Use Land Value Building Cost Is.f. per unit
Office 20 60 80
Retail 18 30 48
Industrial 8 25 33
Hotel 25 95 120 $ 72,000
Source: Economics Research Associates
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Table VIII-3
Property Tax Valuation (Non-Residential)
Valuation
Less Existing Annual Net New Assessed
Land Building Tntal Valuation (Estimates)' Valuation
Office $ 23,828,000 $ 51,060,000 $ 74,888,000 $ 11,914,000 $ 62,974,000
Retail 720,000 300,000 1,020,000 $ 360,000 660,000
Industrial 52,640,000 49,350,000 101,990,000 $ 26,320,000 75,670,000
Hotel 2,178,000 18,000,000 20,178,000 $ 1,089,000 19,089,000
Total $ 79,366,000 $ 118,710,000 $ 198,076,000 $ 39,683,000 $ 158,393,000
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Property Tax G<:neration'
Net New
Assessed Property Tax @ City Share @
Valuation 1% 11.5%
Office $ 62,974,000 $ 629,740 $ 72,420
Retail 660,000 6,600 759
Industrial 75,670,000 756,700 87,021
Hotel 19,089,000 190,890 21,952
Total $ 158,393,000 $ 1,583,930 $ 182,152
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lane half of the estimated land assembly costs shown on Table VIII,2
, Significant portions, probably the huge majority, will go to the Redevelopment Agency as Redevelopment
tax increment, and IIll1 to the General Fund.
Source: Economics Research Associates
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Table VIII-4 allocates the fiscal impacts in terms of expenses and revenues to the City
of San Bernardino's General Fund. Note that a large portion of property taxes may go to
redevelopment tax increment funding and may not be available for the General Fund.
Exnenses
Expenses are allocated by department with a pro rata share for costs by each of the
non-residential land uses. ERA forecasts that total annual expenses from all four non-
residential land uses to amount to approximately $1.7 million at five year 'build out'.
Revenues
Revenues are forecast using two methods. Business License taxes, sales taxes, Utility
user taxes, and transient occupancy taxes are derived by using ERA's estimates of
performance and gross receipts from the oncoming new developments. However, franchise
taxes, licenses/permits, and fines/penalties are calculated on a square foot basis and their pro
rata share associated with non-residential land uses. Total revenues for all four land uses at
stable year are forecast at just over $2.2 million excluding property tax revenues, and a little
over $2.4 million if one were to include property taxes. This would yield a total net fiscal
impact from non-residential land uses of approximately $654,600 annual recurring revenue
dollars available to the City of San Bernardino's General Fund accounts. This result occurs
because the estimated market demand mix for near term land uses does not provide for
significant retail growth.
CONCLUSION
These results are in line with the general experience that most non-residential land
uses tend to have positive fiscal impacts. However, office uses in San Bernardino tend to
yield net negative direct impacts due to the relatively low revenues generated compared to
fiscal costs. It is important to note that office uses will produce other positive impacts
indirectly through employee expenditures in the City resulting in sales tax generation. Note .
that the levels of revenue outlined in this analysis indicate a balanced fiscal result from all
Economics Research Associates
ERA Project No. 13718
City of San Bernardino
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Table VID-I
Fiscal Impact of Non.Residential Uses
(UliUziDg City Budget .fFY 2000-2001)
FYnPnuo<i Portion Portion
Portion Assignable Portion Ponion
10 non-residential Assignable to - Assignable to As.o;.ignable 10 As.'iignable to
Total Expenses uses @ 25% Office @ 22% Retail @ 28% industrial @ 20% Hotel @ 7%
Departmental Expenses
Fire Dept. S ]8,128.900 S 4.532.225 S 997.090 S 1.269,023 S 906.445 S 317.256
Police Depl. 36.145.800 9.036.450 1.98S.019 2.330.206 1,807,290 632.352
Public Service &
Facilities ManaJZemenl 11.458.600 2.S64.650 630,223 802.102 572.930 200.526
Total S 65.733.300 S 16.433.325 S 3.615.332 S 4,601.331 S 3.286.665 S 1.150.333
Fynf'n'le!l oer!l r
Office per s.f. Retail pers.f. Industrial per s.f. Hotel Pers.!.
