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    Vaupel: Job Growth Creates Retail Growth
    April 30, 2015

    GlobeSt.com

    By: Geoffery Metz 

    SAN BERNARDINO COUNTY, CA—With a busy port leading widespread job creation at one of the highest rates in the country, it’s not surprising that retail developers are seeing opportunities here. GlobeSt.com met EXCLUSIVELY with Larry Vaupel, economic development administrator of San Bernardino County Economic Development Agency, to get the GlobeSt.com Thought Leader's take on these dynamic changes taking place in advance of the ICSC RECon ’15 show.

    GlobeSt.com: Can you describe the economic environment in San Bernardino County this year?

    Larry Vaupel: The County is experiencing tremendous economic growth as our unemployment rate has now dipped below the state average and incomes are starting to rise. Our home values are beginning to recover and industrial, commercial and office vacancy rates continue to fall. In fact, our retail vacancy rate at our regional shopping centers averages around 4%.

    GlobeSt.com: What factors are driving this momentum?

    Vaupel: The last three years of economic recovery has created over 150,000 jobs in our region. This rate of job growth is unprecedented. Our region has become a leader in terms of job creation in the US. The jobs have been created across multiple sectors, so this is a diverse recovery across our economy. 

    GlobeSt.com: How has the retail sector been affected by improved fundamentals within the County?

    Vaupel: Job growth creates more disposable income. Our retailers and restaurants are the primary beneficiaries of these improving economic conditions. I believe we also had a pent-up demand for new retail that did not keep up with our residential growth that occurred prior to the end of the last business cycle.

    GlobeSt.com: What types of tenants are choosing to expand within the County?

    Vaupel: According to local brokers, there is a flight to quality as retailers are being more selective about space and location requirements. Well located, quality properties are seeing a significant amount of strong national tenant activity. A great example is Majestic Realty’s Mountain Grove. Opening this summer, this 67-acre lifestyle and entertainment development is adjacent to Majestic’s successful Citrus Plaza retail center in the City of Redlands. Some of Mountain Grove’s key tenants include Nordstrom Rack, TJ Maxx, HomeGoods, 24 Hour Fitness, Banana Republic, among other national retailers.

    GlobeSt.com: How does this drive development or re-development?

    Vaupel: The vacancy rates at newer regional and in-line centers are in single digits. The older centers that are experiencing the larger vacancy rates need an infusion of capital for improvements. Many of these centers are in the right trade areas, but they have become obsolete for most end-users. I think these centers provide some good opportunities for developers willing to invest in the improvements needed to attract today's retailers. One example is the redevelopment planned for Montclair Plaza. CIM Group, which acquired the retail property located in the City of Montclair, has already commenced plans for revitalizing the regional mall and is focused on creating a place where people want to spend their free time to dine, shop, and be entertained. The owner is reported to be bringing in more restaurants, creating an open air component, adding a movie theatre, and is looking to add other entertainment draws.

    Another highly popular County retail center is also kicking off a renovation. Victoria Gardens is a 1.5 million square-foot, open-air, regional town center located in the city of Rancho Cucamonga. The renovation will include the refurbishment of exterior building facades, the widening of sidewalk areas to accommodate new outdoor patio dining, the introduction of parklets, as well as a newly designed plaza area, which will include a street art program.

    GlobeSt.com: What will be your biggest objectives at ICSC this year and what is the main message you want to convey to attendees?

    Vaupel: I think the main message is that San Bernardino County's economy is hitting its stride and beginning to expand well beyond pre-recession levels. Our rate of job growth is above 4% and we are helping to maintain California's status as an economic powerhouse. At the same time, the inland region offers affordable development opportunities that cannot be found in the coastal areas of California.

    Please visit the County of San Bernardino booth at RECon at S3815.
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