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HomeMy WebLinkAbout1996/01/31 - Agenda Packet - Adj CITY OF RANCHO CUCAMONGA y PLANNING COMMISSION AGENDA WEDNESDAY JANUARY 31, 1996 7:00 P.M. ADJOURNED MEETING RANCHO CUCAMONGA CIVIC CENTER COUNCIL CHAMBER 10500 CIVIC CENTER DRIVE RANCHO CUCAMONGA, CALIFORNIA I. Pledge of Allegiance II. Roll Call Chairman Barker Commissioner Melcher Vice Chairman McNiel Commissioner Tolstoy Commissioner Lumpp III. Announcements IV. Public Hearings The following items are public hearings in which concerned individuals may voice their opinion of the related project. Please wait to be recognized by the Chairman and address the Commission by stating your name and address. All such opinions shall be limited to 5 minutes per individual for each project. Please sign in after speaking. A. COMMERCIAL LAND STUDY DISCUSSION (Continued from January 24, 1996) V. Public Comments This is the time andplace for the general public to address the Commission. Items to be discussed here are those which do not already appear on this agenda. VI. Commission Business VII. Adjournment The Planning Commission has adopted Administrative Regulations that set an 11:00 adjournment time. If items go beyond that time, they shall be heard only with the consent of the Commission. l, Gail Sanchez, Planning Commission Secretary of the City ofRancho Cucamonga, hereby certiJ52 that a true, accurate copy of the foregoing agenda was posted on January 25, 1996, at least 72 hours prior to the meeting per Government Code Section 54964.2 at 10500 Civic Center Drive, Rancho Cucamonga. / CITY OF RANCHO CUCAMONGA STAFF REPORT DATE: January 24, 1996 TO: Chairman and Members of the Planning Commission FROM: Brad Buller, City Planner BY: Miki Bratt, AICP, Associate Planner SUBJECT: COMMERCIAL LAND STUDY DISCUSSION ABSTRACT: The next step in the City's Commercial Land Use study is to develop realistic Long Term Goals and Policies, Short and Mid-Term Strategies, and Near Term Actions. A. Lonq Term Goals and Policies: The following actions are proposed: Amend General Plan Goals and Policies on Commercial Development · Amend zoning codes to comply with ~'evised General Plan · Establish an absorption strategy to maximize development of our commercial land base While there is consensus in supporting retail development to capture sales tax dollars, there are differences about where, when, and to what intensity. Also, while the market study stated that there is ample commercial land in the City, there continues to be pressure to add retail uses on property not currently zoned for those retail uses. If the Planning Commission and the City Council ultimately agree with the findings of the market study, the most difficult remaining long term questions are where and how to reduce the amount of existing commercially zoned property to achieve the land use and fiscal balance suggested by the study. In light of the above, amending the General Plan is expected to occur over the longest time period. However, where there is consensus and as opportunities arise, goals and policies may be incorporated into the General Plan, either as part of land use actions or as part of the next overall General Plan update. B. Shod and Mid-Term Strateqies: · Continue to facilitate development and redevelopment of existing commercial zoned property · Look at ways to "make it happen" while maintaining the City's standards PLANNING COMMISSION STAFF REPORT COMMERCIAL LAND STUDY DISCUSSION January 24, 1996 Page 2 The City Council and the Planning Commission have continued in their actions over the last three years to address this very important issue of commercial land development. Both the City Council and the Planning Commission know the fiscal and service needs of the community and have worked to make changes that will be best for the development of our City. Adoption of the General Dynamics Specific Plan and land use changes along Foothill Boulevard within Terra Vista and on the Masi site, as well as the actions to streamline the development review process and the preparation of the Commercial market study, demonstrate the City's interest in this topic. Staff is convinced that with the support of the City Council and Planning Commission and the involvement of the community over the next several months, strategies will be refined and implemented. One such strategy would be to make minor revisions to subarea texts within the Industrial Area Specific Plan to add compatible retail uses along with conditions which would ensure future compatibility with adjoining industrial uses. C. Near Term Actions: Staff has completed a preliminary analysis for a number of site-specific policies and decisions which are pending, including the following (see attached Vicinity Map): 1. Fourth Street North of the Ontario Mills Project 2. Fourth Street and Archibald 3. South Side of Foothill - Haven to Rochester 4. Addition of Automobile Sales to Industrial Area Specific Plan Subarea 8 5. Southern California Edison Corridor/Surplus Land - Rezone 6. 1-15 and Foothill Boulevard Node 7. 1~15 and SR 30 Interchange area D. Preliminary Analysis of Site-specific Policies/Actions: Following is a preliminary analysis of the above mentioned specific sites. 1. Fourth Street North of the Ontario Mills Proiect For Industrial Area Specific Plan (ISP) Subarea 12, staff concurs with market study finding in support of adding retail uses as soon as possible. Existing permitted and conditionally permitted uses include restaurant, automobile sales, and hotel. Staff supports ISP text change rather than General PlanliSP District Amendments. One possibility would be to add a new ISP Use Category, "Master Planned Commercial Development," with specific guidelines requiring compatibility with surrounding industrial uses. Intended major tenants for Subarea 12 would be Big Box and Outlet/Off Price retailers. Development would be conditioned upon adequate access and buffering from surrounding industrial. Industrialtruck circulation and potential automobile conflicts will need to be addressed to ensure compatibility. ,: PLANNING COMMISSION STAFF REPORT COMMERCIAL LAND STUDY DISCUSSION January 24, 1996 Page 3 2. Fourth Street and Archibald In conjunction with the Griffin Homes residential application, this area is being considered for Neighborhood Commercial. Staff concurs with the market study finding that Neighborhood Commercial retail is directly related to an adequate number of surrounding residential units. Therefore, a Neighborhood Commercial land use at this location must be a considered in conjunction with the proposed residential development. 3. South Side of Foothill - Haven to Rochester Wohl Investment is requesting a Planning Commission workshop to resolve design issues and to go forward with their "Good Guys" development. (See attached letter to the Commission, dated January 8, 1996). The market study identifies the vacant land on the south side of Foothill as "reserve" Commercial. During both the City Council and Planning Commission reviews of the market study, concerns were expressed with unlimited retail development on the south side of Foothill Boulevard. One concern was the potential for a chain reaction of zone change applications leading to strip development, a condition which would be in conflict with the General Plan. The retail issue could be approached through an ISP text change similar to the one suggested for 4th Street requiring a "Master Planned Commercial Center" specifying certain conditions for development including compatibility with surrounding uses, as well as adequate access, circulation, and buffering. The Masi project provides a precedent, as well as experience with potential pitfalls. A Development Agreement could address other issues. For example, deal points could require a guarantee of sales tax revenue and could require construction of all major elements as the first phase, including specified signed anchor tenants, for a proposed "Master Planned Commercial Center." The Development Agreement could serve in lieu of a General Plan Amendment. Precedent for a Development Agreement on the site was set by a Development Agreement which resulted in construction of only the hotel element. Further, approval of the Development Agreement could be tied to project development approvals which would fit with Wohl's expressed time constraints. Additional guidelines for Subarea 7 could emphasize that the focus of commercial development on the south side of Foothill is business park/office development. 4. Addition of Automobile Sales and Leasinq to Industrial Area Specific Plan Subarea 8 Plies Investments is requesting an ISP text change for Subarea 8 which would permit automobile sales on freeway adjacent sites. Issues include availability of undeveloped freeway adjacent sites which permit automotive sales in more appropriate locations, compatibility with surrounding land uses, access, and signs. Affected properties include developed and vacant parcels. Further discussion of the Plies' request may be found in the staff report on this Planning Commission Agenda. PLANNING COMMISSION STAFF REPORT COMMERCIAL LAND STUDY DISCUSSION January 24, 1996 Page 4 5. Southern California Edison Corridor/Surplus Land - Rezone SCE representatives have met with staff to discuss rezoning of their surplus utility corridor. The 300 foot wide corridor extends generally from the southerly City limit through the industrial area on an alignment adjacent to an extension of the future Day Creek Boulevard, continues through the Etiwanda area into County unincorporated area, and turns east approximately one half mile north of Wilson/24th Street. Staff supports rezoning consistent with surrounding land uses. Relatively minor issues must be resolved, including the potential for remainder parcels adjacent to developed residential areas, areas where there is a choice between two adjacent land uses, and constraints posed by the alignment of Day Creek Boulevard. An Environmental Impact Report may be required forthe corridor north ofthe industrial Area. Further, processing in the County for land use change in the City's Sphere-of-Influence will be necessary. SCE has stated that they intend to phase the land use change applications, with the industrial area applications being first. No applications have been filed as of this date. There appear to be no issues to be resolved for land use change through the industrial area. A large scale SCE Corridor study map has been prepared and is available for viewing in the Planning Department. It will also be posted at the meeting. 6. 1-15 and Foothill Boulevard Node This node is currently zoned for commercial development. The City Council, Redevelopment Agency, Planning Commission, market study, and staff are fully supportive of commercial development of this node. · The southeast quadrant is developed with the Foothill Marketplace in conformance with "Regional Commercial" standards under the Foothill Boulevard Specific Plan. · The northeast quadrant, within the Victoria Specific Plan, is reserved for the Victoria Mall. According to the Redevelopment Agency, the Hahn Company is current on their agreement with the Agency. The market study suggests regional entertainment uses be considered in concert with the mall. · The southwest quadrant is zoned "Regional Related Commercial" in the Victoria Specific Plan and is vacant with no activity. · The northeast quadrant adjacent to the freeway is zoned "Regional Commercial" and the adjoining parcel "Community Commercial" under the Foothill Boulevard Specific Plan. Moore Development proposes to consolidate these with several residential parcels to develop a large regional commercial center mirroring Foothill Marketplace. Incorporating the residential parcels requires amendment of the General Plan, Foothill Specific Plan, and Etiwanda Specific Plan (ESP). PLANNING COMMISSION STAFF REPORT COMMERCIAL LAND STUDY DISCUSSION January 24, 1996 Page 5 7. 1-15 and SR 30 Interchanqe area The market study identifies this area as having potential for commercial development. While it will be a highly visible area there wilt be no direct access. Only two quadrants are in the City, the northwest and southwest. The northwest quadrant is zoned open space in the ESP and is developed with flood control facilities. The southwest quadrant is zoned Low Residential in the ESP . The viability of additional commercial use for this area will take further study. A key to this study will be the final design for SR-30. The potential for commercial nodes at off ramps appears limited. The three nearest planned or existing off ramps are as follows: · For the I-15 north of SR-30, the nearest off ramps are at Highland/Cherry Avenue. A large parcel located adjacent to the 1-15 and bounded on the north by Wilson/Summit and on the south by the Highland/Cherry and 1-15 off ramp is currently zoned for "General Commercial" in the ESP It is vacant. No development plans are pending. If automobile franchises are generally available north of Baseline, it appears to be ideal for development of an automotive dealer center, with exceptional Freeway visibility and access. · For the I-15 south of SR-30, the nearest freeway off ramps are for Baseline Road at East Avenue. Two small parcels are zoned for commercial use in the ESP . Other parcels are zoned "Low Medium" and "Medium" residential and are vacant. If there are opportunities for automobile dealerships north of Baseline Road, a site might be suitable at this node; however there appear to be circulation access constraints to the freeway adjacent parcels. Further, changes to this area must be analyzed within the context of the ESP ESP policies protect the rural character of Etiwanda and discourage intense development. Review of the aforementioned ESP policies should be required as part of a consideration of intensification of land use. RECOMMENDATION: Staff recommends that the Planning Commission initiate discussion regarding this matter. This topic has also been placed on the agenda for February 14, 1996. Respectf submitt , BB:MB:gs Attachments: Vicinity Map Letter from Wohl dated January 8, 1996 VICINITY MAP :.,..: ..... I ~ -~"~-~ ......... : ' ' ' r * CITY HALL L Fou~b Str~ Noah o~th¢ Ontario ~[]s Project 2. fou~h Street ~d Archibald 3. South Side of Foothill - Haven to Rochester 4. AdditionorAutomobileSalesISVSubareaS CITY OF 5. SCE Su~lus L~d - Rezone 6. 1-15 and Foothill Boulev~d Node 7. 1-15andSR30Interch~ge~ea January 8, 1996 Mr. David Barker, Chairm~m. Planning Commission (Via Fax: 909/989-6028) Mr. Brad Bullet. City Planner (Via Fax: 909/987-6499) City of Rancho Cucamonga 10500 Civic Center Dr. Rancho Cucamonga, CA 91729 RE: Proposed General Plan Amendment for the property located South of Foothill Boulevard behveen Spruce and Elm Gentlemen: Although it is clear from the joint City Council\Planning Commission meeting held in December regarding the land use survey prepared by/vlr. Agaganian that there are still questions and concerns about the recommendations therein, the discussion of this issue over the past two months has brought several uncontested points to light. including the following: 1. It is an undisputed conclusion that Foothill Boolevard east of Haven is the primary retail corridor within the City and is best suited for Future retail development; 2. The existin~ retail core, which started with Tetra Vista Town Center and has successfully expanded east to the Promenade, is thrivin~ and continues to attract regionall), oriented retailers to the City: 3. Based on projected population growth and other positive aspects within Rancho Cucamonga and the sub-region. there will be continued demand for substantial acrcap. e to accommodate Future retail development: 4. It has been emphasized over and over again that building "critical mass" or the grouping of retailers both competitive and complementary is a positive factor For the City and is crucial in the decision making process for retailcr~ seeking new locations; 5. Retail development contribotes the most income to the City compared to any other type of development at a very low cost to service. Because of polealia[ cuts in current income sources and the constantly growing demand for city services, Rancho Cucamonga c~mnot afford to miss any viable opportunities to increase its tax base; and '6. Area property owners as well as Mr. Agaganian have emphasized the fact that competition between cities for regional retailers is fierce and that Rancho Cucamonga needs to act swift. Iv and aa~ressively to attract the remaining candidates. Every major retailer which Rancho Cucamonga loses means not only the lost sales tax revenue from that store but also the lost draw to the Foothill corridor (i.e. every tenant locating in an udjacent city will pull customers away from Rancho Cucamonga). WOHL INVEST~MENT COMPANY 2402 Michelson, Suite 170, Irvine, California 92715 · (714) 955-0115 · FAX: (714) 755-3971 Based on these facts, the City needs to determine wi~at it can and should do to assure that it attracts as much retail development to its primary retail corridor as the surrounding trade area can support. Currently, the only viable "product" the City has to attract community and regional retailers to its primary retail corridor is the land on the north side of Foothill Boulevard owned by Lewis Homes. Also available is Masi Project on the south side of the street. However, this project has been delayed for several years and orients itself more to the sports complex than to the existing retail core at Tetra Vista. Tenants looking to locate in this market are therefore forced to deal with Lewis Homes or to look at alternative locations outside of the City. Maintaining this monopoly of retail acreage on the Foothill corridor east of Haven is definitely not in the best interest of the City. Of course. Lewis Homes has made it clear in its letter presented to the council at the joint meeting that they do not ~vant any competition. However, Mr. Agagm~ian's conclusions regarding the posidve impact of critical mass and the proven concept of locating new retail across the street from existin~ centers (as he is proposin~ on 4th St.) indicate that a retail development on our site would be extremely beneficial to the City in the long run by attracting more shoppers to the area and giving more choices to the community. The planning staff has suggested that the City should wait until the north side of Foothill BIrd. is completely built out before retail development on the south side is even considered. Although this may sound like a good idea, stifling competition in the market is not the best long term interest of the City. Yes, adding retail acreage to the market may slightly delay the full lease-up of the Lewis projects. but over the next three to five years and beyond the City will get more tenants than it otherwise would have attracted and a_!ll tenants will do better because of the added critical mass created by the expanded development. We are not proposing that the entire South side of Foothill Boulevard be rezoned. Rather, the City should proceed as it has on the north side of the s~reet by starting at the point nearest the existing critical mass and moving east from there if demand justifies further rezoning. As you know. we currently have a firm commitment from "the good guys!" to build a 20,000-25.000 sq. ft. store on our site. We also have proposals from other prospective retail tenants interested in our site. I have attached a letter from "the good guys!" which basically states that the city will have to act "swiflly and aggressively" to keep them from moving to Ontario. Based on the quick turnaround which the City was able to accompIish to attract "Best Buy" on the Lewis