Departmental Expenses
Fire Depl. S 0.30 S 0.31 S 0.10 S 0,32
Police Dept. 0,60 0.61 0.19 0,63
Public Service &
Facilities Mana~ement 0.19 0.19 0,06 0.20
Total S 1.10 S 1.11 S 0,35 S 1.15
Total Estimated
Office Retail Industrial Hotel Expenses
Annual cost of new
development S 932.317 S 11.146 S 682,934 S 150.962 S 1.777.360
Revenue!l from new develonm,.nl
from Office From Industrial Total Estimated
U... From Retail Uses U... From Hotels Revenues
Taxes (Rough Estimates)
Business Ucense Taxi S 423.798 S 1.875 S 49.350 S S 475.023
Franchise Tax2 32.979 394 51,938 5.340 90.652
Sales Tax3 42.550 25.000 98,700 8,213 174,463
Utility User Tax. 272.320 3.200 631.680 42,000 949.200
Transient Occupancy Tax! 465.375 465.375
Ucenses and Permits' 17.5S1 206 33,999 3.131 54.919
Fines and Penalties' 12.851 151 24.852 2.289 40.142
Sub Total S 802.079 S 30.827 S 890.519 S 526.34S S 2.249.773
Net Fiscal Impacls
(ExdudiDg Property Taxes) S
(130.238) S
19,680 S
207.585 S 375.3S6 S
472.413
R~enues from property
taxes (if not pledged 10
redevelopment tax
increment)
S
72.420 S
759 S
87.021 S
21.952 S
182.152
From Office
U...
From Industrial
U...
TOlal Eslimated
From Hotels Revenues (costs)
From Retail Uses
Net POleDtial Fiscal Impacts
IndudinK Property Tans
(57,818)
654,564
20,439
294.606
397.338
IBusiness license taxes are calculated on the basis of estimated gross receipts@S2.49/SI,OOOforoffices.SO.75/S1.000 for retail
and SO.25/S1.000 for industrial uses
2ERA assumes thai If3rd of all franchise taxes are attributed to the above land uses. Of this 22% are from offices. 28% from retail.
43% from industrial and 7% from hotels. ERA has applied Is.f. revenues derived from existing inventories as shown in Table VlII-}
3ERA assumes retail sales will yield S250/s.fJyr. It is also assumed thai office and industrial uses will have a 2% relail component,
and hotels will generale S 15/room nighl in retail sales. City retail tax rale of 1 % is applied
.ERA assumes utility usage of S4/s.fJyr. For all non-residential uses on an average. City tax rale of 8% is applied
~ransient occupancy tax rate of 10% is applied to the new hotel rooms assuming a 60% occupancy rate and $85 room rate
6ERA assumes that If3rd of all Iic./permits fees are attributed to the above land uses. Of this 20% are from offices. 25% from retail,
48% from industrial and 7% from hotels. ERA has applied Is.f. revenues derived from existing inventories as shown in Table VIII-I
'Same methodology as License and permit fees
48% from industrial and 7% from hotels. ERA has applied Is.f. revenues derived from existing inventories as ~hown in Table VlII-}
Source: Economics Research Associates
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sources. If the City is able to capture higher values of retail sales within office (leasing
agencies) and industrial pad space (direct sales from loading dock) the results will be
improved. This perspective may be useful in forming a long-term strategy for the City
independent of efforts to attract additional retail sales. It should be noted however, that the
likely near-term future developments will occur within existing project areas. Thus some
existing property tax revenues are already assigned to redevelopment tax increment bond
retirement (and do not flow to the General Fund). Similarly, upcoming new development
projects will likely generate additional redevelopment property tax increment which may not
be available to support the General Fund.
