Warmer Business Climate Makes Redlands Attractive to Developers

The 113-year-old city of Redlands in San Bernardino County stands out from the average Southern California community with its stately Victorian homes and tree-lined streets, its 94-year-old private university, annual series of music and dance programs and an old-fashioned downtown that looks more like something out of the Midwest than the middle of the Inland Empire.

Redlands, population 67,000, also stood out for a long time because it was tougher on developers than most cities. Winning approval for a new industrial park, office building or shopping center was so enervating that most developers stopped trying years ago.

New industrial buildings, retail stores and other development are underway in Redlands these days, the product of a shake-up on the City Council.

Hershey Foods Corp. is close to finishing construction on a 600,000- square-foot warehouse that will be its Southern California distribution center. Costa Mesa developer Essex Group broke ground in March on an 11-building industrial park. Newport Beach-based Western Realco is in escrow to buy a 207-acre site for industrial development, and the city has a new Home Depot and a new Lowe’s home-improvement center.

According to Karl “Kasey” Haws, one of two new Redlands City Council members who supplanted the no-growth old guard in November 1999, the city’s attitude toward development could hardly be more different.

“It was so difficult to do even a high-quality project that would be beneficial to the community that we weren’t even on the radar screen for many developers,” said Haws, who moved to Redlands 10 years ago from Orange County because he and his wife wanted “a more hometown environment” to raise their children.

Haws and Susan Peppler ran on a pro-growth platform and handily defeated their opponents, former Mayor Bill Cunningham and Geni Banda. In the same election, Redlands voters rejected two anti-growth measures.

Redlands is ready for development because it has pent-up demand after years of little or no new commercial building, said Haws and Redlands Mayor Patricia Gilbreath.

The city also needs to generate more tax revenue, Gilbreath said, and commercial development is one of the few revenue sources available.

Gilbreath and Haws are quick to point out that Redlands is going to grow slowly and will continue to scrutinize development applications to ensure that they conform to the city’s vision of how it wants to grow.

For example, the city is delighted that a household name like Hershey is building a big warehouse in Redlands, Gilbreath said, but the council doesn’t want too many of the “big box” distribution centers on the 2,000 acres available for commercial development in the city.

“We need a mix of different types of development: retail, light industrial, clean industrial and distribution centers,” Gilbreath said.

Redlands is still fussy about what goes where.

When Home Depot first approached the city, the home-improvement retailer wanted to build its store about a block from downtown Redlands. The council quickly rejected that location as too close to the city center, so Home Depot opted for a site half a mile away.

“We want to preserve the character of downtown, and we felt a Home Depot, at that location, was just too close,” Haws said.

Hershey Foods found Redlands appealing because of the city’s “attractive business climate” and its proximity to major customers, said spokeswoman Christine Nelson. The new warehouse will be close to freeways and will be able to draw from a quality labor force, she added.

The warmer Redlands business climate also attracted Essex Group, which broke ground in the spring on a 195,000-square-foot, 11-building industrial park scheduled to be completed this year, said Burrel Magnusson, Essex president. The development is on a 12-acre site along Redlands Boulevard at New Jersey Street.

Essex never would have tried to develop its project under the former city administration, according to Magnusson, who said, “It’s been a long time since anyone built an industrial project of this size in Redlands.”

Essex is in escrow to sell one of its 11 buildings, has an offer on another and has letters of interest on four others, Magnusson said--an indication of the strong demand for industrial space in Redlands.

Another developer drawn to Redlands is Newport Beach-based Western Realco, which is in escrow to buy about 207 acres of Union Pacific Railway land north of the 10 Freeway.

Western Realco hopes to develop mid-size industrial buildings at the site initially, later adding some small “incubator” spaces of about 5,000 to 10,000 square feet, said Gary Edwards, the company’s vice president. Eventually the site might include some office and retail space.

To encourage other businesses and developers, Redlands may hire an economic development director. Haws isn’t worried that the move will attract a flood of builders.

“We want lots of competition for the development space that’s available so that we can choose the projects that are best for the city,” he said.

Haws said developers will find frankness in dealing with Redlands.

“We don’t horse around,” he said. “We give very clear indications, very early on, about what we think would be in the best interests of the city.”

Pending developments also include remodeling the Redlands Mall, to be renamed Redlands Promenade, according to Harrick Johnson, a broker with Lee & Associates who moved to Redlands in 1991 because it reminded him of his native Midwest.

“I think the City Council recognizes that it’s time to make the transition to more of an industrial community,” Johnson said.

Total industrial space has remained virtually unchanged at about 4.7 million square feet for years, according to Johnson, who is marketing the Essex industrial park.

While encouraging industrial development, Redlands also wants to preserve its heritage as a center of citrus farming, which once dominated the area.

The city has acquired about 100 acres of citrus groves over the years and leases the land to contract farmers.

It’s a way to preserve the heritage and provide buffers between new commercial developments and established parts of the city, Gilbreath said.