site, I am confident that their objectives can be met should the City make the decision that this tenant will be a positive addition to the existing critical mass. Because of the time constraints we are working with, I would like to proceed on the following basis: First, we would like to immediately schedule a workshop with the planning commission to discuss site layout. As you suggested, this can be done irrespective of the proposed uses but can address issues such as elevations, circulation, parking and layout of buildings. Second, it is our intention to immediately resubmit our application for a General Plan Amendment. Although we would prefer ~o wait until we have arrived at an acceptable solution with the staff and Planning Commission, we are willing to risk the cost of the application fee in the hopes that we can come to agreement on a mutually acceptable plan while the application process is ongolng. Working with staff and Planning Commission at the same time as our application is being processed is the only way that we can come close to meeting the time frame set forth by "the good guys!". Finally, %ve would like to submit a request to have our GPA application considered on one of the two available "floating" dates for hearing such general plan amendments. I understand that the next scheduled submittal deadline is on IVlarch 15 with hearings in May or June. As you can imagine, like "the good guys!", most of the tenants which are currently interested in our property need to know the availability of our site as soon as possible or they may locate elsewhere. Based on the new information that has been presented recently, we are asking the Planning Commission to consider our proposed GPA for the following reasons: 1. It expands the existing "critical mass" of retailers on the Foothill corridor; 2. It allows healthy competition amongst landowners in the City's retail core, therefore providing more opportunities for retailers looking to locate in this market; 3. It is compatible vAth the existing General Plan which already permits certain kinds of retali development on our site; 4. It will provide a significant source of revenues for the City as the project is built out (for example, "the good guys:" alone is projecting sales of approximately $20 million whleh translates into sales tax revenues to the City of approximately $200,000); and 5. It will be designed in a way that xvill be complementary to all neighbors and will be an asset for the City. I would like opportunity to meet with you this week to discuss these ideas further and will call you set up an appointment. Thank you for your consideration and I look forward to working with both staff and the Commission to arrive at a mutually acceptable solution for this site. Sincerely. ~~ RTNERS Peter Desforges,~ encl. cc: Mr. Melcher Mr. Tolstoy Mr. McNiel Mr. Lumpp Mr. Curatalo Mr. Blanc Mr. Alexander Ms. Willjams Mr. Gutierrez good gu Is AUDIO/VIDEO SPECIALISTS December 29, 1995 Mr. Peter DesForges Wohl Rancho Partners 2402 Michelson, Suite 170 Irvine, CA 92715 RE: SEC Foothill and Spruce Avenue Rancho Cucamonga Dear Peter, As a follow up to my November 15 letter, I want to reiterate the key role that expedient processing plays in our decision to proceed. As we discussed last week, interest in this location hinges on our ability to commit soon to a late 1996 grand opening. What this means is that unless we have all discretionary City approvals behind us by February in order to make our plan preparation and construction schedule, we will proceed with our alternative site in Ontario. I am hoping for the City's full cooperation to make this project happen quickly as I understand was done across the street. Thank you for your cooperation. Yours truly, Brad Kaye Real Estate Manager BK/md CokOOS.doc) Corporate Offices · 7000 Marina Blvd · Brisbane. CA 94005-1830 · (415) 615-5000 Rancho Cucamonga COMMERCIAL LAND USE AND MARKET STUDY Public Comments Appendix -'. Economics Research Associates Affihate~ w~tn Drivers Jonas December 19, 1995 Mr. James' P. Axtell Director of Asset Management Mission Land Company 18101 Von Karman Avenue Suite 800 irvine, CA 92715-1046 ERA Project No. 11748 RE: Rancho Cucamonga Commercial Land Use and Market Study Dear Mr. Axtell: You recently requested that Economics Research Associates (ERA) provide an opinion letter as to the validity of the findings in the recently completed study referenced above. The following describes the scope of work we followed in completing that assignment. UNDERSTANDING OF THE ASSIGNMENT The City of Rancho Cucamonga recendy asked the planning consuiting finn, Agajanian Associates, to prepare a study that addressed several land use policy concerns that had recently surfaced in the City. One of the many issues addressed in the study involved the question of whether properties on the north side of 4th Street (adjacent to the new Ontario Mills project) should be allowed to develop as a retail center; this area is currently zoned for industrial use. Another central concern of the study was to assess the impacts of future commercial development upon the City of Rancho Cucamonga budget, "particularly what are the fiscal consequences if commercial development occurs in industrial zoned areas within the City." ANALYSIS OF THE STUDY Essentially, the Agajauian study begins by developing a picture of the real esta~te market supply and demand conditions that exist throughout the subregion (the cities of Upland, Rancho Cucamonga, Fontaria, and Ontario) in general, and Rancho Cucamonga in particular. By looking at demographic and socioeconomic elements, such as growth trends in household income, popuiation, housing, and resident spending patterns, the report arrives at the following key conclusions: 10990 Wilshire Boulevard. Suite 1600. Los Angeles. Cah~cr:"~a 90024 · i3101 477-9585 Fay: (310~ J-78-1950 Los Angeles · San Francisco · San Diego · Cm!c3Go, Washington. D.C. - Loncon " Economics Research Associates Affiliated with Drivers Jonas Mr. James P. Axtell ERA Project No. 11748 December 19, 1995 Page 2 · Retail and service sectors are the strongest and most consistent generators of employment growth among all industrial sectors. · Retail sales leakage of total taxable sales in Rancho Cucamonga is estimated at $241,688,000. About $174,635,000 of the total amount is sales leakage from retail store sales. · Retail and lodging commercial uses generate the greatest positive fiscal impacts. · Rancho Cucamonga is competitively disadvantaged with its lower share of retail sales capture. · The City lacks significant commercial attractors to make the City a strong commercial destination at this time. Based on the conclusions outlined above, the author addressed the issues raised by his analysis by setting forth several recommendations for action, including the following: 1. Give consideration to an Urban Entertainment Center at the regional mall site (Victoria Gardens). 2. Rancho Cucamonga should focus the bulk of its commercial development effort toward the Foothill Boulevard corridor, especially in the primary retail node near the 1-15 on-/off-ramp. Secondary efforts should be directed toward the development of the Foothill corridor in general, sites near the 4th Street on-/off-ramp to the 1-15, and sites near the future Highway 30 on-/off-ramps. 3. As both a long-run and short-term land use strategy, develop a retail presence on 4th Street. "' One of the essential issues implicit in this second recommendation above is the affect of the development of a secondary retail area on 4th Street (between Haven and I-15) on the primary retail area, Foothill Boulevard. Other considerations to be weighed are the long-run interests of the City as a whole. If a course of action such as described in 2. above were followed, ERA is of the opinion that the following would likely occur: " Economics Research Associates M,L James P. Axtell ERA Project No. 11748 December 19, 1995 Page 3 a. Neighborhood retail along Foothill Boulevard, and elsewhere in the cormmunity, would be largely unaffected. The 4th Street retail node would be regional retail in design, and would generally not compete with neighborhood retail outlets. b. The 4th Street corridor would definitely benefit from the Ontario Mills development. It has been the experience of our clients that adjacent competitive retail projects develop mutual synergies, and both often do better than they would if the other development did not exist. c. Foothill Boulevard would, and should, remain the primary node for retail in Rancho Cucamonga. Community-serving retail along the Foothill Boulevard corridor may, over time, be affected by new commercial development at 4th Street and the I-15 Freeway. However, the long-run competitive environment would not be significantly different on Foothill Boulevard from market conditions generally found throughout Southern Calfomia. ERA is in agreement with the Agajanian study that the concept of an entertainment center at the regional mall site is one that should be seriously explored. Our research has continually shown that buying panems are changing, and that shoppers are more than ever desirous of being entertained, and having shopping be part of an "experience". The new Irvine Spectrum, or even Universal CityWalk, would be possible paradigms for such an entertainment/retail oriented development. Additionally, we have extended the Agajanian sales analysis through 1994 using recently available figures. Those figures are attached (see Table 14). Although there has been a signficiant increase in retail sales in both 1994 (and continuing into 1995), these sales increases do not appear to materially affect any of the findings in the Agajanian study. In regard to the fiscal impact of new development, there could be some legitimate "' disagreement about the authors' assumption of a direct linear relationship between municipal costs and the number of persons employed at a particular type of development (i.e., retail, office, etc.). However, there can be little disagreement with the Agajanian report's findings that sales tax generation has the greatest positive fiscal impact. "' Economics Research Associates Ivlr. James P. Axtell ERA Project No. 11748 December 19, 1995 Page 4 We plan to auend the December 20, 1995 joint City Council and Planning Commission meeting and are prepared to present a brief summary of our findings at the portion of that meeting that is open to public comment. Sincerely, Senior Associate LVF/jla Enclosure Table 14 1994 RETAIL SALES CAPTURE BY CATEGORY Rancho Cuchamonga Fontana Ontario Upland Market Area Total Taxabk Trans. Percent Taxable Trans. Percent Taxable Trans. Percent Taxable Trans. Percent Taxable Trans. Percent Commercial Use (SIN)0's) Capture (S000's) Capture ($000's) Capture (S000's) Capture (S000's) Capture Retail Stores ApparelSlores $17,045 33.1% $12,495 24.3% $10,571 20.6% $11,317 22.0% $51,428 10G GeneraI Merchandise Stores $139,571 38.5% $78,058 21.5% $89,059 24.5% $56,223 15.5% $362,911 100.00/o Dug Stores $10,555 26.8% $7,973 20.30/° $10,039 25.5% $10,789 27.4% $39,356 100.0% Food Stores $56,993 27.1% $48,448 23.0% $68,308 ' 32.5% $36,502 17.4% $210,251 100.00/o Packaged Liquor Stores $2,742 19.8% $2,920 21.1% $5,778 41.8% $2,394 17.3% $13,834 100.0% Eating and Drinking Places $70,986 25.7% $51,988 18.8% $101,536 36.8% $51,445 18.6% $275,955 100.00/o Home Furnishings $21,897 29.8% $19,565 26.6% $12,782 17.4% $19,243 26.2% $73,487 100.0% Bldg. Matrl. and Farm Implmt~ $17,656 8.8% S35,921 18.0% $92,122 46.1% $54,117 27.1% $199,816 100.0°/o Auto Dealers and Auto Supplies $12,011 ' 2.1% $133,986 23.3% $359,950 62.5% $69,760 12.1% $575,707 100.0% Service Stations $38,946 14.1% $55,348 20.0% $142,551 51.6% $39,249 14.2% $276,094 100.0% Other Retail Stores $75,266 25.0% $41,456 13.8% $127,942 42.5% $56,081 18.6% $300,745 100.0% Subtotal Re~ail Stores $463,668 19.5% $488,158 20.5% $1,020,638 42.9% $407,120 17.1% $2,379,584 10C AII Other Outlets $222,528 t8.9% $183,204 15.6% $687,179 58.4% $83,965 7.1% $1,176,876 100.0% TOTALALLOUTLETS $686,196 19.3% 671,362 18.9% 1,707,817 48.0% 491,085 13.8% $3,556,460 100.0% Source: Califomifi State Board of Equalization and Economics Research Associates December 13, 1995 Mr. Brad Buller, City Planner (Via Fax: 909/987-6499) Mr. David Barker, Chairman, Planning Commission (Via Fax: 909/989-6028) City of Rancho Cucamonga 10500 Civic Center Dr. Rancho Cucamonga. CA 9]_729 RE: FOLLOW-UP QUESTIONS AND DISCUSSION FRONI 11/29 PLANNING CONIMISSION MEETING REGARDING AGAJANIAN & ASSOCIATES COi'd~IERCIAL LAND USE AND MARKET STUDY. Gentlemen: Thartk you for the opportunity to present some of my questions and concerns regarding the above referenced study at the last Planning Commission meeting. Although Mr. Agajanian responded to each of my questions. the responses given raised some additional questions which I believe may be worthy of consideration. Mr. Agajanian stated at the Planning Commission meeting that "reasonable minds can disagree" and it is that light that I would like to present these ideas. I learned in my study of urban land economics at U.C. Berkeley and as an associate economist at the Federal Resen, e Bank in San Francisco that the analysis of empirical data, particularly that associated with the supply and demand for consumer goods. is an imperfect science and can reasonably be interpreted to arrive at differing conclusions. The difficult dilemma facing the City is that choosing the wrong course will result in long term financial consequences which would be detrimental to both the City and the area's proper~y owners. The primary points that are contained in the following discussion are as follows: The conclusion that there will only be demand for 400-550 acres of additional commercial land in :.' Rancho Cucamonga through build out is based on the assumption that future demand will only come from population growth in the subregion. The 400-550 acre figure does not take into consideration currently nnmet and future demand for additional commercial uses from the existing population base in both the subregion and the greater market area. Another %vay of saying this is that the study assumes no current net leakage out of the subregion for goods and services. On the retail side. it is quite apparent that the subregion currently lacks a regional mall and that shoppers in the subregion are going out of the area to malls arid retailers in adjacent cities for a significant portion of their expenditures. For commercia[ uses other than relail stores, it is clear that because of its location at the [-10/I-15 intersection. the existence of San Bemardino and Riverside County's only international WaHL I,NWESTNfENT CO.MPANY 2402 Michelsan. Suite 170. Irvlne, California 92715 · (714) 955-0115 · FAX: (714) 7554971 Mr. Brad Bullet Mr. David Barker December 13, 1995 Page 2 airport and new convention center, and the existing strong base of business users in this area, the subregi6n will continue the trend of artractin~ a disOroportionatl¥ high number of businesses locatinF in the San Bemardino/River$ide area. In other words, if the subregion's population did not grow any further, there would still be asignificant demand for commercial sites from businesses choosing this subregion over other sites in other cities' within the greater Inland Empire. These two factors alone could .sianificantlV increase the demand for commercial land uses over the z~00-550 estimate concluded in the study. In several areas of the study it discusses the competitive disadvantages that the City has as it attempts to compete with Ontario for tenants. It states that Rancho Cucamonga's primary disadvantage is its lack of sufficient critical mass to attract new tenants. This statement apparently dismisses the over 1 million Square feet of ex!sting retail users on the Foothill corridor as only a community draw. It is clear from the regionally oriented retailers that are choosing to locate there as well as from the fact that Rancho Cucamonga currently captures 38.3% of the subregion's total sales of General Merchandise that the City has a tremendous "asset" of critical mass on the Foothill corridor which it should make every possible effort to expand. This corridor is viewed by the retailers locating there as a regional draw and it appears to have the potential to keep growing in that direction with the City's continued cooperation. Several factors such as Rancho Cucamonga's higher income demographics and intangibles such as the City's upscale image and central location to the San Bernardtrio/Riverside region's population and business growth areas may lead to capture r~tes of future demand much greater than the 28%-32% which was used 1o arrive at the 400~550 acres of estimated remaining commercial land oppommities. The stLdy rec. ommends that land north of 4th Street across from the Mills be re-zoned to general retail· When'asked if this could negatively impact the City'.s developing retail core on the Foothill corridor, Mr. Agajanian stated that the tenants who would be attracted to the zlth Street site are different ihan those who are considering the Foothill corridor. Bas~:d on our own experience, as well · as an informal survey of other landowners on the Foothill corridor and retail brokers servicing this area, it is clear that the Foothill corridor competes directly with Ontario and specifically The Mills area for retailers looking to locate in this region. Adding more land and therefore critical mass 1o the Mills area will only make it more difficult to attract retailers to the Foothill corridor where the City can benefit most from their existence. Regardless of the City's decision on the 4th Street site, it is important that the City focuses on doing ever-/thing it can to help build critical mass on the Foothill corridor. Based on these factors, we believe that it is in the City's best interest to immediately reconsider our proposal to expand the permitted retail uses on our site. The Survey makes it very clear that synergy is Mr. Brad Bullet Mr. David Barker December 13. 