News Article | 3/21/2007

Desert BNSF yard would mean more jobs

Location, location, location.

Major freeways coupled with close proximity to airports has solidified the Inland Empire’s position of being a jobs hub mainly for the logistics sector.

And the outlook to continue that trend is good given the recent news that an intermodal facility may be on its way to the former George Air Force Base in Victorville and ongoing development of the former Norton Air Force Base in San Bernardino.

“Our geography is our destiny. It’s through here major railroads flow. It’s through here major highways connect to the markets of the East,” said Bill Carney, president and CEO of the Inland Empire Economic Partnership. “We’ll just see more of it moving farther out into the High Desert, Victorville and Barstow.”

Land available at a less expensive price along with a work force pushed inland from coastal areas due to rising home prices make the Inland Empire attractive for companies.

The logistics industry – which deals with the shipping of goods – provides a replacement for the blue-collar jobs lost in recent decades with the closure of air bases and the virtual disappearance of manufacturing.

Not only is the industrial market growing but office space and commercial real estate is strong in the region, said Karin Weddig Durant, vice president of economic development for the Inland Empire Economic Partnership.

Businesses are following the rooftops and their clients, she said. The region boasts the second-lowest vacancy rate in the nation in office space and is the national leader in construction activity in the industrial market, she said.

International trade in the Inland Empire was a $17.5billion industry in 2005, she said.

The economy remains strong and the potential tremendous because of the expected continued growth of international trade through the twin ports of Long Beach and Los Angeles, Carney said.

New jobs for Victorville

The proposed rail yard could make the High Desert a major draw for the warehousing, trucking and shipping businesses that have mainly been sprouting in places such as San Bernardino, Rialto, Fontana and Mira Loma.

Victorville agreed with BNSF Railway in January to explore building an intermodal facility on about 300 acres on the eastern side of Southern California Logistics Airport, formerly George Air Force Base.

An intermodal yard is where big shipping containers are moved from trains to trucks.

Despite success so far in luring businesses to the former fighter base, lack of an intermodal yard has caused the airport to lose some businesses that had considered moving there, said Jon Roberts, Victorville city manager.

Once a formal deal is drafted with BNSF, the yard could be open by 2009 or 2010, officials said.

Full development of the logistics airport could eventually generate 20,000 well-paying jobs, officials estimate.

Stirling Enterprises is the private developer working with Victorville to develop the 3,500-acre airport area.

The proposed yard itself won’t provide that many jobs, but that’s not as important as what it will mean in the bigger picture.

“It will make it possible for logistics companies to start moving up there in significant numbers,” said John Husing, a Redlands-based economist who specializes in the Inland Empire. “There was a reluctance for logistics firms to go up the Cajon Pass.”

A hub for shipping

The explosion in international trade is driving the growth of shipping, known as logistics, and the Inland Empire is literally at the crossroads of goods moving to the rest of the country.

BNSF officials said they envision the proposed Victorville yard as handling mostly domestic trade, but expansion is needed throughout the entire shipping industry.

The railroad’s intermodal yard in San Bernardino is at or near capacity after a nearly 40percent increase since 2001.

In 2001 the yard did 410,000 “lifts,” which is moving one container from a train to a truck or vice versa. In 2006, the yard did 569,000 lifts.

And the ports of Long Beach and Los Angeles, which already handle 40percent of the nation’s imports, have seen container traffic grow by 50percent in the same five-year period.

“Looking at 10 to 20 years down the line, you look at inland intermodal facilities as an important link,” said John Pope, spokesman for the Port of Long Beach.

This comes as San Bernardino International Airport, formerly Norton Air Force Base, continues its redevelopment, focusing on big distribution centers, and March Air Reserve Base near Riverside moves toward becoming an inland port.

“This is a great time to be in San Bernardino. The economy has never been better,” said John Magness, senior vice president of Hillwood Investment Properties.

Hillwood is developing AllianceCalifornia, a 2,000-acre trade and logistics center, in and around the former Norton Air Force Base in San Bernardino.

Although the housing market has slowed, homes are still being sold, just not as rapidly. Retail sales are up, the consumer price index is steady, and there’s a low unemployment rate of 4.5 percent, Magness said.

Since conversion of the air base started in 2002, Kohl’s, Mattel, Pep Boys, Medline and Pactiv have created 1,500 new jobs plus 500 more in construction jobs. With the addition of Stater Bros. Markets and roughly 300 acres left to develop, that only means one thing: more jobs to come.

“In San Bernardino, we’re in the largest peacetime construction effort the city has ever seen,” Magness said.

“You have an aggressive city that wants new jobs. You have San Bernardino at the crossroads of the logistics industry with freeway and rail and air crossing through this area and a very robust labor force here.”

Local projects

The following are projects that local officials hope will boost economic development in the region:

“Looks can be a little bit deceiving.”

That’s what San Bernardino Associated Governments spokeswoman Cheryl Donahue said when asked about the progress on the Interstate 210 extension.

It may look almost ready, but there’s still a lot to be done, including electrical work, lighting, signage and painting, she said, adding that Caltrans might spend a couple months giving its approval to open the freeway.

Next week, paving will begin between Pepper Avenue and State Street, Donahue said.

There’s still no opening date set, but it will be done by the end of the year, she said.

The new east-west route will not only help relieve congestion on Interstate 10 and on local surface streets, but it will feed economic growth in Rialto and San Bernardino, Donahue said.

Commercial growth continues to transform the “doughnut hole,” the increasingly developed pocket of county land in northwest Redlands.

There’s no more space for newcomers at the largest shopping center, Citrus Plaza. City of Industry-based developer Majestic Realty Co. announced in January that the last parcel of land at the 530,000-square-foot shopping center had been leased and is set to become the site of a new gas station and car wash.

But Majestic Realty’s not done with the doughnut hole. The firm is advertising space at the Mountain Grove at Citrus Plaza shopping center, which the company plans to build north of the Citrus Plaza center.

Redlands-based House Land Development Co. also has a hand in developing the doughnut hole. That company is behind the Palm Grove shopping center, which is under construction just west of Citrus Plaza, on the other side of Alabama Street.

Developer Charles House said the 252,000-square-foot Palm Grove center will be completed by the end of the year. One highlight, he said, is a 65,000-square-foot building that will combine Toys `R’ Us, Babies `R’ Us and Kids `R’ Us stores under one roof.

House said that the groundbreaking for that component of the shopping center is scheduled to happen today.

San Bernardino International Airport: The former Norton Air Force Base now is home to manufacturing companies Video King Gaming Systems Inc. and Magneto-Inductive Systems Limited (USA), employing over 100 people.

Hillwood Investment Properties is developing AllianceCalifornia, a 2,000-acre trade and logistics center in and around the former base. There are 4.5 million square feet of new buildings there that house Kohl’s, Mattel, Pep Boys, Medline and Pactiv, creating 1,500 new jobs plus an additional 500 construction jobs.

More jobs will be created once Stater Bros. opens its headquarters and 300 remaining acres are developed.