Economics Research Associates
ERA Project No. 13718
City of San Bernardino
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Section IX
ECONOMIC DEVELOPMENT ISSUES, GOALS, OBJECTIVES
AND POLICIES
INTRODUCTION
This final section of the report enumerates a set of key goals, objectives, and policy
statements for the City of San Bernardino in view of the current and anticipated market
trends. ERA anticipates these goals, objectives and policies to set a planning framework for
the City's Commercial and Industrial land uses in the context of market forces. Though these
strategic initiatives are not a part of any formal policy document, they are intended to form
the basis for the economic development component of the City's General Planning efforts
and could be incorporated into the Economic Development Element of the General Plan.
SUMMARY OF ISSUES
A combination of factors including the national recession of the early 1990s, the
closure of the Norton Air Force Base and increasing regional competitive forces in the
commercial/industrial sectors, have continued to challenge the City of San Bernardino during
the last decade. The present economic downturn, acknowledged to have begun in early 2001,
is also an evolving challenge. Among the above, the closure of Norton Air Force Base had
the most adverse effect on the City's economy. San Bernardino instantly lost the multiple
levels of economic activity generated by the base during the last 50+ years of its presence.
The first and most obvious loss was of course in terms of employment. Since the
closure of the base that resulted in the loss of 1O,000:t jobs, the City has been unable to
attract significant concentrations of higher quality jobs. The massive loss of jobs also
affected the reputation of the City, which is often being identified with concentrated welfare
dependent populations. There was a sudden drop in taxable retail sales, resulting in
escalating retail vacancies, loss of regional market shares and a decline in fiscal revenues.
These issues have also resulted in the City's inability to attract significant higher value
residential developments or significant improvements in existing residential sales values.
Economics Research Associates
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City of San Bernardino
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On the other hand, San Bernardino has a number of valuable assets which could help
the City to successfully reposition itself as an important focus of economic activity in the
Inland Empire as well as the Southern California region. One of the City's most important
assets is its geographic location relative to the regional road and rail transportation network.
The City's prime location within the "freeway ring" consisting of the 1-10, 1-215 and the SR-
30, combined with rail access via the BNSF intermodal yard, offers tremendous potential to
promote the "Transcontinental Hub" concept. Reuse opportunities of the Norton Air Force
Base facilities and development as the San Bernardino International Airport (SBIA), could
become significant economic catalysts if successful. Indeed, there are strong signs that SBIA
property reuses have become highly viable in the regional marketplace. ERA does not feel
that rail spur lines into the industrial areas at the former Norton base will provide any
significant advantage for the success of these developments, given prior experience in
Ontario and Corona. We understand that a rail connection to the former Norton base would
present significant north-south traffic issues that can only be mitigated with very expensive
grade separations.
There are also numerous other reuse/development opportunities at a relatively large
scale at well-accessed locations. The City has managed to consistently attract and win
Federal, State, and County properties/facilities, grants, improvements, and employment
location commitments. San Bernardino is not only the seat of the largest county in the
nation, but also has been the preferred location for most Inland Empire government,
office/administration centers. The San Bernardino Community College District (San
Bernardino Valley College) and the California State University at San Bernardino provide a
valuable institutional support for higher education and technical educatiOn/training
capabilities. The two institutions have combined enrollments of 26,000+ and combined
faculty totals of 1,000+.
The City is immediately ringed by some of Southern California's finest (and
affordable) mountain recreation facilities. In fact, the above regional amenities combined
with the City's affordable housing stock could prove to be a significant asset to attract and
retain some of the evolving competitive labor force. San Bernardino has been consistent
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City of San Bernardino
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with its success in positive intergovernmental relationships, and has a reputation of
delivering Affirmative Action and Equal Opportunity results.