1995 Page 3 created by building critical mass and that all retailers in an area ultimately benefit from the addition of new stores. Although there is currently available land on the North side of FoothiIl, it is all under the o;vnership of one developer which does not provide adequate options for retailers considering to locate on the Foothiil corridor. We have an immediate opportunity to capture at least one significant tenant, "the Good Guys! ", who ',viII othep, vise locate outside of the City. We are also talking with several others who are considering our site as a 'location to serve this sub-region and beyond. We would like to schedule a workshop with the Planning Commission at the earliest possibIe date to determine how best to move forward on this site. It would be our intention to immediately re-submit our application for General Plan Amendment so that no further time is lost and I will be contacting you tomorrow to discuss this furLher. In any event, the following is a more detailed analysis of the questions that were asked at the last Planning Commission meeting, my recollection of the responses given by Mr. AgajaLrdan, and some follow-up questions and discussions regarding the conclusions of this Study: QUESTION #1: The report suggests that the City shoUld consider re-zoning a significant pargel of land on the north side of 4th Street adjacent to the Mills Project which is currently under construction. (a) Should the City investigate the potential negative impact that promoting retail development in an area away from its primary commercial corridor may have on its existing retail base. By adding critical mass to a project located in another city, there is a good chance that Rancho Cucamonga residents and other area shoppers ',rill be more likely to cross the s'treet and spend dollars at the Mills. rather than slay and shop along the Foothill corridor. R. ESPONSk: Mr.; Agajanian stated that the retailers looking to locate at the MilIs site are different than those who would locate on the Foothill corridor. He described 'these as two distinct market niches. Those who would locate adjacent to the Mills are more regional draws having uses associated with the "discount outlet" concept at 'the Mills while those on the Foothill corridor are more sub-regional and community oriented such as those which are already existing. Mr. Agajanian also felt that the consumers shopping at the Mills site were different than those shopping on the Foothill corridor. The reason for his recommendation to re-zone the 4th Street site is that since the MiIls is going to be built anyway, the city can only gain by taking advantage of this with a development across the street. He described this as an 'additive component" of retail demand and not a competitive component with Foothill Blvd. He described this as an aggressive, oppormmistic move to grab sales away from '~he Mills. Mr. Brad Butler Mr. David Barker December 13, 1995 Page 4 Another concept which Mr. Agajanian discussed was how shoppers coming off of the 4th Street exit would be turning left to enter the Mills project and that there would be a stack-up of cars at the light causing "traffic friction". He suggested that shoppers in that situation might look to the right and see the retail development which the Study is recommending and that they might end up shopping there instead. FOLLOW-UP DISCUSSION: As a property owner who is currently negotiating with several tenants considering this market area. the "view from the trenches" tells a much different story concerning this issue. Several of the retail and restaurant tenants we are currently dealing wi:th are looking for one location in this market to service the entire sub-region described in the Study and beyond. These retailer~ view the critical mass which currently exists at the Tetra Vista center as a regional draw. Since it is located closer to the higher income demographics in Rancho Cucamonga and along the foothi/Is in adjacent cities, many of them see this as a superior location to the Mills site. Proof of this can be seen in the Lewis Homes projects where more regionally oriented tenants such as Best Buys are choosing to locate. As you know, we have been working with "the good guys!" to open a store on our site. The},, certainly consider themselves a regional draw and want to locate on our site because of the :;x/nerg.y they feel is created by locating close to stores like Service Merchandise, Montgomery Ward and Best Buys. I have attached a copy of a letter which I recently received from "the good guys!" to demonstrate that they° like many other tenants. are looking at locating either on the Foothill corridor or in Ontario. Although the letter does not explicitly state so, Mr. Kaye has relayed to me that his back-up to our site is one near the Mills project in Ontario. The City will need to respond "a~sressively" and quickly if it wants to avoid loosing this tenant and the $200,00 to $300.000 that it will pour into the City's coffers. To analyz~ the second part of Mr. Agajanian's response it is important to understand the differences in the shopping patti'ms associated with a single large enclosed regional attractor like the Miljs versus the shopping patterns associated with a sub-regional and regional retail corridor such as Foothill BIrd. east of Haven. Shoppers going to the Mills will be more destination oriented and will be looking for impulse buys. By this I mean they wilt generally be going there for the particular shopping experience which an enclosed specialty discount mall provides. They generally park in one location, shop for an average of more than two hours, return to their cars and go home. Shoppers going to a regional retail corridor are Often times more product and/or convenience oriented. By this I mean that either (1) they are looking for a particular product (such as a new television) and have !~lentified several "big box" retailers located in close proximity where they can easily be comparatively shopped oi' (2) they know what they want to buy and want to do it as conveniently as possible (i.e. they want to park in front of the store and don't want the hassles of parking and crowds that will be associated with a project like the Mills). Mr. Brad Bullet Mr. David Barker December 13, 1995 Page 5 Although it is not discount oriented like the Mills, an excellent example of the first type of retail described above is South Coast Plaza in Costa Mesa. Since it is Southern California's most successful mall, the owner's of the land across the street assumed that another smaller retail mall development would be able to take advantage of the "synergy" from the existing critical mass. The Crystal Court mall was built and has been very unsuccessful (it is now sometimes referred to as the "Crystal Coffin" because of all the retailers who have "died" therein). The problem is that once shoppers park and shop for an ex'~ended period at South Coast Plaza, they are unlikely to get in their cars, drive across the street, enter another mall and start all over. We are currently negotiating with a restaurant tenant who was considering the Mills area but was not convinced that customers would leave the mall to eat out at a pad site rather than eat at one of the many restaurants located within the mall. Like South Coast Plaza, the Mills will be a destination draw pulling shoppers from a wide area. Any discount tenants. looking to locate there to take advantage of the synergy will most likely want to locate in the Mills project itself. With room for 2.6 million square feet of retail space, there is no immediate need for additional adjacent retail development to attract "overflow" discount tenants. The conclusion that can be drawn from tkis is that the business locating across the street from the Mills will not necessarilv be the "discount mall" tenants that are considering the Mills project, but rather more "retail corridor" oriented tenants like those who are likely to otherwise locate on the Foothill corridor. ' This is not to say the development of the Noah side of 4th Street carmot be successful (i.e. the 1-10/I-15 intersection is obviously a good retail location - that's why the Mills chose the site!). However, there is a risk that it will affect the City's ability to continue to successful grow'th of critical mass on the Foothill Corridor. A concept ~hat has proven successful in city after city is that of pulling retail corridor oriented tenants on both sides of the street. This creates the feeling of a retail hub where traffic in both direction can access retailers converfie~tly. . . With this in mind, the conclusions reached in the Study that: (1) a retail development across the street from the Mills will attract retailers that are somehow different from those on the Foothill corridor; (2)will automatically be successful because of t.he synergy with the Mills; and (3)will arttact shoppers away from the Mills so that they spend their money in Rancho Cucamonga are at least worthy of further investigation. More likely is that the re-zoning of land located across the street from the Mills would only be successful at drawing both customers and retailers away from similar stores and sites that are currently located on the Foothill corridor. Mr. Brad BuIler Mr, David Barker December 13. 1995 Page 6 (b) If the City is going to re-zone land for retail users, should it consider doing so in a location that will add c'ritical mass to its existing retail base and therefore make it more likely for shoppers to stay in Rancho Cucamonga rather than establish a new shoppLng partern of traveling to the south side of the City? RESPONSE: Mr. Agajardan agreed that the City should continue its efforts to expand the critical mass on the Foothill corridor. He reiterated that he did not feel that there would be a crossover of tenants or shoppers between the Foothill corridor and the Mills area and that the effects on the Foothill corridor from re-zoning additional land to commercial at 4th Street would be negligible. FOLLOW-UP DISCUSSION: Mr Agajanian's response again denied the possibility that there may be significant cross-over of both tenants and consumers occurring between these r, vo sites and discounts the potential adverse effects that adding more retail space at the 4th Street location may have on the City's existing retail base as discussed in 1 (a) above. (c) Adding land at the 4th Street location will increase the supply available to tenants considering that general area which is lil~ely to drive land prices down on both sides of the street. As land prices fall in that location, will it make it more difficult for landowners in the City's primary retail corridor to compete for tenants who might consider either one of these two options. RESPONSE: Mr. Agajanian agreed that increasing the supply of retail land on 4th Street could lead to a drop in land 'prices at the Mills site which could make it more difficult for the Foothill corridor to compete for tenants who may be considering both sites. He stated. however. that the market would eventually reach e..quilibrium and that the City is not in the business of controlling land prices. FOLLOW-UP QUESTION: I ::igree that the market will eventually reach equilibrium but, in light of the fact that the 'Study emphatically states that there is a limited amount of time left for the City to .a.~ressivelv pursue the remainin~ tenants who are considering this market area, is there a risk that an excess amount of land around the Mills site and therefore lower land prices in the near future will encourage tenants to locate at the 4th Street site rather than on Foothill next to the City's existing retail critical mass? Also, it is important to note that, given a' fixed amount of demand. the "eQuilibrium reached" means that land values will fal__l at both locations. QUESTION ."2. The report identifies the Foothill/I-15 intoLrchange as the primary retail node fo{ attracting shoppers from the greater market area due to its easy accessibility. Based on reports from industry insiders, the Circuit City located at that site is not doing as well as the Best Buy's which.. is located'in the City's more established retail _core at Tetra Vista. Mr. Brad Butler Mr. David Barker December 13, 1995 Page 7 (a) Because Best Buy is obviously drawing customer from a wide regional geographic area, should the City consider investigating the shopping patterns that appear to favor the Tern Vista site? Is it due to greamr.critical mass at the Tern Vista site or are the shoppers attracted to the 1-15 site different demographically than those shopping at the seemingly more upscale Tetra Vista site. RESPONSE: Mr. Agajanian slated that the study was "global" in nature at that it did not look at the relative success of any one site in partic:ular compared to another. He mentioned that stores such as Best Buys often do zip code analysis of' their customer base but that these reports were considered proprietary and are not .generally available. He further stated that the study looked at the big picture to determine total acres needed and where they best fit given the City's land use patterns, fiscal performace and other criteria. Mr Agajanian emphasized that the freeway nodes be the central retail points in 10 to 20 years. FOLLOW -UP DISCUSSION: My or/ginaI question was based on the conclusion arrived at in the Study which clearly states that the 1-15/Foothill and 4th Street intersections should be the primary areas of focus for future development aimed at attracting more regionally oriented retailers and consumers. There did not appear to be any empirical data in the Study to support this conclusion and, based or~ a~,ailable information (i.e. Best Buy is out-performing Circuit City). it may be reasonable lo conclude that the existina critical mass on the Foothill corridor east of Haven is equally or even better suited to attract this target audience. (b) Should the City aggressively seek out tenants who would consider locating at either of these sites along its primary retail corridor rather than locate in or near the Mill's site so that it can continue to build critical mass where it will most benefit its existing retailers? RESPONSE: Mr.: Agajanian agreed that the City should aggressively seek tenants to locate on its primary retail corridor but again emphasized that he did not believe the,.s~- would be the same tenants who would be considering the Mills site. He again described the Foothill corridor as a commuaity draw and the Mills site a distinclly different regional draw. FOLLOW-UP QUESTION: Should the City consider the submittal of an informal survey (or conduct its. own) of other Foothill corridor land owners to determine if in fact they too have been in direct completion with the Mills site for retailers and restaurants? Also, would a survey of other "Mills" sites to determLne their effect on adjacent land uses be useful in attempting to predict what effect the Ontario Mills might have on this market? QUESTION #3. The report suggests that the City should seek to capture at least its pro rata share of future retaiI expenditures based on (1) percentage of available commercial lap. d; (2) percentage of population; or (3) percentage of increase in population. This would indicate a capture rate of between Mr. Brad Bullet Mr. David Barker December 13. 1995 Page 8 28% and 32% of future retail expenditures. (a) Neighboring cities have proven that aggressively pursuing major regional retailers can lead to capture rates in certain categories of 40% or higher. Should Rancho Cucamonga limit its future development potential by assuming it cannot capture more than its pro rata share of these future expenditures7 RESPONSE: Mr. Agajanian agreed that the city should not limit iti potential market capture rate and that it should try to capture as much as is possible. He stated that the Study looked at the much broader category of ."commercial land" and that it did not focus on the sub-groups witkin that category to determine if there is enough or to much of one particular type of land use or whether or not it is located in areas that are viable. Mr. Bullet added that because several of the land use designations within the City have overlapping permitted uses (for example: office buildings, industrial buildings, certain retail uses and restaurants are all allowed on our site which is included in the Study as "commercial" land) and it would therefore be difficult to break out available land parcels on the basis of specific permilled uses. FOLLOW-UP DISCUSSION: The reason for my question is that the answer to "how rfiuch retail business should the City strive to or expect to caoture" will ultimately determine how much land in the City should be zoned for retail uses. If, for instance. the city can continue to capture a 38.3% share of the sub-region's General Merchandise sales as it is currently doing (Table 14 of the Study), wouldn't it · be reasonable to allocate at least the same percentage of commercial land within the City to this category and to do so in areas where it is best suited (i.e. near the existing critical mass of retailers)? The discussion in the Study that states that too much excess retail land will lead to the dissemination of the City's .retail critical mass as retailers are drawn to cheaper. and cheaper land is not valid for two significant reasons: First, retailers in the 90's are still suffering from mistakes mad~ i~ the booming 80's when expansion was rampant and the number of store openings was more important than profitability in each store. The retail "shakeout" in the lets 80's andearly 90's have left many of these marginal locations empty and practically unleasable at any price. Retailers today are far more sophisticated and will not locate on a poor site regardless of the rental rate or sales price. Therefore, sites that are not located in A-1 locations (i.e. close to a region's or sub-region's critical mass of retailers) will remain vacant until a more viable use can be formal. Examples of this is Rancho Cucamonga include the Gemco, KMart and Payless sites which are not located in the City's retail core. No successful tenant would consider these sites regardless of price because of their inferior locations. Second, the financing for speculative development wkich fueled the rapid expansions in the 80's is no longer available. Many speculative retail developments in the 80's were buili in order to genet~ate Mr. Brad Bullet Mr. David Barker December 13, 1995 Page 9 development fees for the builder and loan points for the lender. Projects planned today and in the future are and will be driven by demand from retailers who are committing the financial capital and are best suited to determine a sites viability. As a result of these two factors, it may be prudent and reasonable for Rancho Cucamonga to concentrate less on whether or'not there is an excess of commercially zoned land within the City'and more on whether or not there is sufficient commercially zoned land in areas where retailers and other business want to be located. (b) .Rancho Cucamonga has a median household income of between $5,6z~ and $12,195 .higher than its neighboring cities and $7',~586 or 17% higher than the subregion as a whole. Since it has the strongest demographics in the sbbarea, would it be reasonable to suggest that it should be expected to capture a higher than pro-ate share of the retail dollars spent in the subregion? RESPONSE: Mr. Agajanian stated that the Study did take into consideration the City's ~igher than aveage incomes. FOLLOW-UP QUESTION: Although the Study looks at capture rates based various scenarios including available land, future groxxrth demand, and percentage of build-out population, it does not make · adjustments to any of these to take into account the hither income levels in Rancho Cucamonga. If the purpose of the Study is to determine how much land should be available to accommodate future demand, should the 28%-32% capture rate. range as well as the f'mal conclusion of the number of acres needed to accommodate future growth be adjusted upwards by some number (perhaps the 17% difference in aveage income)? (c) Coula the success of Tetra Vista Town Center axld 7Fown Center Square be an indicator of the retailer's desire t6 be located as close as possible to the heart of the City's commercial corridor and therefore its strong demogapkics. RLSPONSE: Mr. Agajanian agreed with the fact that retailers want to locate close to the existing retail critical mass around Tetra Vista and acknowledged that this area draws well from outside of the City. FOLLOW-UP DISCUSSION: The point of this question is to emphasize that Rancho Cucamonga's existing strong ability to capture more than its share of certain commercial uses is indicative of the need t,o allow for the adequate supply of commercial sites, particularly in areas that will help create additional $ynergv with existing uses. The success of the over 1 million sc~uare feet of existing Footkill corridor retailers may suggest that this is more than just a community center. Mr. Brad Bullet Mr. David Barker December 13, 1995 Page 10 QUESTION #4. Table 23 indicates that the Total Estimated Subregional Demand for Commercial Land Uses within the Community Retail and Regional Retail categories is approximately 300 acres. Projects are currently plan.ned or under construction in neighboring cities