Once a Smokestack City, Torrance Changes With High-Tech Times

Times Staff Writer

An ongoing recycling of land once occupied by heavy manufacturing is redefining the city founder's dream of creating a "Modern Industrial City."

Jared Sidney Torrance, a Pasadena financier, built this town in the early part of the century by luring several major heavy industries, including Union Tool Co., Llewellyn Steel Co., Pacific Electric Railway and Pacific Metal Products Co.

They are all closed now, but in their place stand such new industries as Toyota Motor Sales USA Inc., Epson America Inc., American Honda Motor Co. and several other Pacific Rim businesses, primarily Japanese, scattered throughout various industrial/business parks.

"I've said that the city would develop westward until we reached the ocean and then we would flip back and recycle the east side where the city first started," said two-term Councilman Bill Applegate, a real estate and investment broker. "Well, that's what we are doing now."

Cost of Housing

The west side of Torrance, particularly along Hawthorne Boulevard, is overflowing with financial and retail establishments that have made the city government one of the healthiest financially in the state. And because interest in living in Torrance is high, prices of houses have jumped to an average of $129,000; some are as high as $500,000.

Now it is industry's turn for change. Real estate and business observers say there are several reasons that Torrance is successfully changing its industrial face:

- Good cooperation with industries by local government.

- The city's location between a major airport and a port.

- A good labor pool for both management and unskilled workers.

- A reputation for good housing and schools and low crime.

- Available industrial land that has become too expensive for heavy manufacturers but ideal for high-tech uses.

Change of Emphasis

Already more than two dozen companies have their national headquarters in Torrance. For a long time it called itself "The Headquarters City." Complaints from residents that the city has been too pro-business, however, encouraged city officials last year to reword the logo to "A City in Balance."

Toyota Motor Sales USA Inc. completed its $100-million headquarters complex in 1982 on 42 acres on Western Avenue and 190th Street that had been a parking lot since 1970. Epson America Inc., which manufactures computers and printers, established a small headquarters in Torrance in 1975. It now occupies several facilities throughout the city.

In the early 1970s, U. S. Steel converted part of its plant along Western Avenue near Torrance Boulevard into a large industrial park. U. S. Steel later sold that property to several independent developers who lease out the space primarily for light manufacturing and warehouses.

Good Place to Live

"There is tremendous growth potential here, and with its housing and schools, Torrance is a very desirable place to live and work," said Minoru Kinoshita, an Epson vice president.

Early in the century, it was low property values that attracted industry from downtown Los Angeles to Torrance, then nothing more than farmland.

A 1914 real estate brochure boasted of a "Modern Industrial City" and displayed a picture of the Union Tool Co. with its smokestacks emitting black fumes.

In the early 1920s, oil was discovered in Torrance and business boomed. According to the book "Historic Torrance," post office receipts, a leading economic indicator of that time, increased 68% from 1920 to 1921.

Business was going so well that residents feared that Los Angeles would try to annex the new town, and it incorporated (by a vote of 355 to 11) on May 12, 1921, with a population of about 1,800. It now has more than 133,000 people. The city's industries thrived, particularly during the two world wars when steel production was at a peak. The large number of workers attracted housing developers and retail businesses.

Growing Noise

The houses were built to the west of the factories so prevailing winds would blow the smoke away from them. But as industry grew to the north and south, Torrance's growing bedroom community began complaining about noise and pollution from factories.

That, together with a decline in the demand for the city's industrial products and more economical production elsewhere, led to the decline of Torrance as a heavy-manufacturing city by the mid-1970s.

But it marked the start of a new modern industrial city. Rather than decry the trend, the business community welcomed the closures of heavy industries.

"They are blessings in disguise," said J. Walker Owens, executive vice president of the Torrance Area Chamber of Commerce. "We're having plants with 600 or 700 employees shut down, but we're getting in new ones with upwards of 3,000 new jobs."

The latest shutdown was in February when National Supply Co., which opened in Torrance 75 years ago as Union Tool, stopped production of its oil drilling products.

Industrial Park

When it closed, National Supply was down to about 100 employees at its plant on Western Avenue and Carson Street, from a peak of 1,000 in 1981. Negotiations for the sale of the 39-acre facility--with an asking price of $22 million--are continuing, but city officials expect a large industrial/business park to go up.

City Planner Mike Bihn said that whatever is built there will probably provide as many as 1,100 jobs.

American Honda is constructing new headquarters on part of the former U. S. Steel site on Van Ness Avenue near Del Amo Boulevard. It is expected to provide more than 3,000 jobs by 1990 when it is completed. Honda is building a data processing center, a corporate service center, a parts distribution center and office space that will total more than 1.4 million square feet at a cost of nearly $150 million.