COMMUNITY IMAGE-THEMES TO BUILD ON
In this assignment ERA was requested by the City of San Bernardino to establish a
thematic approach to improving the general image of the community. It was felt at the time
that issues surrounding San Bernardino's market reputation were effecting economic
development efforts. As a result of this analysis ERA has developed several broad themes
on which the city can build on in projecting its positive vision for the future to broader
audiences.
Events and Ceremonies
The remarkable success the City has enjoyed as host to the annual (every September)
Route 66 Festival has steadily attracted positive attention to the City. It is visual (our town),
recognizable (our downtown), recent, and captures generations. The consistency of the
event, and the welcoming provided by the event operators and the City, has "captured the
brand." Now it needs to continue forward. Also, the Route 66 weekend festival opens the
public eye to the hosting capacities of the City.
Prior to this present time, there have been (and continues to be) other annual events
and activities which have "gotten lost" in the overall massive calendar of events and activities
in Southern California. One such has been the National Orange Show, which also resonates
with the citrus heritage of the entire Inland Empire.
An entirely positive circumstance has been the opening of the new San Bernardino
Baseball Stadium which is an effective draw and has refocused attention, particularly in its
immediate center city market area. Taken together, San Bernardino has, in ERA's opinion,
turned the corner on hosting reputation and attractions. Clustering of hosting capacities
along Hospitality Lane, visible from the freeway, has been very positive. There are miles to
go, but the momentum is solid at this time. The continuing policy of weaving together
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City of San Bernardino
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history, the crossroads location, and connectivity with outdoor recreational destinations
appears to be a solid policy group to pursue.
Governments Center of the Inland Empire
An enduring strength for the City of San Bernardino has been its collection of
governments of every level. A simple tour of the telephone book well describes the amazing
collection of agencies, deliberately public as well as quasi-public and of a special district
nature. We are a city, a county seat, a state office cluster, and a federal agencies location
group. The City, along with its partner - the County - has continually reinvested in
public/governmental, health, and other facilities and, indeed, the most modern buildings in
the downtown core area are the civic and governmental properties. Sustaining and further
collecting governmental offices should continue to be a core economic development and
diversification policy. The City and its political leadership and representation have
consistently delivered results in this regard and must continue to do so as opportunities arise.
Educational Cluster
A total of more than 25,000 students attend California State University San
Bernardino (CSUSB) and San Bernardino Valley College. The faculties also represent more
than 1,000 persons. Additionally, the college and university staffs excluding the faculty are
nearly the same number, another 900 persons.
This clustering, which is sure to grow as the Inland Empire population grows, is a
core strength and will continue to be highly positive for the City itself. As shown at other
campuses and the nearby environs, it is entirely likely that a proactive policy which helps to
welcome the incubator firms formed by faculties, research staffs, graduate students, and
recent graduates will provide both additional jobs and additional wealth. It will also push
forward technologies and competencies which are actually in place but have not yet
expanded outside of the campuses to a significant degree. Enterprises, mostly very small
starter firms, founded on and adjacent to campuses, should be encouraged by the City, its
Redevelopment Agency, and in concert with the college and the university.
Economics Research Associates
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City of San Bernardino
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Initiation of a College of Engineering at CSUSB will be a highly positive economic
development boost. Practical engineering training specialties can substantially enhance
investment in the region.
Geography/Topography Drives Locational History and Assets
San Bernardino, as a city, performs incredibly important functions as a
transcontinental hub and gateway. It is also, as importantly and probably growing In
importance, a utility hub in terms of energy transmission, water transmission, telephone
signal transmission, and additional communications technologies.
Next policies for the City must be to transform the gateways and corridors into next
generation hub functions (hubs for information and communication, energy, mass media).
The City lies astride the transcontinental corridors and also the energy and communications
corridors; it needs next to develop these locational strengths as potentials for growing
businesses which utilize these locational assets.