that will exceed that number of acres, yet there still appears to be significant demand' from retailers to locate within Rancho Cucamonga's primary commercial corridor. Does this imply that the city should not promote additional development in these categories as there may not be sufficient future consumer demand to support such development? RESPONSE: Mr. Agajanian stated that he did not consider any of the currently proposed projects as there is no g'uarantee that they will be built. FOLLOW-UP DISCUSSION: Forgetting any of the proposed projects and looking only at those which are currently under construction (Ontario Mills, Term Vista Promenade, etc.) would still suggest that the majority of the future retail demand will be satisfied by these developments. Again, this question is somewhat rhetorical in that it appears that there is a significant demand for additional retail uses based on the existing sub-regional population. To understand my point here it is important to understand how the Study arrives at its estimate of the 400- 550 acres of future demand for commercial land in the City. First, it took the total estimated increase in population at build-out for the entire sub-region which is estimated at 168,676. Next, it multiplied that number by the average cuffent taxable retail expenditure per person of $7,707.52 to arrive at a total estimated future demand for goods and services of $1,300,074,000. The formula on which the entire Survey is based is therefore as follows: 168,676 x $7,707.52 = $1,300.074,000 Esd Population Current Taxable Future Demand Growth thl-ough Retail Expenditure : for Retail Goods Build-out Per Person The Study then takes this $1.3 billion number and allocates it over the various commercial land uses using methods that are self-admittedly less than precise. The Study states the following (pg. 38), "The estimates for the neighborhood retail, community retail, regional retail, and some of the "other" retail are based solely upon expenditures for retail goods and services." Although it is not clear, my assumption is that it is looking at existing per capita expenditures for these categories and applying those percentage ratios tO the $1.3 billion of estimated future demand. It goes on to say, "The office demand estimates are less. clear because it is heavily dependent upon anticipated Personal/Business Service and Financial sector employment growth and because the use may be developed in industrial districts. The commercial recreational demand estimate is also somewh__at variable because this type of land use varies widely in Mr. Brad Bullet Mr. David Barker December 13, 1995 Page 11 project characteristic from a cinema to a golf course. Lodging demand is based upon a proportional growth of visitor nights generated by businesses, tourists and travelers. This may underestimate the subregional demand for lodging properties". Based on this analysis there is an estimated subregional demand for 1,670 acres of commercial development .453 acres of retail uses, 934 acres of office uses, 118 acres of commercial recreational uses, 57 acres of lodgings and 108 acres of other commerciaI uses within the subregion by buildout". Finally, the Study estimates the amount of this demand that the City can expect to capture by looking at the various scenarios listed above (i.e. the City's percentage of remaining subregional population growth (31%), the percentage that the City's vacant land represents of the total available land in the subregion (32%), the peruenrage that the City's total population at buildout represents of the total subregion population (28%). There are several significant factors which may materially impact the demand for future commercial development in the City which do not appear to be included in this economic model. First, the survey assumes that all current retail demand is being met within the subregion (i.e. there is no net leakag~ outside of the subregion and therefore no current demand for additional commercial development based on the existing population within the subregion). Since the subregion does not currently have a regional mall and does not include many of today's popular restaurants, retailers and service companies in its list of existing businesses, it would be reasonable to assume that there is a significant amount of demand for additional retail goods and services proriders which is currently being met OutSide of the subregion. Also because of its ideal location near the 1-15 and 1-10 intersection, its existing strong base of non-retail business and given the expansion of the international airport and development of a convention center in Ontario, the subregion is well poised to capture a disproportionally high share of the businesses which will be loc,3ting in the San Be. rnardino/Riverside region irrespective of population growth. This may lead to long term demand for acreage to build office and financial service sector related developments which is far greater thari'what can be estimated by looking solely at the.'$1.3 billion of demand for retail goods from future population grovah within the subregion. 'Second, as stated in the discussion following Question 3(b) above there is no adjustment made for the higher income levels in Rancho Cucamonga. All of the figures are based on the average per capita retail expenditures for the subregion. Actual demand for commercial sites in the city will most likely be disproportionately higher than the averages given for the subregion. Finally, it is not clear how accurate the estimates of the breakdown between the individual categories might be as the Study itself states that these estimates are somewhat variable. Therefore, it is important to keep in mind that the Study's estimated demand for office uses of 934 acres, for example, looks rather precise but is by its own admission a difficult number to estimate' accurately. Mr. Brad Butler Mr. David Barker December 13. 1995 Page 12 Ijq conclusion. these factors may indicate that the demand for commercial land might be _far greater than the 1670 acres estimated in the subregion as a whole and, more importantly, the 400-500 acres of. projected future demand in Rancho Cucamonga may be si~ificantly underestimated , there is a discussion of Rancho Cucamonga's competitive disadvantages. is disadvantaged as compared to Ontario, for instance. because it has not amassed as large of a base of retail stores and therefore, will have difficulty attracting new retail stores to its commercial center. The report goes on to say "The city can expect that all new commercial development ~vill be hard won and will require that every competitive advantage be well used including the attractlot{ of new commercial uses, competitive uses, complementary uses. and the use of synergy among the commercial uses to at'tract development to the city." Should the city aggressively seek ways to add to the existing critical mass on the Foothill &orridor in order to overcome this disadvantage7 RESPONSE: Mr. Agajanian stated the report specifically says that the City should aggressively pursue these users and that each increment will be harder and harder to attract to the City. He stated that if a retailer wants to locate here, the City should give them "every reason to do so" if they are willi:ng to meet the building requirements of the City. FOLLOW-UP DISCUSSION: The question posed at the end of the above paragraph is admittedly .redundasm Upon further reflection, a better question would be "If Rancho Cucamonga is so disadvantaged. why is it that it is currently capturing 38.3% of sales from General Merchandise Stores which is second oray to Auto Dealers and Auto Supplies in total taxable transactions. In fact, if Auto Dealers and Auto Supplies and Service Stations are taken out of the equation. Rancho Cucamonga is capturing 25.7% of Retail Store sales versus 18.9% with those categories included. The lack of auto related sal~s is obviously due to the fact that the City does not have an auto mall nor will it ever have the truck stops and gas stations along the 1-10 freeway that are found in Ontario. Apparently contrary to statements in the ~tudy, the city does appear to have enough critical mass in its existing primary retail corridor to be ~Ompetitive in attractin~ new businesses. I concur with the conclusion that there is limited time to attract these retailers as they are ILkely to locate in this market prior to full buildout and that it is"i'mperative that the City Bggressively pursue opportunities to capture these retailers. QUESTIONt'~6."~ summary, throughout the report it talks about the clusterbqg of retail and that by putting commXe~l uses in close proximity to each other. the city can "create retail synergy ~d boost the productivity of the commercial sites". .. (a) Will promoting development on 4th Street have an adverse impact on the successful development that has been progressing along the Foothill corridor (both at Terca Vista and the 1-15)7 Mr. Brad Bullet Mr. David Barker December 13, 1995 Page 13 (b) Should the City consider re-zoning the South side of Footkill BIrd. in order to add to the critical mass of retail developing along that corridor (i.e. is the success of a primary commercial corridor generally more likely if consumers in both directions of traffic have retail opportunities)'?. RESPONSE: Mr. Agajanian stated that the south side of Foothill BIrd. should be kept functionally separate from the north. He discussed the fact that allowing additional surplus commercial land will "tend to dissipate the locations where commercial uses can locate". H~e stated that "commercial uses benefit greatly from synergism" by locating is such a way that they can capture sales by making the consumer "reverberate between stores" and that it is best to make as much use of exposure as possible. Mr. Agajanian continued with a discussion of how when we have too much commercial land, commercial users start to locate where land is cheap. resulting in retail uses which are spread out over disparate locations. In summary, he felt that there would not be sufficient future demand to fill the south side of the corridor and that therefore none of it should be re-zoned in order to avoid a "gap tooth corridor" of commercial uses. Mr. Agajasfian ended his discussion with an interesting description of "retail synergy". He described it as "more from less" or the concept that as you locate stores close to each other, sales in those stores increase to a level which is higher than if they were located apart. FOLLOW-UP DISCUSSION: All of the reasons given aS to what makes retail sVnergy work seems to Support the re-zonin~ of the ~Outh side of FOothill. The argument that this will create a 'gap tooth corridor" may be valid in the short run but if plasmed properly (i.e. start in a location which is closest to the existing retail core and work east from there as tenant demand dictates and as was done on the north side ~f the street) could lead to a ~VnerRristic "snowball effect" as more and more retailers choose to locate on the co'bridor. The argument that retailers will stan.to..Iocate in disparate locations throughout the city does not appear valid today as discussed in the follow-up to Question 3(a). Ajthough I have attempted to keep the above questions general in nature, I will not deny that the answers tc5 these questions or a different interpretation of the data would be favorable in our efforts to expand the types of commercial uses allowed on our site. In spite of this, I am hopeful that staff, the Commission and Council will consider the validity of these points on their own merits as they attempt to choose the best approach for the City towards its future growth. Because the Survey already includes our site in its definition of "existing vacant commercial sites", I am hopeful that our prol:~sed plan can be viewed as .being consistent with the report's recommendation to focus on developing the Foothill corridor as we are not asking to increase the 1002 acres of currently vacant commercial land. Mr. Brad Bullet Mr. David Barker December 13, 1995 Page 14 I am ~n the process of doing an analysis of the differences between thj. s newest Study and those prepared by Lewis, Mast and ourselves in order to determine why there appear to be some discrepancies in the assumptions and the conclusions. I am also re-reading the report to make sure I understand it and I may then have some more questions. I hope to have this analysis completed prior to the workshop on December 20th. As you lcno%v, Mr. Paul Blanc artended the last Planning Commission meeting and had asked me at that time for a copy of this follow-up letter. He also suggested that I distribute a copy of this to the other Co,.mcil members. I mention this only because I want to assure you that it is not my intention to subvert the process which I understand we need to go through with staff and the Pinfining Commission by providing ~formation to or dealing directly with members of the City Council. I appreciate the "open charmel" of communication which ',ve have established and I look forward to working with Staff and the Commission to arrive at the best solution for our site. SLncerely, WOHL/RA~CHO PARTNERS P e~~ ~ General Parmer ec: Mr.' Melcher Mr. Tolstoy, Mr. McNiel Mr. Lumpp Mr. Curatalo Mr. Biane Mr. Alexanher Ms. Williams Mr. Gutierrez enclosure meMission James P. Axtell Land Director of Asset Management Direct Number: (714) 757-2470 Company an ~ company RECEIVED December 11, 1995 DEC 12 1995 Planning Commissioners City Council Members City of P, ancho Cucamonga City Planner &City Manager Planning Division CITY OF RANCHO CUCAMONGA Attn: Brad Buller, City Planner 10500 Civic Center Drive Rancho Cucamonga, CA 91729 RE: CO~MMERCIAL LAND USE AND MAP. K.ET STLrDY Dear Mr. Bullet: On behalf of Mission Land Company. I would like to compliment the Planning Commission and City Council for its foresight in requesting tbe Commercial Land Use and Market Study. Mission Land Company currently owns t~vo industrial buildings as well as 47 acres of land in Rancho Cucamonga and as a land owner, Mission understands and appreciates the difficult decisions wblch must occur in order to protnote a policy of responsible long term growth. Mission has reviewed the recently completed Commercial Land Use Aod Market Study and is veO' supportive of Dr. Agajanian's conclusions. Mission feels this study is a valuable tool which will aid the City as it charts the course of future development. John Richards, Mission's Manager of Engineering, and I have artended tbe Planning Commission meeting on November 291h, the City Council Meeting on December 6th and plan to be at.the workshop scheduled for December 2011'.. In the mean time, if you feel our input could be beneficial to the planning process, we would like to extend an invitation to meet and further discuss our thoughts concerning commercial development within the City. Again, Mission Land Company fully supports the City's efforts to develop a prudent long term land use policy ~vhlcb will eoable Rancho Cucamonga to continue its success story and grow in a positive manner well into the 21st century. Sincerely, Ja~mes P. Axtell /JPA 18101 Von Karman Avenue, ~uite 800 · Irvine, California 92715-1046 Telephone (714) 757-2460 FAX (714) 752-6405 C=E=:-!2-1'5'75 t!:I:B LEWIS H MES {I!eMT. CORP. Lewis Homes Management Cerp. · ' i 156 North >to~ Avenue / P.O. BOX 670:/Up!~.mt. CaJWorr~h 91785-~70' De~embe~ 7, ~:995 ~e HonorabI~ ~r~m j. ~ex~der ~ayor ofhdho Cuc~onga : r · ~. E. Da~d B~ker Ch~ Pl~ng Cohesion D~ Mayor ~ex~d~ sd Ch~ B~k~: ~ye Me ~p~M M~ ~,e comprehensive n~re ot tour Colerci~hnd Use ~d M~ket Study (1023 1/95). We ~e in a~n',ent ith rosy ofth9 ~'ajor poi~is mad~'n t~:~epoH. we are concerned that there i3 cuffearly ~ over ~d~ce o~.retaiI zened'l~nd. We believe r~tfi2 ~hoGd occur on 4th Street near the OnmHo'~!ls prG~ ~d at intcr~tio~'x~tb.the ~way but not ~ ~e F6ot~ co~dor is n~ly built out. Rei on 4th Street ~ o~y decrees the ~zen~ of the draw for Foot~ll retailare in'the sho~ ~n. :: '" ' T~g ~ the major issue the City should ~cnsider.m appro~ing new ~jects.. No new competitive prcj~s should'be approvM u~:~ ~ig ~d ~ ~der de~elop~5~ proje~ have b~n ~ven the 9ppo~ to mmre. The 1~ h~g ~e Ci~.~ts are sever~ 'h~f d0mu!~ted projects each b~g for ~ ~me ~'t~'mB. ~s ~1 o~y s~ to reduce the ~i~ of de~eiopment as well ~ rduce land valu~ ~d rental rates. = ':' We s~ no de~d or r~n to rezone prope~ muih(ofFootSi to r~. Eel.~ed. uses ~e allowed WikhLn the ~t zoing ~ that ar~ and ~here is p~ifi~ of land to be d~elo~ be~'een Rochester : .. ..,: :'. . . . ~d the Freeway. · : We ~ ~t tcho Cuc?~mon~ is at a ~mp~e ~d~tage. ~ long'~ ihe CiW Ztim~ns the retail focus on ~s condor, hncho has an a~tage. We eve~ ~dvE~ ~ stren~h of this condor (see attached). i - . : We ~e fining r~ir~ce from r~e~ to our RecEipt Avenu~.~ite b~use ~ent housing do~ not e~st in the eastern sidd of~cho CUc~on~ ~d in Fo~ana. ~is ~d!l'holB trde for retail ~ DEC-12-i'S'-~5 l! !9 LEWIS H ME:S ~':G~'!T, COEP. 9~Zr_qgz~'SE. 70:D P.93 December7, i995 Page 2 development .~ast of !P, oChar~er. There'is a time .flo2i7 developments'i~9-i~apl~en ~ only ~cer~ ~ >~ u~ ~e proems. A CiP/poU~ of not rezoig ad~on~ l~a sou~ c.f~oot~ wo~g te~ ~ers to ~ on ~hle m~ ~d prm~-~em iota b~ odi'pos~oned by ~o '.~t to l~te Bi&o CU~ong~in the ~e ~e City ~b'Z~eeds ~o ~ mor~ ~essive m promot~g ~ d~eiopm~t to &,rapeta ~ ~ffo:'~d Fd~a5 T~s2includes spading up ~Se desi~e~ew and pe~g prdcesses of~ C~. ': :~' ' ' On the ~pm~hg of retail ~, the' numb~ used t0 ienerate demand:rare ve~ broad. >'tore ~ow~h ~ r~ ~es GU oc~ ~om tie e~ing >opulation ~l~ the repoR G~>o~. ~6~h v~l not o~y: come ~om population Forth but from capm~g more 0~ the di}posable ~ome of ~Gsli~g residents. : : .: There will b~ times that tke Ci~ i~ have t0 ~ake some tou ! thoi:es in implementing a comprehensi~:.e strat~. We wG wor~ ~th you m ~o~ you ~:~st yob in making these de:isions. · > "'b ' W:. Iook fo~'ard to ~ntinuing to work ~th: l~e City t~. exp~a the ret~ and cornmartial development >'h~e m~n~ng the qualib, of our~i~stBg de~elopm~ts. ' Sincere[y, : ;' President ~' .cc: Brad Butler ~eg'.~o~o~h. . . ... John Goodman Planning Cohesion Members5 Ci~ CouncB Meters ;~r~ November 29.1995 Mr. Brad BulleL City Planner (Via Fax: 9091987-6499) Mr. David Barker. Chairman. Planning Commission (Via Fax: 909/9894028) City of Rancho Cucamonga 10500 Civic Ce.ntet Dr. Rancho Cucamonga. CA 91729 RE: QUESTIONS FOR 11129 PLANNING COMMISSION MEETING REGARDING AGAJANIM'./& ASSOCIA.TES COMMERCIAL. LAND USE AND MARKET STUDY. Genfiemem: Per our conversation yesterday. the following are some of the questions which we discussed coneetnlng the ~c~ove referenced Study· As I mentioned in our meeting. although it does benefit our cause. I sincerely believe that it is in the city's best interest to consider these points but I do not want to appear as if ( am ariaeking Lhe credibility of Mr. Agajanian's repom Because the Survey already includes our silo in its definition of %xisting vacant cureinertial sites". I am hopeful that our proposed plan can be viewed as being consistent with the report's recommendation to foe'as on developing the Foothill corridor as we are not asking to increu3e the 1002 mca-~ of currently vacant commercial land. In any event, the following qucsfion~ may provide.useful information to the commission: l. The report suggests that the City should consider re. zoning a significant pa.,-cel of land on the north side of 4th Street adjac,en~ to the Mills Project which is currently under construction. (a) Should the City investigate the potential negative impact that promoting reJail development in an area away from its primary commercial corridor may have on its existing . ' retail bas ' · c. By adding crilical m~ss to a project loc. ated in another city, there is a good chance that Rancho Cucamonga residents and Other area shoppers will be more likely to cross the fitFeet and qx:nd dollars at the Mills rather than stay and Shop alOng the. FoothiLl corridor. (b) I[ the City is going to re--zone land for retail users, should it consider doing so in a location that will add critical mi~,s to its existing retail base and therefore make it more likely for shoppers to stay in Ranthe Cue.amonga rather than establish a new shopping patu~rn of traveling to the south side of the City.'