Walls Street Journal05/12/04TIME FOR A CHANGE By RAY A. SMITH Staff Reporter of THE WALL STREET JOURNALPaul Hofer III, one of the owners of the Hofer Ranch in California’s booming western Inland Empire, is learning — like his ancestors — to adapt to the land.Back in 1882, his great-great grandfather, Iowa farmer Sanford Ballou, bought about 75 acres of land in California from Southern Pacific Railroad. After trying unsuccessfully to grow corn, wheat and cotton — crops his family grew in Iowa — he learned he had to adapt to his new surroundings. So the Ballous followed other farmers in the area: growing apricots, peaches and grapes for raisins, and eventually expanding to wine grapes, which became the family farm’s dominant crop.More than a century later, Mr. Hofer is in the midst of a similar adapting of sorts. Surrounded by sprawling office buildings, industrial warehouses, and air-cargo facilities, the Hofer Ranch, which his family continues to farm, is fast on its way to becoming just like its neighbors.Last month, the Hofer family and Dallas real-estate developer Hillwood, whose chairman is Ross Perot Jr., son of the former presidential contender, submitted applications for entitlements for the right to build on the remaining half of the 135-acre site, according to John Magness, vice president of Hillwood Investment Properties, a division of Hillwood. The ranch is the largest contiguous piece of undeveloped real estate in the Inland Empire, a region located east of Los Angeles. (Entitlements for the other half of the property were granted in 1996.)Among the ideas for the site, which is adjacent to Ontario International Airport and very near railways: air-cargo facilities; manufacturing, distribution and logistics buildings; some office and retail space; and the preserving of as much as 30 acres of the existing vineyards and the homestead — including a barn and the original turn-of-the-century farmhouse, where Mr. Hofer still lives. Mr. Hofer says he wants to have a research vineyard there, too.This week, Hillwood and the Hofer family plan to announce the tapping of Los Angeles-based commercial real-estate services firm CB Richard Ellis to market the proposed developments to potential tenants. “This just confirms how Ontario [the city where the ranch is located] is maturing,” says Jay Dick, a first vice president at CB Richard Ellis, who is leading the marketing effort, referring to the urbanization of what was once primarily vineyards and dairies.Adapting is bittersweet for Mr. Hofer, 56, who has lived all his life on the farm. “The day the vineyards are pulled out, that’s going to sting,” he says. “It’s time, though. We’re realistic. We realize there needs to be a change. Farming the land isn’t economically viable anymore.”Mr. Hofer adds that keeping the homestead intact was “an important thing to everybody in the family.” Once complete, the site will likely be the first so-called mixed-use development to include a farmhouse and barn.