Although the I-15/Devore Cutoff literally "made" the opportunities for the City of
Ontario, those have been 1970s technologies related to intercontinental trucking and
warehousing, as well as Ontario airport expansion from a former military field which became
a civilian asset in 1946. Those "victories" for Ontario will become long in the tooth and San
Bernardino may have the opportunity to seize initiatives with next technologies and
somewhat more intensive land uses than the warehousing fields of the California Commerce
Center in Ontario.
GA TEW A Y TO THE MOllNT AINS AND DESERTS
San Bernardino has a unique opportunity to reinvent itself as the provisioning place
and the recreational equipment stores cluster location. Millions of Californians and out-of-
state visitors pass through the City on the way to the San Bernardino Mountains and also on
the way to the deserts. An assessment of potential gaps in retail goods and services for all of
these cadres of visitors can help define opportunities for furthering the clustering of these
Economics Research Associates
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City of San Bernardino
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types of services. As a true gateway to the mountains and deserts, the City will also generate
an effective additional reputational quality which it well deserves.
GOALS, 08 IECTIVES AND POLICIES
In view of the above challenges and opportunities, along with the information
presented in the preceding chapters, ERA's Commercial and Industrial land use strategy for
the City of San Bernardino is put forth in the form of a distinct set of economic development
goals, which are complemented by corresponding objectives and policy statements. It should
be kept in mind that the purpose of these goals, objectives and policies are focused to set a
planning framework for Commercial and Industrial land uses in the City.
With the understanding that a long term economic development plan needs to be
dynamic, one must ensure that the Goals and Objectives of this framework allows San
Bernardino to continuously reposition itself as multiple economic activities evolve. As a
result, "Goals" are a declarative statement of City qualities and intentions (related to the
City's overall vision) that tend to be both now and in distant focus. "Objectives" by
definition are statements towards which efforts can be directed to achieve the "Goals". Most
often the end of an "Objective" action can be quantified or measured. "Policies" set the
parameters for actual implementation steps to be taken by the City to realize the Objectives
and achieve its Goals.
Goal] :
Encourage economic activity expanding upon the existing and oncoming
locational strengths of San Bernardino
Objective 1.1: Expand on the concept of a "Transcontinental Hub"
Policy 1.1.1: Retain and expand trucking, warehousing and distribution
opportunities.
Policy 1.1.2: Attract warehousing/distribution centers with "Just in Time"!
inventory storage needs.
1 lust.in.time inventory storage is an inventory management technique where inventory carrying
costs/responsibilities are moved to tbe supplier, and sellers demand delivery on an 'as required' basis.
Economics Research Associates
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City of San Bernardino
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Policy 1.1.3: Incentivize industrial users with "multi-modal" needs.
Objective 1.2: Capitalize on the frontages and properties visibility along the 1-215, 1-10 and
SR-30 to attract larger high value employers
Policy 1.2.1: Discourage subdivision of larger industrial land parcels with
freeway frontage.
Policy 1.2.2: Protect some large parcels with frontage along the 1-10 and 1-215
for high value manufacturing/R&D establishments.
Policy 1.2.3: Pre-plan the opportunities which are coming for properties which
will be adjacent to the I-2101I-215 interchange expected to be completed in
2005-2006.
Objective 1.3 Optimize existing redevelopment project areas to identify and prioritize
development opportunities.
Policy1.3.1: Concentrate on the Southeast Industrial Park in the near term to
attract high value employers.
Policy 1.3.2: Develop the Northwest and the State College (west of 1-215)
redevelopment areas as high value industrial!R&D uses.
Policy 1.3.3: and enhance Downtown as a Public/Government sector core.
Policy 1.3.4: Seek development opportunities to the west of 1-215 In the
vicinity of the Santa Fe rail depot.
Objective 1.4: Consistently market industrial vacancies and new opportunity sites in the City
in order to maintain occupancies at higher than the regional average
Policy 1.4.1: Diversify industrial use mix with a balance of warehousing!
distribution, manufacturing and R&D uses.