? {c) Adding land at the 4th Street location will increase the supply avaWibl~'toTtenirnts considering that general erea which is likely to drive land prices down on both sides of the street. As land price~,.fall in that loution. will it make it more difficult for landowners in the City's primary telall corridor to compete for tenants who might consider either one of tl'?ese. WOIilL E",'VF, E.STMENI COMI'Ah"Y 2402 Michc13on. Suite 170. Irvine. Califomia92715 · (~14) 955-0115 · FAX: CTI4}'~55-3971 2. The reporl identifies ~e Foothill/I-IS interchange as the primary re~l node for shoppers from the greater market area due to its easy accessibility. Bascd on reports from industry insiders. the Circuit City located at that site is not doing as well as the Best Buy's which is located the City's mote established retail core at T~.'ra Vista. (a) Because Best Buy's is obviously drawing cusWmet from a wide geographic ar~a. Should the City consider investigating the shopping panems ~hat appear to favor the Terra Vista site?' Is it due to greater critical mass st the Tetra Visut site ot are the shoppers anracted to the 1-15 site difl'erent demographically than those shopp~g at the seemip, gly, more uvscale Tetra Vista she. -, (b) ShOuld the City Ag.~ressively seek out tenants who would consider locating at either' of these sites along iLs primary re~all corridor rather than locale in or near the Mill's site so that it can continue w build critical m.~ where it wffi most benefit iLs existing retailers? 3. The r~port suggests th~ the City should seek to capture a~ least its pro-rata share of ~uture retail expenditures based on (1) percentage of available commercial land; (2) percentage ole population; or (3) percentage of increase in population. This would indicate a capture rate of between 28% and of futore retail expenditures. (a) Neighboring cities have proven that aggressively pursuing major regional retailers can lead to capture rates in certain calegodes of 40% or higher. Should Rancho Cueamonga limit iu f~.'mre development potentia~ by assuming it cannot ctaRt!Ire rnore than its pro-rata share of-. these future expenditures? ~ .~.-.'..~., .. _ ~ ._ ~ ,..~ (b) Rancho Cu~arnonga has a median househoid i~come of bet~ween I;5.644 arid ~l,i!~~' ~ higher than its neighboring cities and ~7.~86 or 17~ higher than the subregion as a whole. Sinc~ it has the sttonge.~ de-rnol~raphic~ in hhe subar~, would it be reasonable to sugge~-i that it should be expected to caplure a higher than pro-ram share of the telall dollars spent in the subrel~ion? .. (c) Could the success o[ Tetra Vista Towrl Center and Town Center Square be an indicalor of the retailer'S desire to be locauxi as close as possible to the hcen of the City's commercial corridor and therefore its strong demoSraphi~. 4. Table 23 Lnclicams that the Total Estimued Subregional Demand for Commereiel Land Uses within ~he Community Retail and Regional Retail categories is approximately 300 acres. Projects are currently pined or under eonstr~ction in neighboring cities that wil| exceed that number of acres. yet ~hete still appear~ w be significant demand from retailers to locate within Rancho Ct~carnonga's primary commercial con'idor. Does this imply that the city should not promole additional development in these categ, ories as ther~ may no~ be sul'fi,~e~ future consumer demand to support such development?, ..~_: ~' - · .. _ ,' : L'i '?': .~- 5. On page 49. there is a disc~asion of Rancho Cucamonga's competitive disadvantages. The conclusion is that the City is disadvantaged as corepared to Onhuio, for instance, bet'~,,se it has not amassed as large of a base of retail stores and therefore, has difficulty auraainl~ new retail swres m its commercial center. The repo~ 8oes on to say ' The city can expect that ell new commercial development will be hard won and will require thai every competitive advantage be well used including the ~on of new commercial uses, cumpetiti~e ~ses. complementary uses. and the use of synergy amonl~ the cun. wncrcial uses to antact develolh'nent ~o th6 city.' Should the city aggressively seek ways to add to the existing criticel mass on the Footh[ll corridor in Order to overcome this disadvantage? 6. In summaq, throughout the report it talks about the cluster~g of retail and that by put-king commercial uses in close proximity to each o~her. the city Can "create retail synergy and boost the productivity of the commercial sites". (a) Will promoting ctcvclopmem on 4th Street have an adverse/rapact on the successful development that has been progressing along the Foothill corridor (both at Tetra Vista and the 1-15')? Co) Should the City reconsider zoning the South side of Fo~.th~l BIrd. in order to add to the critical mass of r~.l deve!opi~g along that corridor7? (c) Ls the success or' a prlmlr~ c~'nn~.rclel cor~dor ge. ncr-ally more l~kely if consumers in both directlone of traffic have retail oppoaun~ties? Although the above questions are gemerel [n nature, I did have some more det~led questions directly related to our site which I can cithex discuss with you at the open session or in the next week. I am in the process of dcing an analysis of the differences between this newest rcport and those prepared by LewLs, Masi and ourselves in order to determine why there appear to be some discrepasxcies in the assumptions and the conclusions. I am also re-reading the report to make sure I unclcrstand it and I may then have some more queStions. I appreciate the 'open channel" of communication which we have established end I look forward to working w~th Staff and the Cornmlssion to arrive at the best sottnion for our site. SL-u:~e~ely, WOHL/RANCHO PARTlqERS AGAJANIAN ~'ASSOCIATES Development Economic 6 planning Consultants Rancho Cucamonga COMMERCIAL LAND USE AND MARKET STUDY Prepared for: City of Rancho Cucamonga Community Development Depa~nent Planning Division 10500 Civic Center Drive Rancho Cucamonga, California 91730 Received and Filed - December 20, 1995 Final Print January 18, 1996 120 Newport Center Dri~ Suite 248 Newport Beach, CA 92660 (714) 640-0664 FAX (714) 640-0668 Rancho Cucamonga Commercial Land Use and Market Study Table of Tables Page 1. Subregional Population by City ............................... 10 2. Subregional Household Population by City ....................... 12 3. Subregional Number of Households by City ...................... 12 4. 1995 Subregional Age Profiles by City .......................... 12 5. 1995 Annual Household lncome Profdes by City ................... 14 6. Subregional Occupations of Residents by City ..................... 14 7. Subregional Total Residential Units by City ....................... 15 8. Subregional Single Family Dwellings ........................... 15 9. Subregional Multi-Family Dwellings by City ...................... 15 10. Estimated Number ofWage and Salary Workers by lndustry ........... 16 11. Pro~le oflnduslries Employing Residents by City .................. 17 12. Reported Gross Receipts ofRancho Cucamonga Businesses ........... 19 13. Taxable RetaiI Sales ....................................... 20 14. 1993 Retail Sales Capture by Category .......................... 22 15. 1993 Retail Sales Capture by Category for Rancho Cucamonga ......... 24 16. Rancho Cucamonga Commercial Land Use Inventory ............... 29 17. Per Acre Assumptions for New Commercial Development by Land Use .. 33 18. Annual Revenue and Service Cost Assumptions .................... 33 19. Net Fiscal Impact of Developmem Outside RDA Project Area .......... 34 20. Net Fiscal Impact ofDevalopment Inside RDAProjeetArea .......... 35 21. SubregionalDwellingUnitComparisen ......................... 37 22. Subregional Population Comparison ............................ 37 23. Estimated Subregional Demand for Commercial Land Uses ........... 39 24. Subregional Commercial Land Use Comparison ................... 43 25. Potential Sites Available .................................... 44 26. Potential New Commercial Development in Rancho Cucamonga ........ 45 27. Scenario Measures and Targets ................................ 55 28. Scenario Performance - Capturing Retail Sales Leakage .............. 56 29. Scenario Performance - Capturing Minimum Market Demand .......... 57 30. Scenario Performance - Capturing Maximum Market Demand ......... 58 31. Scenario Performance - Capturing Population Growth Demand ......... 59 32. Scenario Performance - Capturing Site Availability Share ............. 60 33. Scenario Performance - Fiscal Break Even ........................ 61 34. Scenario Performance - Share ofBuildout Population ................ 62 35. Summary of Scenario Performance ............................. 63 Rancho Cucamonga Commercial Land Use and Market Study Table of Contents Page L INI'RODUCI1ON A. Study Issues and Objectives ............................ 1 B. Summary of Findings ................................. 2 C. Available Land Use Options ............................ 6 IL EXISTING CONDITIONS A. Population and Housing Characteristics .................... 8 B. Economic Conditions ................................ 13 C. Commercial Land Inventory ........................... 25 D. Fiscal Performance of Commercial Land Uses .............. 30 Ill, IVLARKETDEMANDCHARAt;I'ERISTICS ................... 36 IV. AVAIl ,ABLE COMMERCIAL ACREAGE A. Subregional Cormmercial Land Supply .................... 41 B. Rancho Cucamonga Commercial Sites .................... 44 C. Planned Subregional Commercial Development ............. 45 D. Competitive Advantages\Disadvantages of City Sites .......... 47 V. COMMERCIAL DEVELOPMENT SCENARIOS A. Scenario Performance Measures and TargeB ................ 51 B. Commercial Development Scenarios ..................... 53 VI. STUDY FINDINGS A. CompamtiveAnalysisofScenm'iolmpacts ................. 64 B. lmplications for Commercial Land Use Policy .............. 64 VIL AVAH~ABLE LAND USE OPTIONS A. Long Term Land Use Options .......................... 68 B. Short Term Land Use Options .......................... 71 i Rancho Cucamonga Commercial Land Use and Market Study Table of Figures Page 1. Populatinn Trends by City ................................... 10 2. Rancho Cucamonga Population Growth Rate ...................... 11 3. 1991-1993 Employment Growlh by Sectors ....................... 17 4. Share ofReported1994 Gross Receipts in the City by Business Type ..... 18 5. Retail Sales Capture Rate Trends by City ......................... 21 6. Share ofBuildout Population ................................. 38 7. Subregional Commercial Land Demand to Buildout ................. 40 8. Subregional Commercial Land Supply by City ..................... 43 9. Summary of Scenaxio Performance ............................. 66 Table of Maps 1. Cities in Subregional Area .................................... 9 2. Rancho Cucamonga Subareas ................................ 26 3. Generalized Location of Commercial Areas ....................... 42 4. Competitive Opportunities and Constraints ....................... 50 iii I. INTRODUCTION The purpose of this repo~ is to present the fmdings from the Commercial Land Use and Market study and the resulting strategic commercial land use options formulated to Mdress currant commercial development issues in the City of Rancho Cucamonga. A. STUDY ISSUES AND OBJECTIVES The City ofRancho Cucamonga has recently added new commercial acreage as a result of several land use amendments. This trend has raised important issues regarding the type, amount and location of existing and future commercial uses desired within the city. There are specific concerns regarding the Ontario Mills development and its impact on the north side of 4th Street, the future use of the Southern California Edison right-of- way, proposals for new retail centers, proposals for commercial recreational uses, end the economic performance of the Foothill corridor in general. These concerns need to be addressed within the context of a clear and relevant commercial land use policy for the City of Rancho Cucamonga. The essential land use policy issue facing Rancho Cucamonga is "how much commercial land is enough?" This planning policy question has no easy answer because it is dependent upon the interaction of three key elements. These elements are: 1 ) the dynamic supply/demand forces of subregional commercial land markets, 2) competitive commercial site development oppommities within the city, and 3) the city's ueed to maintain fiscal balance and ensure future municipal services. Analyzing the complex interaction between these three elements will help identify which future commercial development scenarios offer the best balance for Rancho Cucamonga. The approach used in this study analyzed scenarios of alternative future commercial site oppommities in Rancho Cucamonga by looking comprehensively and with an objective view at commercial development opportunities and constraints within the city. Each scenario rested was analyzed with regard to its overall performance. Comparing the outcomes for each scenario revealed which combination of commercial types, their mounts and their locations provides the greatest fiscal benefits, the greatest development synergy, and the least competitive risk within the absorption constraints of the subregional commercial land markets. In short, this study can help sort out the most favorable commercial land use development strategy for the city by addressing the following commercial land use issues: 1. How much short and long tenn commercial development can be masonably absorbed and supported before fumher development mates significant negative business, market and fiscal impacts? 2. Is the overall proportion between commercial, residential and indusUial land within the city suitable to maintain long term market support and fiscal balance? 3. Does the city need more or less commercially zoned land in the city's commercial subareas to maintain market competitivehess and fiscal balance? 4. What would be the impact of new commercial land upon existing commercial supply ? 5. What are the fiscal consequences if commercial development occurs in industrial zoned areas within the city? B. SUMMARY OF FINDINGS The following statements highlight the Findings of the study analysis. A full discussion of the basis for these findings are presented in the body of the report. The Section of the report dealing with the topic is referenced in the heading. i. Population and Housing (Section II.A) · The long term cycle between rapid growth and slower growth will continue to follow the larger economic trends within southern California and the nation. · Rancho Cucamonga has been growing at a faster rate than the subregion since 1985. · Rancho Cucamonga is largely made up of older and wealthier families, a largely white collar labor force, living in mostly single family homes. ii. Employment, Economy and Retail Sales (Section II.B) · County employment is growing, though at a much slower rate now than in the recent past. · Retail and service sectors are the strongest and most consistent generators of employment growth among all industrial sectors, as evidenced by their high growth rates (see Figure 3). · The Rancho Cucamonga labor force is well suited to serve the retail and service growth industries because of the city's higher than average proportion of white collar occupations (which includes professional serviees and retail sales). · The city has an economy of about $1.635 billion in size with 63.8% of gross receipts generated by sectors using commercial land. · The city has been increasing its share of subregional retail sales growing from 14.7% in 1980 to 19.3% in 1994. · Retail sales leakage of total taxable sales in Rancho Cucamonga is estimated at $241,688,000. About $174,635,000 of the total mount is sales leakage from retail store sales. · The predominant sources of retail sales leakage in Rancho Cucamonga are from home furnishings, building materials, auto dealers and service stations stores (see Table 15). iii. Fiscal Impacts of Commercial Land Uses (Section II.D) · All of the commercial land uses analyzed indicated a positive fiscal impact except office dcvelopmant outside of the RDA project area. · Retail and lodging commercial uses generate the greatest positive fiscal impacts due to the retail sales tax and transient occupancy tax revenues respectively. · Overall, current commercial uses generate between $2.16 and $2.79 in revenues for every $1.00 in municipal service costs. · Commercial development in the RDA project area has better fiscal impacts than commercial development outsid~ of the RDA project area. iv. Demand Analysis for Commercial Land Uses (Section III) · The subregion now accommodates 72.1% of the buildout population, leaving only 27.9% to support all future commercial subregional development. · There is an estimat~l subregional demand for 1,670 acres of commercial development. This translates into 453 acres of retail uses, 934 acres of office uses, 118 acres of commercial recreational uses, 57 acres of lodgings and 108 acres of other commercial uses within the subregion by buildout. · The bulk of the commercial growth in Rancho Cueamonga will have to be competitively attract~l to the city. v. Invento~ of Commercial Land Supply (Section IV.A) · There is a enmmer~al land supply of 5,742 acres in the subregion with 3,112 acres undeveloped. · Rancho Cucamonga has a total of 1,477 acres of commercially zoned :land, about 26% of the subregional total. · Rancho Ctr, amonga has 1,002 acres ofanxleveloped commercially zoned land, or about 32% of the total subregional supply of undeveloped commercial land. vi. Commercial Acreage in Rancho Cucamonga (Section IV.B) · In addition to the 1,002 acres of currently undeveloped commercially zoned land, there is the potential for rezouing an additional 7 12 acres to commercial land uses in Rancho Cucamonga. · Rancho Cucamonga appears to have an abundant current supply and potential supply of undeveloped commercial land, totaling about 1,714 acres. vii. Rancho Cueamonga's Competitive Advantages~Disadvantages (Section IV.D) · The single greatest advantage for city commercial sites is their proximity to the subregional growth area along the foothills within the city and in Fontaria. · The I-15 corridor presents the city with major access points to attract both subregional and regional trade. The key commercial point along the I- 15 is the Foothill Boulevard on\offramp. · The city has ample amounts of undeveloped commercial land in nearly all subareas. · Runcho Cucamonga is competitively disadvantaged with its lower share of retail sales capture because it is difficult to stop the natural tendency for new retail uses to locate where there are large existing retail centers with established consumer habits. · The city lacks enough significant commercial attractors to make the city a strong commercial destination at this time. viii. Findings from Scenario Analysis (Section VI.B) · Based upon the scenario analysis it can be concluded that a reasonable target for futme commercial development in Rancho Cucamonga would be between 