Redlands has turned into its own worst enemy

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Yes, gross sales are down a bit. There are fewer customers buying $300 earrings, he said, "but the same number spending $20,000 or $30,000 on a ring."

"I just don't think the economy in Redlands is as bad as it is in the rest of the world," he said.

Indeed, much of the money here is the old kind, dating back to the rails and oil, to the citrus groves, to families from Chicago and New York who turned Redlands into their playground 125 years ago, who used "winter" as a verb.

But behind a veneer of diamonds and impeccably preserved mansions with French mansard-roofed towers, Redlands is suffering a crisis of confidence and identity.

Redlands, 65 miles east of Los Angeles, has long served as home to the Inland Empire's aristocracy -- "Beverly Hills before there was Beverly Hills," said Rosemary Herendeen, 70, a retired educator, relaxing outside her 108-year old Victorian home.

The result is a dynamic hive of culture, particularly for a town of just 71,000 people. Redlands has its own symphony, the 101-year-old University of Redlands and the 85-year-old Redlands Bowl, where free performances often begin with a "community sing." Theater and philanthropy thrive.

"So many treasures," said Herendeen, whose home is known to Redlands' architecture buffs as the "Cinderella House" because of its vivid colors.

But by the time City Manager N. Enrique Martinez took office in the spring of 2007, the city's sheen seemed to be fading.

Redlands had operated in the red for five years. Streets weren't getting repaved. Palm trees lining proud boulevards needed a haircut.

"It was the equivalent of leaving out the Christmas lights all year long," Martinez said. "The city didn't have the curb appeal that it once did."

Martinez helped usher in belt-tightening measures, balancing the budget and creating a Quality of Life Department through which 1,300 potholes and sinkholes were repaired in the last fiscal year, among other things. In May, the city took its most aggressive turn yet, hiring John Husing, a respected Inland Empire economist, to take a hard look at the city. The answer, delivered last month, was striking: Redlands can no longer afford its lifestyle.

Redlands, Husing found, has a "conundrum."

The community, he wrote, demands cultural amenities and boutique shopping, as well as a town that invests in older houses, preserves its heritage and maintains open space. But, he wrote, "without significant changes in the Redlands economy, neither its population nor its city government will have the necessary financial strength."

Redlands has, effectively, developed an outdated and oversized image of itself.

Husing noted that the city still has many attractive attributes, including good schools and, along with neighboring Loma Linda, the best-educated workforce in the area.

But the town is not as well-off as many had assumed; its median income ranks 13th out of the Inland Empire's 48 cities, while the median price of recently sold homes ranks it 14th. A fifth of the city's homeowners are believed to owe more than their houses are worth. The crime rate crept up last year.

The town, meanwhile, has a "decaying infrastructure," and the community is sad, Husing noted, about the "the evident aging of the city." Nowhere is that more evident than in downtown Redlands, which has at its spine State Street, one of the more enchanting "main streets" in Southern California.

Redlands has fended off much of the staggering growth of its Inland Empire neighbors in recent years, but the development it has seen has been uneven at best, some have concluded.