Policy 1.4.2: Attract non-polluting light manufacturing and assembly uses to
industrial infill and buffer sites. Examples include high value printing and
publishing, light packaging etc.
Economics Research Associates
ERA Project No. 13718
City of San Bernardino
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Policy 1.4.3: ExpandlInvest in high-speed communications infrastructure to
attract technology oriented users. San Bernardino could launch an "electronic
streets" partnership initiative with communications utilities.
Objective 1.5: Retain and expand the Government/Public Office cluster
Policy 1.5.1: Maintain strong intergovernmental relations with public sector
agencies to be up to date with their needs.
Policy 1.5.2: Attract public sector tenants to occupy historic/adaptive reuse
projects.
Policy 1.5.3: Continue to specialize in regional/district offices focused on very
large Federal/State assets and environmental protection (e.g. USFS; BLH;
NPS; USFWS; CDF; CALTRANS; etc.).
Objective 1.6: Positively define and capitalize on available workforce skill capabilities to
attract new employers.
Policy 1.6.1: Define and market the regional labor force, within commuting
distance from San Bernardino. (30 minutes, or 30 miles radius.)
Policy: 1.6.2: Attract large employers with bilingual labor force needs and
modest skills. Examples include Call Centers and Billing Centers.
Policy 1.6.3: Provide tax incentives and technical assistance to encourage
home based businesses/offices. Target the achievement of 15+ percent of
actual jobs/incomes being located in residences, similar to the evolving
national norm.
Policy 1.6.4: Promote bilingual capacities of the resident labor force as an
asset.
I-
Objective 1.7: Partner with the existing educational
training programs to residents
institutions to effectively deliver job
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Policy 1.7.1: Identify training and labor force needs of oncoming employment
sectors to successfully forge partnerships with both employers and educational
institutions and produce results.
Policy 1.7.2: Provide vocational training opportunities to the younger resident
labor force in conjunction with the Cornmunity College and the University.
Policy 1.7.3: Pursue development of joint incubator projects sponsored/
fostered by CSUSB and SBUC and private entities.
Policy 1.7.4: Partner with CSUSB to create an endowment and attract funds
towards the formation of an engineering school.
Objective 1.8: Expand on historic and the natural (Gateway to the mountains and deserts)
assets to attract recreational visitors. Stimulate hotel occupancies to achieve
performance consistent with the regional market.
Policy 1.8.1: Continue to promote 'identity-building' events. Examples
include 'Route 66', 'Citrus' etc.
Policy 1.8.2: Promote 'Railways' as a part of history/identity. Market the
Santa Fe Depot as a destination with easy connections via the Metrolink.
Policy 1.8.3: Build on the 'Gateway to the Mountains' theme to attract
overnight visitors.
Policy 1.8.5: Seek collection of unique differentiated retailersl"outfitters" and
related services providers as a cluster of specialties which can maintain
market draw and sustain regional reputation (e.g. "mountain stores"; trucking
training; information centers; etc.).
Goal 2:
Identify and attract new employment types/land uses that complement the
existing employment clusters and foster long-term economic growth
Objective 2.1: Build on the Government/Public sector cluster to attract and retain dependent
employment sectors.
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City of San Bernardino
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Policy 2.1.1: Identify specific clusters of economic actIvity to target for
recruitment (e.g. seek additional public and proprietary educational
institutions and technology education).
Policy 2.1.2: Explore potential for attracting next generation of public and
private land resorts technologies and information center functions.
Policy 2.1.3: Attract Federal and private training center functions for SBIA,
including aerial forest fire suppression, regional air marshalls training; airlines
flight crew training; law enforcement aircraft operations training; etc.