400 m 550 acres of commercial development. This new commercial development would be in addition to the existing developed commercial base. This amount of commercial development can be masonably supported and attracted to the city by buildout. Additionally, this mount of commercial development will marginally increase the share of commercially generated General Fund revenues by buildout. · The scenario analysis indicates that there is enough commercially zoned undeveloped land to accommodate the city's needs to buildout. It appears that there may be a surplus about 500 acres or more of currently undeveloped commercially zoned land in the city. · Rancho Cucamonga is competitive enough to capture the 419 acres of commercial development m at least maintain the current 28.8% share of commercially generated General Fund revenues. This addresses the concern about bow much additional commercial development is needed to break even. · Rancho Cueamonga should focus the bulk of its commercial development effort toward the Foothill Boulevard corridor, especially in the primary retail node near th~ I- 15 on~ff ramp. Secondary effort should be directed toward the development of Foothill corridor in general, sites near the 4th Street on\off ramp to the I-15, and sites near the future Highway 30 on\off ramps. C. AVAILABLE LAND USE OlYrIONS Attracting 400 to 550 acres of commffcial development to Rancho Cueamonga will require a sirong and focused effort Commercial land nsc d~cisions in the this last phase of development will have a lasting effect upon the fiscal health of the city. It is critical that the rcraaining commercial development in the city bc carefully selected and sitecl in order to ensure positive community benefits and land use synergy. We would recommend a commercial development strategy which combines the following land use options, summarized here, and discussed in detail in Section VII of this report. i. Long Term Land Use Options ® Reserve Excess Undeveloped Commercially Zoned Land · Promote Aggressive Commercial Development · Build Synergy With Commercial Siting · Orient New Retail Toward Foothill Growth Areas · Consider Urban Entertainment Center at Regional Mall Site · Maintain Foothill Boulevard as the Principal Commercial Corridor · Develop a Retail Presence on 4th Street · Continue the Haven Avenue Office Corridor · Maximize Fiscal Benefits from Commercial Development · Maintain Northern Commercial Areas ii. Short Term Land Use Options · Continue to Promote Commercial Development Along Foothill Boulevard · Provide Retail Sites on 4th Street · Consider the Need for Commercial Uses on Archibald Avenue · Find a Hotel Site to Benefit from Raceway Development · Expand Commercial Sims at the 1-15XFoothill Boulevard On\OffRamp · Monitor Commercial Land Use Performance and Inventory ® Initiate Study Detailing Proposed Commercial Land Use Changes · Initiate Feasibility Study for Entertainment Center at Mall Site II. EXISTING CONDITIONS The City of Rancho Cucamonga is located in the western end of San Bernardino County, in the Inland Empire. The city is surrounded by the cities of Ontario, Funtana, and Upland, by unincorporated County territory, and the San Bcmardino National Forest (see Map 1). The area bounded by Rancho Cucamunga and the surrounding cities make up the competitive cc~nmercial subregional trade area for Rancho Cucamonga. Consequently, this Section will examine the trends end conditions in Rancho Cucamonga within the context of this subregional trade area, as depicted on Map 1. The demographic, economic, market, land use and fiscal conditions within the' subregion defme the direction and potential for future commercial growth and development in Rancho Cucamonga. This section gvicws the existing conditions and trends of these important commercial development factors for Rancho Cucemonga and the subregional trade area. A. POPULATION AND HOUSING CHARACTERISTICS The City of Rancho Cucemonga has an estimated January 1, 1995 population of 117,903 residents, or 27.0% of the subregional population of 436,761 residents, as indicated on Table 1. The city is second largest in population within the subregion with 27.0% of the current subregional population. The city population has more than doubled ~'om its 1980 population of 55,250 residents, indicating very rapid pace of urban growfit Figure 1 presents the population growth trends for Rancho Cucamonga and the other cities within the subregional trade area. Map 1: Cities in Subregional Area Tablel: Subregional Population by Cityx CIty 1980 1985 ~{99~ 1991 1992 1993 1994 1995 RanchoCucamcnga 55,250 66,012 101,409 105,014 110,008 113,360 115,257 117,903 Folmma 37,105 49,481 g7,535 91,555 97,097 101,328 103,458 105,240 Ontario 88,820 108,950 133,179 136,030 138,248 141,565 144,201 145,743 Upland 47~647 541747 631374 64v220 651238 661841 67~600 671875 SubregionalTotal 228,822 277,869 385,497 396,819 410,591 423,094 430,516 436,761 Figure 1: Population Trends by City o i Recent population growth in the city has been strong, having added 16,494 residents ~tween 1990 and 1995, or 32.2% of the total subregional population growth. For this same 1990 to 1995 period, Rancho Cucamonga's average annual population growth rate was 3.25%, higher than the subregional growth rate of 2.66%, as depicted on Figure 2. The city's population growth rate was more rapid in the 1985 to 1990 period when the addition of 35,397 new residents yielded an average annual growth rate of 10.72%, compared to the subregional growth rate of 7.74 % for the same period. The city added 10,450 new residents during the 1980 to 1985 period, growing at an average annual growth rate of 3.89%, lower than the subregional growth rate of 4.29% for the same period. Figure 2: Raneho Cueamonga Population Growth Rate ~ Su~g~onal Avc~c These population growth trends clearly indicate that Rancho Cucamonga grew ~ately in the first half of the 1980's, then grew very rapidly in the second half of the 1980's, ~ thc~ slowed in the first half of the 1990's. This long term cycle between rapid growth and slower growth will continue to follow the larger economic conditions within southern California and the nation. This cycle of slower and faster growth is also reflected in many of the other population related characteristics, such as the city's household population (Table 2), and the number ofhousehulds (Table 3). Table 4 indicates that Rancho Cucamonga has a population with a median age of 29.9 years. This indicates that Rancho Cucamonga residents are older than the subregional population which has a median age of 28.2. Fontaria and Ontario residents are younger than Rancho Cucamonga residents with median ages of 25.8 and 27.0 respectively. Table2: Subregional Household Population by City~ City 1980 1985 19901 1991 1992 1993 1994 1995 RanchoCacamonga 54)68 65,731 101,069 104,925 107,899 111,139 112,974 115,421 Fonlana 36,679 48,999 86,958 91,069 96,611 100,842 102,972 104,754 Ontario 88,135 108,252 128,510 135,122 137,333 140,706 143,407 144,873 Upland 47,167 54,256 64~497 63,759 64.822 66.310 67,069 67,344 8ubregionalTotal 226,949 277,239 381,034 394,g75 406,665 418,997 426,422 432,392 Table3: Subregional Number ofHouseholds by Cityx ~ 1980 1985 1990z 1991 ~1992 1993 ]994 199~ RanchoCucaraonga 17,017 19,944 33,647 34,975 36,119 37,046 36,363 37,232 Fontaria 12,371 16,255 26,288 27,520 28,535 28,986 30,219 29,759 Ontario 29,607 35,912 40,210 40,776 40,560 42,836 43,086 42,609 Upland 17,739 20.099 23.070 23,549 231248 231887 23,900 23,596 SubreglonaiTotal 76,734 92,210 123,215 126,820 128,462 132,755 133,568 133,196 Table 4: 1995 Subregional Age Profdes by City P, anc~ Rancho Cucamonga also has the highest median household income, estimated at $53,087 in 1995, as indicated on Table 5. This compares to the subregional median income of $45,501. Rancho Cucamonga households are highly concentrated (41.3%) in the $50,000-$99,999 household income group. Table 6 indicates that the occupations of city residents reflect their income. Rancho Cucamonga has 65.0°,/o of its labor force in white collar occupations, compared to 56.7% for the subregion. The highest concentrations of the city's labor force arc in managerial\executive and clerical occupations. In contrast, Rancho Cucamonga has a low concentration of blue collar occupations at 35.0% of the labor force, compared to 43.3% for the subregion. Table 7 indicates how the city's housing development parallels the city's population growth. Similarly, Tables 8 and 9 indicate that single family and multi-family residential units also parallel the population trends. Rancho Cucamonga is currently occupying 3.10 persons per dwelling unit. This relatively low occupancy ratio is reflected in the fact that Rancho Cucamonga has 27.9% of the subregional housing stock with only 27.0% of the subregional population. This indicates that the city is a predominantly single family home community, though 24.0% of stock is multifamily. These population and housing conditions and trends reveal that: · The king term cycle between rapid growth and slower growth will continue to follow the larger economic conditions within southern California and the nation. · Rancho Cucamonga has been growing at a faster rate than the subregion since 1985. · Rancho Cucamonga is largely made up of older and wealthier families, a largely white collar labor force, living in mostly single family homes. B. ECONOMIC CONDITIONS Table 10 indicates employment characteristics for the San Bernardino - Riverside Counties for 1993, the most recent employment data available. The employment growth rate for the 1983 to 1993 period was 65.4%, or the addition of 289,700 new jobs. The largest sectors of employment growth were retail (67.2% growth), services (89.5% growth), and finance, insurance and real estate (FIRE)(62.2% growth). In the most recent period between 1991 and 1993, the area experienced very slow growth, adding about 13,900 new jobs in 3 years. Though slow, this growth rate is still positive, in comparison to employment declines in Los Angeles County. Retail, service and finance, insurance and real estate(FIRE) sectors are the fastest growing employment sectors in San Bemardino and Riverside Coonties. As depicted Table 5:1995 Annual Household Income~ Profdes by City Ranch~ Annual Household Income Cucumon~a Fontaria Ontario Upland Subre,ion tz~ than $5,000 - $24,999 18.5% 26.6% 27.6% 24.40/0 24.3% $25,000 - $49,999 27.8% 33.8% 33.90/0 25.2% 31.2% $50,000 - $99,999 41.3% 34.70/0 32.3% 32.5% 35.5% $100,000 - over $150,000 12.4°/o 4.90/0 6.0% 14.9°/0 9.0% ToOd 100.0°/0 100.0°,~ 100.0% 100.0% 100.6°/0 Median household income :$53,087 $41,841 $40,892 $47,443 $45,501 Average household incc{m $60,175 $43,157 $44,190 $62,300 $51,645 Tabk6: SubregionalOccupationsofCityResidents Rancho Craltsmen 12.7% 16.3% 16.0% 9.9°/0 14.0% Operatives 7.8% 14.6% 14.3% 6.3% 11.1% Services 10.8% 12.3% 12.5% 11.3% 11.8% Labor~ 3.0% 5.90/o 6.0o/0 3.5% 4.7°/o Fannm~ For~ry, Fishing 0.7°/0 1.5% 2.90/0 1.3% L7% Total Blue Collar 35.0% 50.6% 51.7% 323% 433% Subregional Total 100.0% 100.0'/0 100.0% 100.0'/0 100.0% Table 7: Subregional Total Residential Units by City CitT 1980 1985 1990~ 1991 1992 1993 1994 1995 RanchoCucamonga 17,839 22,190 36,368 37,497 38,114 38,410 38,852 39,368 Fontana 13,940 18,122 29,300 30,411 31,260 31,831 32,300 32,619 Ontario 31,339 36,221 42,620 42,897 43,258 43,510 43,940 44,133 Upland 181595 20,924 241480 24.633 24~765 24.828 241862 24~884 SubreglonalTotal 81,713 97,457 132,768 135,438 137,397 138,579 139,594 141,004 Table 8: Subregional Single Family Dwellings ~ 1980 1985 1990~ 1991 1992 1993 1994 1995 Rancho Cucamoflga 15,425 17,922 24,439 27,445 27,773 28,062 28.428 28.877 Fotliaxm 10,283 13,198 20,362 22,047 22,868 23,254 23,943 24,264 Ontario 22,894 24,477 25,359 28,241 28.315 28,461 28.566 47.143 Upland 12,095 13 739 141052 151674 15,742 151803 15,837 151859 Subregional Total 60,697 69,336 84,706 93,407 94,698 95.580 96,774 116,143 Table 9: Subregional Multi-Family Dwellings by City City 1980 1985 1990~ 1991 1992 1993 1994 1995 RanchoCucamonga 1.520 3,248 8,423 8,679 8,969 8,976 9,052 9,119 Fontana 3,068 4,268 8.188 7,564 7,592 7.572 7,557 7,555 Ontario 6.788 9,707 13,989 12,284 12,581 12,670 13,080 13,165 Subregional Total 17,402 23,767 39,090 36.627 37,306 37,384 37,855 38,005 Estimated Number of Wage and Salary Workers by Industry San Bernardino - Riverside MSA Annual Average Employment by Industry Employment Change Period 1983-1993 1988-1993 1988-1990 1991-1993 in Figure 3, the employment growth leaders are service employment at 3.5% growth, retail employment at 3.5% growth, and finance, insurance and real estate employment at 2.6%. This is significant for this study since these employment growth sectors are mostly commercial land users. Figure 3:1991-1993 Employment Growth by Seemrs* 4,0 % Tablell: Profde oflndustries Employing Residents by City Rancho Industry Cucaznc41~a Fontaria Ontario Upland Sub~aion Conunercial Industry Retail Trade 16.4% 16.8% 17.9°/0 17.1% 17.1% Finance, Insurance, Real ~ 7-8°~ 5.0°/0 5.70/0 8.4% 6.6% Bus~,~,s/Repair Services 5.2% 5.7%/0 5.6% 5.3% 5.5% Personal Se~4ces 2.4% 2.3% 2.4% 2.9°~ 2.5% ~ & Retreatleo 1.1% 1.2°/0 1.2% 1.1% 1.2% Professional & Related Services 19.6% 17.3% 15.9°/0 24.0°~ 18.7% Public Athninistrafion 5.5% 4.7o/0 3.2% 4.4% 4.4o/0 Sobtotal $8.0% 53.0% 51.9% 63.2% ~6.0% Non-Commercial Industry Agricultur~ 1.3% 1.70,~ 3.5% 2.00/0 2.2% Construction 8.80/0 9.8o/0 8.9°/o 6.5% 8.6% Manufacturing 18.2% 20.70/~ 23.0°/~ 16.5% 20.0% Other 13.7°/0 14.8~ 12.70~ ll.ge/0 13.2% SANBAG estimates that Rancho Cucamonga had an estimated employment of 37,271 in 1994. Table 11 indicates that the Rancho Cucamonga labor force is predominantly (58.0%) engaged in commercially related industries, such as retail trade, professional services and personal services, suggesting that the city's labor force is able to service commercial business growth in the subregion. Table 12 describes the dimensions of the Rancho Cucamonga economy, based upon business liceuse information for 1994. As indicated, the city has an overall economy of about $1.635 billion in size. As depicted in Figure 4, the largest components of the economy are 40% retail, 17% services, and 9% finance, insurance and real estate (FIRE). These commercial land users account for 63.8% of the gross reported receipts generated by Rancho Cucamonga businesses. Figure 4: Share of Reporttd 1994 Gross Receipts in the City byBusiness Type Table 13 describes the mount of taxable retail sales recorded for the city and the subregion. The subregional retail sales capture rate for Rancho Cucamonga has been steadily growing ~'om a 14.7% share in 1980 to a 16.5% share in 1990 to a 19.3% share in 1994, as indicated on Figure 5. Despite this growth in the retail sales capture rate, the city captures only 19.3% of the subregional retail sales with 27.0% of the subregional population. This clearly indicates that the city is experiencing retail sales leakage even while the share of leakage is getting smaller. Table 12 Reported Gross Receipts of Rancho Cucamonga Businesses Businesses < $25,000 Gross Recei ts Businesses > $25~000 Gross Receipts # of Gross Avg ~per Total All Businesses # of Gross Avg $ per # of Gross Avg $ per % of Tot Commercial Businesses Bus. Receipts Business Bus, Receipts Business Bus. Receipts Business Receipts Refail Businesses Apparel 35 $175,265 SS,00g 32 $16,S0~,211 $525,28g 67 $16,994,476 $530,295 1.04% Autetnolivc Deale~ 12 $1g,291 $1,524 40 $5g, 122,236 $1,453,056 52 $58,140,527 Buildins Materials 14 $133,139 $9,510 27 $13,963,945 $517,1S3 41 SI4,097,084 $~26,693 0.86% Eatin~rinkingpInces 40 $4g,000 $1,200 135 $77,91S,975 $577,17g 175 $77,966,975 $57g,37S 4.77% Food Store~ 16 $105,159 S6,572 53 $177,225,g31 $3,343,884 69 Sl77,330,990 $3,350,456 10. g4% Furniture 49 $134,520 S2,745 64 $37,154,422 $Sg0,53g 113 $37,288,942 $583,283 2.28% General Merchandise* I SO SO 7 Sl13,1g0,|31 $16,168,590 8 SlI3,1S0,131 OzlR'tRe~ailOutlets 343 $g41,46g S2,453 I~0 Sl56,227,016 Sg22,247 533 $157,068,484 S824,701 9.60% Subtohtl Re~tl Outlets SI0 $1,4SS,R42 529,013 S48 S6S0,601,767 $1,18'7,~30 1,0~ 56~2,0~7,609 51,216,242 39,S6% Services Businesses Auto Repair 37 Sg7,015 S2,352 79 $2~,017,798 S316,681 I16 S25,104,SI3 $319,033 1.53% l~sincssServices 547 $1,64S,330 $.3,0|3 190 $97,S16,754 $514,S25 737 $99,465,0S4 $517,838 6.0S% Ente'~inment 53 $63,036 S1,199 22 $13,253,916 SO02,451 75 $13,316,952 $603,640 0.81% ttealthSe~vices 40 $104,532 52,613 117 $45,848,193 $391,865 157 $45,952,715 S394,47g 2.g1% Lodging* I SO SO 4 $1,551,470 $3S7,S6S 5 $1,551,470 $3S7,868 Mirc. Repair 67 $255,260 $3,810 46 $5,979,915 $129,~98 113 S6,235,175 $133,80S 0.38% Personalse~ic~ 333 $1,34g,648 $4,050 132 $26,962,469 $204,261 465 $2g,311,117 $20S,311 1.73% Prof~sionalSe~ic~ 237 $913,397 $.3,854 190 $53,316,226 S2S0,612 427 $54,229,613 $294,466 3.31% OtherSe~ic~ 13 $57,966 S4,459 4 $487~450 $121,g63 17 S545~416 $126,321 O.O3% Subtotal Servlee Outlets 1,37.R $4,47&174 ~3,.372 784 S270,234,1R! $344,686 2,112 S274,712,3~ Fmaat-e, Ins, Real E.~a~e 142 1863,120 S~07S 210 S149,S41..292 ST12,t01 3S2 S~0,404,412 $71g,lRO 9.19% AH Other ,AS and Mining 34 S33g,540 S6,269 36 $5,479,514 $152,209 ~0 $5,glg,054 $15S,47S 0,36% Cot~ru~on 295 $1,100,521 S3,~1 119 $17,455,515 $146,695 404 $1g,556,036 Sl50546 1.13% l~anufacmring 331 $98,678 $29S 49 $25,156,469 $513,397 380 $25,255,147 S513,695 1.54% ~hole~leTrade 179 ~420,317 12,34g 166 $50g,750,S14 ~3,064,764 345 $509,171~131 53,067,112 31.12% Sebtoeal Other O~lets ~49 $1,9~8,0~6 52,306 370 $~R42,312 $1,-ai04,979 1~19 SS~,g00,368 $1,507,286 34.16% TOTALSALLOUTLETS ~,~29 $8,7~,~,192 S3,0~ L912 Sl,627,219,,~2 $~1,0~6 . 4,741 $1,63S,~'~'4,744 SK~4,1SI Table 13 Taxable Retail Sales (O00's) 1980 198~ 1990 1991 1992 1993 1994 Taxable r;.,~d Taxable P_,;,,; Taxable Percent TaxaMe Pe~ent Taxable P6,,~,.; Taxable Pe~ent TaxaMe percent Uphad Figure 5: Retail Sales Capture Rate Trends by City The sources of retail sales leakage by each retail sales category for Rancho Cucamonga are presented on Table 14. The predominant sources of retail sale leakage are identified by the low capture rates, those below the city's capture rate of 19.4%. Auto dealers and auto supplies in Rancho Cucamonga have the greatest leakage since the category only captures 2.4% of all subregional sales. Similarly, Rancho Cucamonga is experiencing leakage in home furnishings sales (10.1%), building materials (11.5%), and service stations (13.7%). Pc~ capita retail sales capture rate also reveal the dimensions of retail sales leakage in Rancho Cucam~ga. After dividing taxable retail sales for Rancho Cucamonga end the subregion as a whole by their respective populations ( fi'om T able 1 ) the amount of per capita retail expenditure c~n be estimaf_~ at $5,247.78 for the subregion and $3,707.24 for Rancho Cucamonga. This gap represents a total taxable retail sales leakage of $241,6gg,000 for Rancho Cucamonga in 1994. Of this amount, the estimated leakage from retail stores is $174,635,000. The sources of the sales leakage in Rancho Cucamonga is tinther deemed by considering the conc~mtratiun of subregional retail sales capture for each retail category. Table 15 presents the ratio of sales in Rancho Cucamonga to both the subregional market area (see Map 1) and San Bernardino County. In this table a value of 1.0 indicates that the city is capturing its relative share of all of the retail sales for that Table 14 1993 Retail Sales Capture by Category Ranch, Cucamonga Fontaria Ontario Upland Market Area Total Taxable Trans~ Percent Taxable Tran~ Percent Taxable Trans. Percent Taxable Trans. Percent Taxable Trans, Percent CommercialUse (000's) Capture (000's). Capture (000's) Capture (000's) Capture (000's) Capture Reta~ Stores Apparel Stores $16,055 31.6% $10,656 21.0% $11,103 21.8% $13,040 25.6% $50,854 100.0% General Merchandise Stores $128:284 38.3% $74,424 22.2% $86,826 25.9% $45:203 13.5% $334337 100.0% DrugStotes $11;21 28.3% $7,891 19.1% $10)93 25.1% $11)78 27.5% $41)83 100.0% Food Stores $58,684 27.6% $48,818 22.9*,4 $67,514 31.7% $37317 17.7% $212,733 100.0% packaged Liquor Stores $3,441 21.9°,4 $3,330 21.2% $6,161 39.3% $2,749 17.5% $15,681 100.0°,4 Eating and Dfinking Places $62,940 24.0°,4 $49,631 18.9',4 $99,645 38.0°,4 $49,923 19.0'/o $262,139 100.0°,4 Home Furnishings $5,060 10.1% $18,006 35.9*,4 $10,636 21.2% $16,478 32.8% $50,180 100.0% Bldg. Matrl. and Farm Implmts $22,658 11.5% $32,270 16.4% $86,142 43.8% $55,815 28.3% $196,885 IO0.O% Auto Dealers and Auto Supplies $11,861 2.4% $125,593 25.0°,4 $293,644 58.4% $71,883 14.3% $502,981 100.0°,4 Ser~i~ Stations $36,755 13.7% $54)78 20.2% $134)36 50.0°,4 $43,469 162% $268,938 100.0% Other Retail Stores $62,794 22.1% $37,527 13.2% $126~018 44.4% $57~453 20,2% $283,792 100.0% Subtotal Retail Stores $420,253 18.9% $462,524 20.8% $932,418 42.0% $405,108 18.2% $2,220,.303 100.0% AII Other Outlets $211,784 20.4% S181,610 17.