Business Follows New Residences : Temecula/Rancho California commercial, industrial area grows along with homes.

The same qualities that attract 10,000 new residents a year to the Temecula/Rancho California area also draw business and industry.

Many business owners enjoy the semi-rural atmosphere enough to move themselves and their companies to town, said Michael Strode, a Rancon Real Estate broker. “A lot of people come out here because they bought a house first,” he said.

Channell Commercial Corp. moved its headquarters and plant from Glendora because owner William Channell wanted to escape the smog, said Gary Baker, chief financial officer.

The so-called “Temecula trade winds” keep the air clean and the temperature lower in the valley. Employees of the cable television equipment manufacturer can also find more affordable housing, he said.

Other business owners consider the life style so appealing they want to put the area on the map as a “destination resort,” instead of a stop between Riverside and San Diego. The community now has as many golf courses as it does traffic signals--three. Husband-and-wife developers Bill and Tish Johnson said plans by their firm and other companies for more golf courses and resorts should attract tourists and conventions.

Croquet and Winery

That’s exactly what Pacific Union Co. has in mind with “The Wickets,” a $25-million resort complete with croquet court and winery. Plans for the 75-acre site include a 135-room hotel and 40 acres of grapes, said Phil Baily, a local wine maker who sold the property.

The San Francisco-based real estate firm plans to begin construction next year at the corner of Calle Contento and Rancho California Road.

Temecula’s 11 wineries are among the area’s major attractions. About 75,000 people visit the wineries annually, said Beverley Ashbrook, president of the South Coast Vintners Assn.

The area’s major developer, Bedford Properties, is grading land for a Quality Suites hotel that will cater to both tourists and business travelers, said Bill Bopf, vice president. Across Rancho California Road, Bedford has plans for two four-story office buildings.

An even taller office building is planned for the western stretch of Rancho California Road. The Crystal Ridge Professional Center is a six-story hexagonal building on a hillside with a sweeping view of the Temecula Valley. The proposed structure needs special approval, because it exceeds local height limits and said Jon Head, president of Preferred Equities Development Group.

Light Industry Moving In

A lot of office space is already under construction but seems to be renting rapidly, said Kathie Gray, a leasing agent at Judy Rosen & Associates. Several medical groups are considering the area, she said.

Light industry, including high-tech firms, medical research and supply companies, is also moving in. A few years ago, most users were very small companies, but now bigger corporations are arriving because of the larger labor force, she said.

Major industry is more likely to wait another year or two, said Ron Douglas, president and chief executive officer of Rancon Financial Corp., a locally based real estate development and investment firm.

Rancon’s area business parks still have much more demand for small business sites of an acre or two, he said.

Larger companies are waiting to see the population increase a bit more, he said. However, the area’s central location and good freeway access to major Southern California cities and airports are particularly important to big companies that have extensive shipping and travel needs.

12,000 Manufacturing Jobs

Area leaders want to attract major corporations to provide more jobs so more residents can work close to home, instead of commuting, as 62% of workers now do.

Rancon wants to reserve some 20-acre sites for eventual sale to large users in Rancon Business Center, a 590-acre project scheduled to begin construction this fall. The center is expected to eventually have 12,000 jobs in manufacturing, office, retail and distribution areas.

Another major mixed-use center, planned by the Johnsons, is the 450-acre Rancho California Civic Center along Winchester Road.

Tenants and buyers are flocking to existing business parks, even though rents are sometimes not much lower than San Diego County, said Coldwell Banker broker Allen Nunez. However, wage and utility costs are less, he said.

Prices Skyrocketing

In the first six months of 1989, about 400,000 square feet of new industrial space was absorbed. About 40% of the space went to San Diego firms, and the rest mostly to Orange County companies, he said.

Such demand means land prices are skyrocketing.

That worries some observers, including Andy Chang, a RE/MAX broker. Continued growth “depends on how low we can keep our land prices,” he said.

Developers are having to move to the outskirts of town to find reasonably priced land. Even foreign investors have heard of the area and want to buy. Chang said parcels that sold for $10,000 an acre less than two years ago now sell for $20,000 or more an acre.

Buyers eager for a quick return on their investment are rushing to buy property before it appreciates even more.

“I have more clients that I know what to do with,” said Dan Goldberg, an industrial real estate specialist with WestMar Commercial Brokerage.

Besides small industrial users, Goldberg also has lots of requests for fast food and gas station sites. Like the housing market, the small-industrial market has virtually no available inventory, and businesses may have to wait several months for space.

Not only real estate firms but associated businesses like engineering companies and escrow firms are booming. However, until recently, shopping and services were in short supply. Residents drove to Riverside or San Diego to shop.

But the word is out, and the Riverside County Planning Department gets frequent calls from chiropractors, dentists and merchants eager to do business in the fastest growing part of the county, said Dick Archibeque, supervising planner.

Demand for retail goods and services means new businesses don’t have to fight for customers.

When Target opened a store in the Rancho California Town Center last February, “Our major challenge was shipping merchandise in there as fast as it was going out the front door,” said spokesman George Hite. Opening sales volume was 30% to 40% higher than expected.

Town Center developers plan to open its 550,000 square feet gradually, starting this year and finishing in 1992. However, response was so strong the schedule was accelerated, and its last section will open next year, said Ronald Hahn, co-owner of San Diego based LandGrant Development. LandGrant and the Johnsons are joint-venture partners on the project.

“It was surprising to us because everybody assumed the growth would come from San Diego and take more time,” Hahn said. “It’s still coming from San Diego but now it’s predominantly Orange County and Riverside County.”

Hahn said the biggest demand is for food establishments. With so many new homes, home furnishing stores and nurseries also do well.

More shopping centers are on the drawing board and work is under way on an auto mall. Bedford plans to open the 450,000-square-foot Palm Plaza next year at Winchester and Ynez roads. Future tenants include K-Mart, theaters, a supermarket, home-improvement and clothing stores.

Bedford has an agreement with shopping center developer Melvin Simon for a regional mall with major department stores near Palm Plaza, but faces competition from other developers with similar proposals for nearby Wildomar and Lake Elsinore.

All that money in the air has also attracted several new banks, with First Interstate opening this summer and Wells Fargo planning to join the other majors by opening a branch next spring.