Policy 2.1.4: Define the evolution of upcoming services clusters which
interact with governments, and their continuing likelihood of locating adjacent
to governments in the San Bernardino Central City (e.g. legal offices;
accounting/auditing firms; design and engineering firms; finance-insurance-
real estate services firms; etc.). Develop a program to retain and attract such
firms and employment.
Policy 2.1.5: Market hosting capacities for business/public events. (Develop
hotel/motor inn capacities - thematically different from Ontario cluster.)
Objective 2.2: Build on the Health Care clusters to attract and retain related employment
sectors.
Policy 2.2.1: Work with area educational institutions to expand medical
technology education and training programs. Identify programs and facilities
funding sources to commit to such training.
Policy 2.2.2: Explore medical specialties (biomed; biotech; medical devices;
etc.) as part of any Cal State research park proposal. This venture should also
include needs being identified adjacent to the Lorna Linda Hospital complex.
Policy 2.2.3: Consider medical office opportunities as compatible land uses
adjacent to existing heath and educational institutions
Policy 2.2.4: Examine opportunities for concentrating regional forensics
laboratories.
Economics Research Associates
ERA Project No. 13718
City of San Bernardino
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Objective 2.3: Build on the Transportation/Communication clusters to attract and retain
dependent employment sectors.
Policy 2.3.1: Trucking and warehousing opportunities should be allowed by
defining potentially compatible land uses adjacent to prime industrial sites,
especially those with freeway frontages.
Policy 2.3.2: Advocate speed up of funding for completion of the Foothill
Freeway extension to connection with the 215 prior to 2005-2006.
Policy 2.3.3: Fund key surface transportation improvements including new
interchanges along 1-215 in the northwest.
Policy 2.3.4: Improve access from the 1-10 to the Airport Industrial complex
along Waterman, Tippecanoe and Mill
Goal 3:
Prevent retail sales leakage and recapture regional retail expenditure
through key sectors
Objective 3.1: Capture an increasing percentage of the day-to-day shopping needs of the
resident population
Policy 3.1.1: Allow for mixed-use retail residential projects where
appropriate, with a focus on providing community oriented retail on site.
Explore co-development (with lands, advocacy, or marketing efforts) with Cal
State, perhaps using the UC Riverside model which resulted in the University
Village Center.
Objective 3.2: Increase regional retail capture levels commensurate with market area
disposable income
Policy 3.2.1: Look favorably upon, and incentivize developers and tenants
which will draw retail sales from the broader region (without the liability of
state imposed sales tax sharing).
Policy 3.2.2: Place major retail 'name' stores along visible transportation
routes to expand retail sales capture from the larger market area.
Objective 3.3: Identify and expand on recreational/retail opportunities
Economics Research Associates
ERA Project No. 13718
City of San Bernardino
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Policy 3.3.1: Incorporate the Vision 2020: Lakes and Streams to
complement the City's existing strengths.
Goal 4:
Prepare for oncoming economic activities through adequate infrastructure
improvements, sensible planning and a business friendly environment
Objective 4.1: Identify and prioritize infrastructure investments
Policy 4.1.1: Undertake strategic capital improvements planning and
prioritize investments. This will allow development to anticipate the location
and timing of infrastructure improvements.
Policy 4.1.2: Identify and mitigate flood and groundwater up-swell risks to
maximize development opportunities.
Goal 5:
Clearly signal the multiple opportunity locations in San Bernardino for
retail, office, and industrial development
Objective 5.1: Strongly identify the corridors and nodes as development (not
"redevelopment") locations.
Policy 5.1.1: Designate "Prime Properties Clusters and Corridors" (e.g.
SBIA, Southeast Industrial Park, Hospitality Lane, "College Park,"
"Downtown," "Foothill/Northwest," etc.).
Policy 5.1.2: Define the property and entitlement opportunities for each
Prime Property Cluster and Corridor via Internet web page marketing (with
private property owner/developer partners).
Economics Research Associates
ERA Project No. 13718
City of San Bernardino
Page IX.12
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