-~% S568,194 54.6% $79,115 7.6% $I,040,703 100.0% TOTALS ALL OUTLETS $632,037 19.4% $644,134 19.8% SI,500,612 46.0% $484,223 14.8% $3,261,006 100.0% category. A value below 1.0 indicates that the city is capturing less then its relative shareofthetetal subregional retail sales for that category. Conversely, avalue above 1.0 indicates that the city is capturing more then its relative share of the total subregional retail sales for that category. Table 15 indicates that Rancho Cucamonga is capturing less then its share of subregional market area sales in every retail category except apparel (1.18), general merchandise (1.43), drag stores (1.06) end food stores (1.03). The greatest leakage in Rancho Cucamonga is oceunmg in the auto dealers end auto supphes, home furnishings, building materials and service station categories. Comparison of the city's retail sales capture rate to both the subregional market area end Sen Bernardino County appear roughly equivalent, suggesting that the subregional market area closely minors the retail expenditure patterns within the county as a whole. These employment, economic end retail sales conditions and trends reveal that: · County employment is growing though at a much slower rate now then in the recent past. · Retail end service sectors are the strongest end most consistent generators of employment growth among all industrial sectors, as evidenced by their high growth rates (see Figure 3). · The Ranclio Cucemonga labor force is well suited to serve the retail end service growth industries because of the city's higher then average proportion of white collar occupations (which includes professional services end retail sales). · The city has en economy of about $1.635 billion in size with 63.8% of gross receipts generated by sectors using commercial lend. · The city has been increasing its share of subregional retail sales growing from 14.7% in 1980 to 19.3% in 1994. · Retail sales leakage of total taxable sales in Rancho Cucamonga is estimated at $241,688,000. About $174,635,000 of the total amount is sales leakage from retail store sales. · The predominent sources of retail sales leakage in Rancho Cucamonga are from home furnishings, building materials, auto dealers and service stations stores (see Table 15). Table 15 1993 Retail Sales Capture by Category, City of Rancho Cucamonga 1980 1985 1990 1991 1992 1993 Business Use Am County Ai~-a County Ares County Arm C~unty Am County Ares County Rotaft Stores Appsrcl Stores 0.65 0.37 0,92 0.62 0.93 0.55 1.03 0,65 1.07 0,70 1.18 0,69 C~-neral Mcrchandlsc Storcs 0.06 0.03 0.27 0.20 0.87 0.56 1.11 0,73 1.14 0,86 1.43 1.2~ Drug Stoles 0.60 0.77 0.47 0.57 1.02 1.08 1.04) 1.03 0.99 1.03 1.06 1.09 Food Stm-cs 0.~6 0.99 1.21 1,24 0.~6 1,00 0,95 1.00 1.02 L08 1.03 1.10 Packaged Liquor Sto{~s 1.01 0.85 0.78 0.84 0.82 0.71 0.86 0.76 0.97 0.86 0.82 0,74 Ealing and Drinking Places 0.76 0.70 0.77 0.75 0.85 0.91 0.90 0.95 0.88 0.94 0.~0 0.97 Homc Furnishings 0.35 0.33 0.36 0.36 0.46 0.50 0.51 0.49 0.40 0.48 0.38 0.49 Bldg. Matrl. and Farat Implmis 0.77 0.70 0.54 0.57 0.50 0,54 0.49 0.54 0.~6 0.61 0.43 0.49 Auto Dealers and Auto Supplics 0.08 0.07 0.07 0.07 0.07 0.08 0.07 0.09 0.08 0. t I 0.09 0. I 1 Se~ice Stations 0.24 0.22 0.45 0,44 0.43 0,41 0.46 0.43 0,50 0.55 0.51 0.55 Other Retail Stores 0.56 0.52 0,50 0,43 0.60 0.61 0.65 0.70 0.82 0.92 0.83 0.91 Subtotal Re~ll Stem 0.46 0.40 0.50 0.47 0.56 0.S5 0.62 0.61 0.67 0.69 0.71 0.7'~ All Oier Outlets 1,08 0.77 0.87 0.74 0.79 0.70 0.75 0.79 0.68 0.77 0.76 0~86 TOTALS ALL OUTLETS 0.61 0.50 0.60 0.~ 0.62 0.S9 0.66 0.67 0.67 0.72 0,72 0.79 C. COMMERCIAL LAND INVENTORy The inventory of commercial land and development in Rancho Cucamonga is presented on Table 16. This inventory was prepared by considering a) current uses on commercially zoned lend and b) existing commercial development on industrially and residentially zoned land. On commercially zoned land, the table identifies the existing commercial uses, undeveloped corranercially zoned land, and commercially zoned land which is presen~y developed with either industrial or residential uses (and is considered unavailable for commercial development). The table also inventories commercial development which is located on residentially and indnstxially zoned land. The table provides a sunurtary of commercial land uses by type, amount and location. Several sources of information were used to prepare the commercial land inventory including City ~aff, field recommissance, and previous studies. However, this inventory is not a parcel specific analysis. All measures of land are approximate and are expressed in gross acres. A description of the subareas and the types of commercial land use are discussed below. i. Commercial Subarea Definitions The City of Rancho Cucamonga was divided into eight planning districts or "subareas" using the GIS data and maps provided by City staff. The boundaries of these eight subareas were derived based upon the levels of concentration of either zoned commercial acreage, developed commercial acreage or a combination of both. These subareas are generally described below and depicted on Map 2. Subarea 1 - The area on both sides of Foothill Boulevard from the westerly City limits extending easterly to the Deer Creek County Flood Control Channel west of Haven Avenue. This subarea represents the oldest commercial district in the City and is predominantly built out with relatively few undeveloped commercial sites. Subarea 2 - The area on both sides of Foothill Boulevard from the Deer Creek County Flood Control Channel extending easterly to the utility comdor transecting the City in a north/south diroction. This area is comprised predominantly of the Terra Vista Planned Community north of Foothill Boulevard and planned industrial and business park acreage south of Foothill Boulevard. Subarea 3 - The area bounded on the east by the utility comdor, west by the City limits, north by Baseline Road, and south by Arrow Route. This subarea contains the acreage allocated to the proposed Victoria Gardens Regional Mall and the recently developed Foothill Marketplace. Map 2: Rancho Cucamonga Subareas Subarea 4 - Th~ area bounded by the City limits on the west, Hermosa Avenue on the east, 4th Street on the south and including both sides of Arrow Route on the north. This subarea contains the industrial acreage adjacent to 4th SWeet and Archibald Avenue curren~y proposed for residential zoning. Subarea S - The area bounded by 4th Street on the south, Arrow Route on the north, Hermosa Avenue on the west and Cleveland Avenue on the east. This subarea contains the land on both sides of Haven Avenue anticipated to be developed as a commercial office corridor. Subarea 6 - The area bounded by Cleveland Avenue on the west, Milliken Avenue on the east, 4th Street on the south and Arrow Route on the north. This subarea is predominantly comprised of the General Dynamics Specific Plan area proposed for development of a golf course, commercial retail, and business park uses. Subarea 7 - The area bounded by the City limits on the west and north, the commcreial disUict adjacent to Foothill Boulevard (Subarea 1 ) on the south, and the utility corridor on the east. This subarea contains older commercial retail and office development predominantly serving the residential d~velopment in the western part of the City. Subarea 8 - The area bounded by the utility corridor on the west, the City limits on the east and north, and Baseline Road on the south. This subarea contains the agricultural land curren~y being considered as a potential auto mall site. ii. Commercial Land Use Categories and Classification Commercial sites of five acres in size and above were invcntoried within each of the eight subarces. Sites eval,nt~ included large individual parcels as well as commercial areas which create a minimum size of five acres or more. The large undeveloped commercial sites were evaluated for their lx~antial. Undeveloped commercial sites were evaluated with regard to the types of commercial uses they may potentially attract by virtue of the site's size, location, and surrounding land uses. The developed commercial sites were categorizcd according to the following commercial use classifications: Neighborhood Retail - Developed or approved retail commercial centers from 5 acres to 15 acres in size which predominan~y serve the needs of surrounding residential areas and arc anchored by a supermarket or a combination of supermarket/drug store or another neighborhood serving retail use. Community Retail - Developed or approved retail commercial centers from 15-40 acres in size which save the needs of the city-wide market area with retail uses such as off-price stores, home improvemant stores, theaters, and restaurants. Representative community commercial retail centers include Tetra Vista Center end the Foothill Marketplace Center. Regional Retail - Developed or approved retail commercial centers 40 acres end up in size which serve the needs of a regional market area end include major department stores end nationally end/or internationally recognized specialty retail stores. Representative regional commercial centers include the proposed Victoria Gardens Mall. CommercialX Recreational - Developed or epproved public recreational areas which charge admission such as the Epicenter Stadium end the planned golf course within the General Dynamics Specific Plan area. Office - Developed or approved pmfessinnal and medical office uses such as the office complex located in Tcrra Vista and the scattered professional office sites located throughout the City. Medical offices een include in-patient end out-patient centers, clinics end doctors offices. Lodging - Developed or approved hotels end motels. Other Commercial - Developed or epproved commercial lend uses which do not fit into eny of the preceding commercial land use categories. iii. Inventory Findings Part A of Table 16 indicates that there is a total of 1,477 acres of commercially zoned lend in Rancho Cucamonga, of which 414 acres are presently developed with canmcrcial uses, 61 acres are developed with industrial or residential uses, end 1,002 ac~s are undevelopec[ The bulk of this commercially developed lend is in the Foothill Boulevard corndot (Subareas 1, 2 end 3), accounting for 307 acres of the 414 developed acres. About 1,002 acres of commercially zoned lend are currently undeveloped. This represents about 67.8% of all commercially zoned lend in the city. Part B of Table 16 indicates that 170 acres of commercial usas are developed on industrially zoned lend, mos~y in Subarea 5. Similarly, lg4 acres of commercial uses are developed on residentially zoned lend, most of which is ap.e~ounted for by the 135 acre golf course in Subarea 7. The mount of lend developed with commercial uses in Rancho Cucamonga is 768 acres. This includes the 414 acres of development on commercially zoned lend, 170 acres of commercial development on industrially zoned lend end 184 acres of commercial development on residentially zoned lend. Table 16: Rancho Cucamonga Commercial Land Use Inventory Subarea I 2 3 4 5 6 7 8 Total Devclel~d Residential lg .... lg Developed commercial uses within Rancho Cucamonga are predominantly neighborhood and community level retail uses. These two retail uses account for 348 acres of development within the city. Office uses are also well represented with a total of 170 acres. Commercial recreational uses, such as the golf course and the Epicenter, account for a total of 193 acres of development. There are no regional retail retail malls identified within the city. In addition to the 1,002 acres of undeveloped commercially zoned land there is consideration to add another 712 acres of undeveloped land in non-commercially zoned areas for commercial uses. If rezoned, these properties could make available up to 1,714 acres of land available for commercial development. These commercial land inventory results reveal that: · The city is developed with mainly neighborhood level retail development, community level retail development and offices uses. · Rancho Cucamonga has a large amount of undeveloped commercially zoned land (1,002 acres) and the potential to increase the inventory of available commercial land up to a total of 1,714 acres. D. FISCAL pERFORMANCE OF COMMERCIAL LAND USES A central anneera of this study is to assess the impacts of future commercial development upon the City of Rancho Cucamonga budget. This would include consideration of the four major components of the city budget, namely the General Fund, Spceial Funds, Redevelopmerit Agency CRDA), and the Fire DisUict. The most important component is the General Fund because it is the largest piece of the budget and because it contains discretionray revenues and expenditures. The special funds are limited as to their revenues and expenditures to specific functions. Both the RDA and the Fire District have their own sources of revenues and expenditures and are also limited as to the types of services provided. Though there is frequent transferring of monies between the General Fund and these other budget components, the General Fund ramaim the single most important component of the city's budgeting process. This study will focus upon the impacts of commercial development on the city's General Fund, assessing sources of annual revenues and service costs related to commercial uses in the city. Direct capital costs associated with commercial devdopment axe assumed to be self-halancing in nature, requiring mitigation of capital impacts by the landowner prior to project approval. For the purposes of this study it will be necessary to determine the net fiscal impact associated with the firage development of several types of commercial uses. A per acre fiscal impact factor was estimated for each commercial land use for this purpose. Table 17 presents the fiscal impact assumptions used for each type of commemial development. These assumptions were based upon the analysis of the city budget for the 1994-1995 fiscal year, the commemial land use inventory, and related studies discussing fiscal impacts in Rancho Cucamonga. All of these assumptions regarding future commercial development within Rancho Cucamonga are necessary to estimate the fiscal impacts of commercial development in the city. Table 18 presents the assumptions used in this study to estimate General Fund revenues and service costs. These assumptions were based upon an analysis of the city budget and the allocation of revenues and service costs to commercial uses. Since property tax revenues differ comiderably between properties located in the RDA project area or outside of the project area, this analysis estimated separate fiscal impacts for each. Table 19 presents the net fiscal impacts of commercial development by colranercial land use for properties located outside of the RDA project area. Table 20 presents the same commercial land use net fiscal impacts for properties located within the RDA project area. The two do not differ at all with the exception of the property tax amounts and the net fiscal impact. The results indicate that all commercial uses are net positive generators of revenues to ~ city's General Fund with revenue to cost ratios exceeding 1.00. Office uses located outside of the RDA project area show the only negative fiscal impact at 0.99. Commercial land uses are estimated to generate about 28.8% of all General Fund revenues in the 1994-1995 fiscal year. About 26.5% of the city's General Fund revenues come from retail sales taxes generated mostly by commercial uses. In addition to retail sales tax revenues, comraemal land uses also generate revenues from property taxes, utility users fees, ~'anchise fees and business licenses fees. Commercial uses account for only 9.3% of the General Fund service costs. Commercial uses have a positive overall revenue to cost ratio of between 2.16 and 2.79, depending upon the location of the site. This contribution is a very positive indicator of the central role that commercial land uses play in providing revenues to pay for local municipal services. The fiscal impact analysis for commercial land uses reveal that: · All of the commercial land uses analyzed indicated a positive fiscal impact except office development outside of the RDA project area. · Retail and lodging commercial uses generate the greatest positive fiscal impacts due to the retail sales tax end transient occupency tax revenues respectively. · Overall, current commercial uses generate between $2.16 and $2.79 in revenues for every $1.00 in municipal service costs. · Commercial development in the RDA project area have better fiscal hnpacts then commercial development outside of the RDA project area. Table 17: Per Acre Assumptions for New Commercial Development by Land Use Retail Retail Rmll Office Rec~ation Lodgings ~ Employment 66.4 66.4 66.4 37.6 11.9 9.8 45.7 Taxable Retail Sales $1,411,344 $1,698,840 $1,881,792 $201,2.54 $176,527 $72,419 $1,633,500 ~Vnluation $1,555,092 $1,803,384 $2,038,608 $1,685,772 $1,001,880 $1,121,670 $1~372,140 Room Reciepts S328,500 Source: AGAJANIAN & Alsociats~ Table 18: Annual Revenue and Service Cost Assumptions Municipal Revenues Municipal Service Costs Prop~y Tax 2.83%of 1% of AV ~nml Oov~mment $43.88~Employ~ Re~l Sal~s Tax l%ofR~l Sales Fir~ Protection $43~22~Employ~ Utility Use~ Fo~ $35.96~Employoe Poli~ Protection $59.38XEmploye~ Transient Oct. Tax 10%of Room Receipts Community Dcv. $17.83XEmploye~ Fmnchig Tax(O&E) $7.74XEmployee Enging~ing $19.02XEmploy~ Franchise Tax (Refuse) $17.44~Employee Public Works $21.29~Employee Bus. License Tax $21.46~Employe~ Business License $3.19~Employee V¢h. Fines~Pkg, Cit $1.22~Employ~ RDA T~xlnct~ment 39%of1% of AV Sourte: AGAJANIAN & Associates Table 19: Net Fiscal Impact to the City General Fund of Development Outside RDA Project Area Neighb~'hood Ce~anunity Re~<~d Canmenial O~het To~ Retail Relail Retail Office Recreation Lod~ Cetmne~al Commercial REVENUE~ Pr~ Tax $440 $3 11 $377 $477 $284 $318 $3 g9 $2,996 Relail Sales Tax $14,113 $16,998 $1g.glg $2,013 $1,765 $724 $16,335 $70,757 Utility Users Fee $2,397 $2,387 $2,387 $1,353 $427 $352 $1,645 $10,939 Transient Oct. Tax $0 $0 $0 $0 $0 $32,g50 $0 $32,850 Franchise Tax(G&E) $3 14 $514 $3 14 $291 $92 $76 $354 $2,355 FranchiseTax(Refuse) $3,15g $1,158 $1,15g $656 $207 $171 $798 $5,305 Bus. Liceme Tax $1,425 $1,425 $1,425 $808 $255 $210 $'982 $6,52g Veh. Fines',Pkg, Cit $81 $81 $81 $46 $14 $12 $56 $371 To~d RevenuesXAcre $20,118 $23,064 $24,960 $5,645 $3,044 $34,713 $20,557 $132,101 SERVICE COSTS Oen~ral C~ $2,913 $2,913 $2,913 $1,156 $521 $430 $2,007 $12,853 Fir~Ptot~tio~ $2,869 $2,869 $2,869 $1,139 $513 $424 $1,977 $12,660 Pulic~ Ptot~cticm $2,942 $2,942 $3,942 $1,117 $705 $592 $3,716 $16,946 C~mnun~ Dev. $1,194 $3,1~4 $1,184 $671 $212 $175 $816 $5,424 Engln~'ing $1,263 $1,263 $1,263 $716 $226 $1~6 $870 $5,786 Public Xx./oda $1,413 $1,413 $1,413 S801 $253 $209 $'974 $6,476 Buslugs Liters= $212 $212 $312 $120 $28 $91 $146 $970 Told 8~g~ic~ C.