Last month, city officials completed a $27-million financing deal with American Honda that allows the Japanese auto maker to expand its headquarters southward onto a 25-acre area while helping the city clean up what officials consider a blighted area.

Development of that 25-acre area is a key to development of the entire east-side industrial area, city officials say, calling it a "bridge and a catalyst for more expansive redevelopment."

Millions in Tax Revenue

Over the next 30 years, Honda is expected to generate more than $40 million in tax dollars that the city will pump back into the area. In addition, the city expects the number of jobs per industrial acre in that area to double from its current 15 per acre. Blue-collar jobs are expected to decrease in favor of professional positions with high salaries, such as computer programmers, engineers and managers.

The Honda deal--like one made in 1911 between Jared Torrance and the Union Tool Co., in which Torrance agreed to sell Union Tool 25% of the stock in his Dominguez Land Co. to lure that company to his fledgling town--is the type of city cooperation that has made it mutually beneficial for business to locate here.

James Wadsworth of W & B Commercial Properties Inc. of Santa Monica, which is building a 1.1-million-square-foot industrial/business park in Torrance, said: "We have found them (city officials) to be pro-growth when it is done in a responsible manner. They try to work things out. We have found the planning staff and elected officials to be reasonable people. They listen."

"It has been a good balance between good government and good citizenship," said Owens. "We have a good city government that, although it does not give away the company store, is reasonably pro-business."

Not Coming Back

"There may be people who long nostalgically for the union hall, for National Supply, for U. S. Steel," said Mayor James Armstrong. "Well, they are not there any more and they are not coming back. We have a commitment to not let downtown run down."

The city government took its first major step toward revitalization two years ago when it made a 292-acre area on its downtown east side--which includes the National Supply and Honda properties--a redevelopment project. The area remains much as it was when it was developed in the 1920s as the industrial backbone of the city, with narrow streets that often lack curbs or gutters.

The city has identified 24 badly needed public works projects--building storm drains, installing sewer lines and pumps, putting high-voltage power lines underground, repaving streets. The projects, which will cost more than $7 million, will be paid out of property- and sales-tax dollars from businesses in the redevelopment area.

The plan calls for converting the land to uses that will "not produce excessive smoke, dust, odor, noise or vibrations and which are compatible with adjoining neighborhoods and commercial areas."

'Most Significant'

A city staff report calls the project "one of the most ambitious and perhaps one of the most significant undertakings in the city's history. It is likely to affect the growth, economic stability, employment base and vitality of an area far beyond the actual project area boundaries."

Owens of the Chamber of Commerce likes to say that there are three reasons for that growing vitality: "Location, location, location."

"The city's primary appeal is that it is equidistant from the airport and the harbor," said Jim Hammond, who specializes in the sale and leasing of industrial land for Coldwell Banker. "There are high- and low-end residential areas nearby and a strong retail and financial base."

"Torrance remains an active industrial area that is popular with the Japanese business world, said Epson's Kinoshita. "Its being near LAX makes it convenient to travel back and forth from Japan."

Willie Tokishi, a Honda spokesman, said his company moved to Torrance because the land was available and the quality of life was in harmony with the corporate philosophy: to make the home and workplace desirable. "We think it is a nice place to be," he said.

Rising Property Values

Also contributing to the changing city landscape has been a steady rise in property values. Ten years ago, industrial land sold for about $1.50 a square foot, real estate dealers say. Today that same land sells for about $15 a square foot. In the same period, rents have increased from 12 cents a square foot to nearly 50 cents a square foot for light-manufacturing and warehouse uses, and from less than $1 a square foot to about $2 a square foot for industrial office space.

"The price of land and the type of construction here make it very limited for (heavy) industrial uses," said Wadsworth. W & B in 1983 paid $18 million for 63 acres (and another $7 million for improvements) on a site where Union Carbide once manufactured plastic.

Manufacturing continues in Torrance, although most of it is light. Union Carbide produces latex, but its three facilities in Torrance are primarily distributors for products manufactured in other plants. Rubbercraft Corp. of California continues to manufacture industrial rubber products at its facility on 220th Street, as it has for 60 years.

The Mobil Oil refinery on 190th Street remains the city's largest heavy manufacturer and annually provides the city coffers with more than $3 million in taxes, primarily the utility users tax.

Reynolds Aluminum, which operates canning and extrusion plants in Torrance, is becoming a part of the changing industrial Torrance by subdividing some of its property along Crenshaw Boulevard to sell for industrial office space.

$266 Million in Sales

Coldwell Banker Commercial Real Estate Services said last year that its South Bay office handled $266 million in sales and leases. Del Stanton, Coldwell Banker's South Bay office manager, said the vacancy rate for industrial space is about 6%, and he predicts little new construction of that type this year because of the "scarcity and high cost of industrial land. We look for existing buildings to increase in value with vacancies continuing to shrink."

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