~ls~t~ $13,796 $13,796 $13,796 $5,720 $7,467 $2,037 $9,505 $61,115 N~ outsld~ of RDA $6,323 $9,265 $11,164 ($76} $577 $22,6T'/ $11,053 $70,985 R~-venue~C.~t Ra~io 1.46 ! .67 1.81 0.99 1.23 17.04 2. 16 2.16 ,~ou~: AGAJANIAN & Asmo~at~ Table 20: Net Fiscal Impact to the City General Fund of Development Inside RDA Project Area Reulil Relnil R~il O~ic~ Reer~lion Lod.m.',~ Comm~rclal Total REVENUF3 RDATax lnc-rem~ $6,065 $7.033 $7,951 $6,575 $3.907 $4,375 $5,351 $41,256 Retail Sales Tax $14,113 $16,988 $1g.8 lg $2.013 $1,765 $724 $36,335 $70.757 Utility Uses Fe~ $2,387 $2,387 $2,387 $1,353 $427 $352 $1,645 $10,939 Transient O~. Tax $9 $6 $0 $0 $0 $32,850 $0 :$32,850 Franchis~ Tax(G&E) $514 $514 $314 $291 $'92 $76 :$354 $2,355 Franchise Tax (Refu~) $3,158 $1,158 $1,158 $656 $207 $171 $798 $5,305 Bus. Licer-~eTax $1,425 $1.425 $1,425 $808 $255 $210 $982 $6,528 VeIL Finesq~kg, Cit $81 $81 $81 $46 $14 $12 $56 :$371 Total Revenue,~,cre $25,743 $29.586 :$32,333 $11.742 $6,668 $38,770 $35,520 $170,361 SERVICE COSTS C, eneral Go~ $2,913 $2,913 $2,913 $1,156 $521 $430 :$3,007 $12,853 FireProl~fion $2,869 $2,869 $3,869 $1,139 $513 $424 $1,977 $12,660 Police Prelecfion :$3,942 :$3,942 :$3.942 $1.117 $705 $582 $2.716 $16.946 CommtmilyDev. $1.184 $1,184 $1.184 $671 $212 $375 $816 $5,424 ~ $1,263 $1,263 $1,263 $716 $226 $186 $870 PublicWeda $1,413 $1,413 $1,413 $801 $253 $20~ $974 $6,476 Busin~ Lic~me $212 $212 $212 $120 :$38 :$31 $146 $970 To~d S~vlce Co~XAt:te $13.796 $13,796 $13,796 $5,720 $2,467 $2.037 $9,.'~05 $61.1 NelinRDAPtojectA~a $11,947 $15.790 $18,337 $6,021 $4,201 $36,733 $16.015 $3O9,246 Rev~ue'~ Ratio 1.87 2. 14 2.34 2.05 2.70 19.04 2.68 2.79 Source: AGAJANIAN & III. MARKET DEMAND CHARACTERISTICS The potential for commercial development in Rancho Cucamonga will be largely defined by the eanount and type ofcommcreial demand available in the subregional area through buildout. The relative share of commercial capture by the city will be determined by the size of the subregional demand, the city's competitive commercial sites, and city land uses policy. This Section estimates the amount of subregional commercial demand at buildout from which Rancho Cucamonga can capture its share of future commercial development. The analytic approach used in this study is to estimate the total amount of commercial land that can be supported by the subregion when all population growth targets have been reached. This approach places a cap on the total amount of commercial development that can be supported, as opposed to focusing upon a single site or city. In this way, overestimating the potential for commercial development is reduced and a more realistic estimate of commercial demand is prepared. This approach can help avoid the optimistic demand projections common in many localized commercial demand estimates. The primary source of commercial land use support is in the purchasing power of residents in households. Their expenditures account for the dominant support of all neighborhood, community and regional level retail uses, commercial recreational uses, and other commercial uses. Retail spending by households accounts for over $652 million in the city's $1,693 million economy, as indicated on Table 12. Businesses are the principal source of support for office uses while visitors are the principal source of support for lodgings. Table 21 identifies dwelling unit (du) capacity for the subregion based on a review of general plans from cities in the subregion and SANBAG projoctious. This table indicates that about 51,887 new du's are expected to be built in the subregion through buildout. Rancho Cucamonga is expected to accommodate about 17,632 of the du's, 34.0% of total subregional du growth. The bulk of the projected du growth is expected to occur in Fontana with 32,381 new du's by buildout, or about 62.4% of total subregional du growth. This du growth will be developed mos~y in northern Rancho Cucamonga and northern Fontana. Thus, the future of residential growth will be along the foothills in Rancho Cucamonga and Fontana. Table 21: Subregional Dwelling Unit Comparisonz Paneno Cucamon~ Fontaria Ontario Upland Subrelfion Existing DU- 19952 39,368 32,619 44,133 24,884 141,004 Projecl~xl Build Out 57,000~ 65,000~ 43,654s 25,758~ 186,412 Net Change 17,632 32,381 (479) 874' 45,887 Table22: SubregionalPopulationComparison Rancho Cu~-nonga Fera,~na Onlatio Upland Sub~ion Existing 1995 117,903 105,240 145,743 67,875 436,761 Net Chan~ DUs 17,632 32,381 0 874 50,$87 Popuhtlofl/DU 3.0 3.5 3.4 2.8 33 Proje~tedCnov~ 52,896 113,333 0 2,447 168,676 Pvoj~t~l Buildout 170,999 218,573 145,743 70,322 605,437 The subregional du growth is converted to population growth projections in Table 22. The table indicates that Rancho Cucamc~ga should capture about 52,896 new residents by buildout, or 33.4% of the total subregional population growth of 168,676 persons. Fontana is expected to add 113,333 new residents, or 73.2% of the total subregional population growfit As depic~d on Figure 6, the subregion now accommodates 72.1% of the buildout population, leaving only 27.9% to support all future commercial subregional development. The subregion had a 1993 taxable retail expenditure of $7,707.52 per person. At this rate the future population growfit can be expected to add about $1,300,074,000 in taxable retail sales. Of this mount, $885,175,000, or $5,247.78 per peTson, would help support new retail store development. The remainder, $414,899,000 at $2,459.74 per person, would help suppo~ non-store outlets such as some personal service offices, recreational facilities, lodgings and other non-store outlets. On Table 23, this demand of $1,300,074,000 is allocated to the specific commercial land uses in order to estimate th~ emount of developed land that could be supported by these new subregional expenditures. The estimates for the neighborhood retail, corninanity retail, regional retail, and some of the "other" retail are based solely upon expenditures for retail goods and services. The office demand estimates are less clear because it is heavily dependent upon anticipated Service and FIRE sector employment growth and because the use may be developed in industrial districts. The commercial recreational demand estimate is also somewhat variable because this type of land use varies widely in project characteristic from a cinema to a golf course. Lodging demand is based upon a proportional growth of visitor nights generated by businesses, tourists and travelers. This may underestimate the subregional demand for lodging properties. Figure 6: Share of Buildout Population Fm~eC~owtk __ iaOmafiol:l.~t,~a 2.4% Based upon the analysis, there is an estimated subregional demand for 1,670 acres of c~mun~ial development As depicted in Figure 7, this land use demand lxanslates into 453 acres of retail uses, 934 acres of office uses, 118 acres of commercial recreational uses, 57 oa'es of lodging and 108 ac~s of other commercial uses within the subregion by buildout. Table 23: Estimated Subrcg~onal Demand for Commercial Land Uses* Retail Sales Category Retail Reatil Retail Office* Rcaeation* Lod~ Other* To~al Apparel Stores $0 $10,144.944 $20,289,888 $0 $0 $0 $3,381,648 $33,816,480 General Merchandise Stores $0 $81,060,978 $162,121,956 $0 $0 $0 $27,020,326 $270.203,260 Drag Stores $18,515,866 $4,937,564 $0 $0 $0 $0 $1,234,391 $24,687,821 Food Stores $92,704,126 $18,540,825 $0 $0 $0 $0 $12,360,550 $123.605,501 Packaged Liquor Stores $3,623,871 $1,811,936 $0 $0 f~ $0 $1,811,936 $7,247.743 Eating and Drinking Places $19,885,480 $53,027,948 $26,513,974 $0 $0 $0 $33,142.467 $132.569,870 Home Furnishings $1,065,783 $6,927,587 $1,065,783 $0 $0 $0 $1,598,674 $10,657,826 Bldg. Malxl. and Farm Implmts $11,931,078 $23,862,155 $0 $0 $0 $0 $11,931,078 $47,724,311 Auto Dealers and Supplies $0 $4,996,540 $14,989,621 $0 $0 $0 $4,996,540 $24,982,701 Service Stations $58,062,507 $7,741,668 $0 $0 $0 $0 $11,612,501 $77,416,676 Other Retail Stores $13,226~235 $66,131,176 $26,452~470 $6 $0 $0 $26,452~470 $132,262,351 SubtotalRetailStores $219,014,945 $279,183,320 $251,433,692 $0 $0 $0 $135,542,582 $885,174,539 All Other Outlets $62,234,866 $20,744~955 $4,148,991 $41,489~911 $128,618~723 TotalAllOutlets $219,014,945 $279,183,320 $251,433,692 $62,234,866 $20,744,955 $4,148,991 $177,032,492 $1,013,793,262 Supportable Acres 155 164 134 934 118 57 108 1,670 * Based upon taxable retail sales. Source: AGAJA~IA~ & .,moda~ Figure 7: Subregional Commercial Land Demand to Buildout ~ Neighborhood 155 Acres Total Demand 1,670 Acres 134Ac~s Commc. re/al 118 Acres Other Commercial 108 Acres Lod_~n~ The share of this future demand for commercial uses which locates in Rancho Cucamonga will be based on a number of factors including the availability of sites, the location of growth, accessibility to the trade area, synergy with adjacent uses and competitive sites in adjacent cities. These factors ensure that Rancho Cueamonga will capture all locally supported neighborhood rotnil demand as well as some community retail demand. However, the bulk of the commercial growth in Rancho Cucamonga will have to be competitively attracted to the city. This demand analysis for subregional commercial land development reveals that: · The subregion now accommodates 72.1% of the buildout population, leaving only 27.9% to support all future commercial subregional development. · There is an estimated subregional demand for 1,670 acres of commercial development. This lrsnslates into 453 acres of retail uses, 934 acres of office uses, 118 acres of commercial recreational uses, 57 acres of lodgings and 108 acres of other commercial uses within the subregion by buildout. · The bulk of the commercial growth in Raneho Cucamonga will have to be competitively attracted to the city. IV. AVAILABLE COMMERCIAL ACREAGE Competitive factors will determine where new commercial dcmend will locate in the subregional area. Depending upon the specific use, factors of site size, cost, visibility, accessibility and safc~y will fore commercial develol~rs to the most competitive sites. This Section ~xamines the commercial lend supply to assess the potential for commercial sites in Rancho Cucamonga. A. SUBREGIONAL COMMERCIAL LAND SUPPLY Th~ results of the subregional commercial land inventcry are presented on Table 24 end Figure 8. The table indicates that there is approximately 5,742 acres of commercially zoned land in subregion, with about 40% of the acreage located in the City of Ontario. By compatisce, Rancho Cucamonga has set asiclc 1,477 acres, about 26% of the total subregional supply. Similarly, Fontana has about 22% end Uplend about 12% of the total subregional supply of commercial lend. The subregional supply of developed commercial lend is about 2,630 acres. Rancho Cucamonga has about 475 clcvclopcd commercially zoned acres, 414 with commercial uses and 61 acres ofnon-~ommercial uses (see Table 16). There are en estimated 354 acres of commercial uses on non-commercially zoned properties in the city. All told, Rancho Cucamonga has 768 acres of existing commercial uses. Rancho Cucamonga has a developed acres/1,000 population ratio of 6.5, compared to th~ subregional ratio of 6.7. Uplend has the highest ratio with 8.2 acres of commercial land per 1,000 population while Ontario end Fontana have ratios of 6.9 and 5,7 respectively. By subtracting the doveloped commercial lend from the total lend set aside for commercial uses it cen be determined that about 3,112 acres of undeveloped Map 3: Generalized Location of Designated and Potential Commercial Areas I r X w~, I ._ I I \ t commercially zoned land is now available in the subregion. Raneho Cueamonga has 1,002 acres of available commercial land, or about 32% of the available subregional supply. Ontario still has considerable supply of available commercial land with 1,278 acres, or 41% of the total subregional supply. Fontaria has 21% of the total supply while Upland has the least at 5%. Table 24: Subregional Commercial Land Use Comparisont P, ancho Figure 8: Subregional Commercial Land Supply by City To~ml C, onuuc~al Land ia Subncgion 5,742 This inventory of commercial land supply in the subregion reveals that: · There is a commercial land supply of 5,742 acres in the subregion with 3, 112 acres undeveloped. · Raneho Cueamonga has a total of 1,477 acres of commercially zoned land, about 26% of the subregional total. · Raneho Cueamonga has 1,002 acres of undeveloped commercial land, or about 32% of the total subregional supply of undeveloped commercial land. B. RANCHO CUCAMONGA COMMERCIAL SITES Table 25 identifies the undeveloped and available commercial acres in Rancho Cucamonga. These undeveloped and available commercial sites are schematically located on Map 3. Part A of Table 25 identifies the undeveloped acres in the city by subarea and type of permitted commercial uses. There is a total of 1,002 acres available for commercial development. Neighborhood retail commercial uses have 146 acres available for development in subareas 1,4,5 and 7. The remainder of undeveloped commercial land, 856 acres, is available for regional retail, community retail and office uses. This indicates that the city has a high del~ce of flexibility for accommodating such uses at these commercial sites. Table 25: Potential Sites Available A. Vacant Commercial Zoned Land 5 Ac~s + K Vacant Non-Commerdal Zoned La~d 5 Acre+ Subarea hereage Location ~cW~aZe ~ - NC 32 Hmve~ Corridor 139 Part B of Table 25 identifies all of the potential acreage that can be converted to commercial uses by virtue of their location, fezone applications, and planning consideration. These potential commercial sites mount to 712 acres. The largest potential area for new commercial land, at 438 acres, is on the south side of Funthill Boulevard. The Haven Avenue corridor is likewise a large potential area, at 139 acres, targeted for office uses. This review of commercial acreage in Rancho Cucamonga reveals that: · Rancho Cucamongahas 1,002 aares ofcurrenfly undeveloped commercial land. · There is consideration for creating an additional 712 acres of commercial land. · Rancho Cucamonga appears to have an abundant current supply and potential supply of undeveloped commercial land, totaling about 1,714 acres. C, PLANNED SUBREGIONAL COMMERCIAL DEVELOPMENT Table 26 lists the large commercial sites with pending action in Rancho Cucamonga. Only the Home Depot project is active at this time. Other commercial projects in the city have recently been completed including the Price Club, Wal Mart, Best Buy and Home Express stores. Table26: Potentiai New Commercial Development in Rancho Cucamonga Prolect~tion Sob Am Size Status 1, CalholicChurch/N. SidcofFoolhill, 3 15Ac~s Pr~limina~discussions EastofI-15 Gcncralplanamcndmc~andzer, c 2. CveneralDynamic~N. Sideof4lh 6 3lgAcres Zone change aHxoved, golfcourse Street, Weg of Milliken under consinaction 3. VictmlaCrardeas/V~estofl-15, N~th 3 B1Acres Alslxove~ no activity of Higtdatut BIrd. 4. Tetra Visla/NW corner Foolhill & 2 50 Acres Apl~'oved General Plan smendment, Roches~r- Home Depot zone change and CUP 5. Masi Projecl/SW coma Foothill & 2 24 ~ Za~ Change at~fov~l Roches~ 6. Smith's Catter/NW corner Foothi & 1 9 ~ Apl~ecl, no activity Vine/ard 7. Mis~ionProj~ctfN. Sid~of4thStt~-t, 6 30Am~ Za~Chaagepas~g E. of Millikea Total 577 ~ Sore-ors: AGAJANIAN & Associates, City of Rancho Cucamo~ga Competitive commercial projects in the subregion are identified below: i. City of Ontario Recently approved major commercial projects end commercial zone change applications pending in the City of Ontario include: a. Ontario Mills Factory Outlet project located on the south side of 4th Street, adjacent to the 1-15 and east of Milliken Avenue. The project will be developed as a 200 acre regional commercial factory outlet facility. Construction grading is underway at this project site. (See Map 4) b. Ontario Center by Lewis Homes is a proposed Specific Plan Amendment being processed by the City of Ontario at this time. The proposed project, if approved, will change the zoning for approximately 100 acres of industrial land to community serving commercial uses such as a theater complex, big box (off price) retail users, restaurants, and commercial recreation. The project site is located adjacent to and northerly of the 1-10 freeway east of Haven Avenue and west of Milliken. (See Map 4) c. Cmasti Specific Plan was recently approved by the City of Ontario and includes approximately 64 acres ofmtall, offiec andhotel uses. Developmentofthe sitehas not yet commenced. d. The Sphere of influence for the City of Ontario was recently mended to include approximately 8,500 acres of agicultural land which the City is proposing to master plan as a new master planned community to included a variety of commercial, industrial, residential and commercial recreation uses. ii. City of Fontana Recently approved major commercial projects and commercial zone change applications pending in the City of Fontana include: a. Siewa Lakes a master planned community located at the northwest comer of Sierra Avenue and Highland Avenue was recently approved which includes approximately 150 acres of community ectmnen:ial and office uses end a 160 acre public golf course. Comtruction on the residential and golf course phases of the project are scheduled to commence in early 1996. b. California Landings located at the southeast comer of lkech Avenue and Highland Avenue was rex:ently approved which includes approximately 30 acres of neighborhood commercial uses. Construction of the initial phases of this project is scheduled to commence in 1995. c. Westgate Planned Community located at the southeast comer of 1-15 and Summit Avanuc is a Specific PI~ proposal cu.u,tly being reviewed by the City. The proposed project includes approximately 337 acres of business park, mixed use and commercial iii. County of San Bernardino a. The County has reecntly approved a major motor speedway on 500 acres in the unincoqn'ated County inca adjacent to the cities of Fontana and Rancho Cucamonga. The project is located at the former Kaiser Steel site and is scheduled to commence comtructiun within the ne~w future. There is a 50 acre business park proposed adjacent to the speedway site. (See Map 4) iv. Upland a. Upland has no major competitive commercial development projects under consideration at this time. The Lakes Specific Plan covers 450 acres with the potential for 86 acres of commercial uses. However, there is no indication that this commercial acreage will be developed in the near future. A review of the planned commercial projects in the subregion reveal that: · Rancho Cucamonga is developing commercial properties along Foothill Boulevard in Tetra Vista and at 1-15. · The Ontario Mills 200 acre project now underway is a major retail competitor likely to capture a large share of the future commercial d~nand within the subregional area. · The Lewis Homes project of 100 acres in Ontario is also a potential competitive probkm ff it develops ahead of competitive uses in Rancho Cucamonga. · The raceway may have some positive spin offs for Rancho Cucamonga, but most of the direct benefits will be captured on site due to ample land availability. D. COMPEnnVE ADVANTAGES~DISADVANTAGES OF CITY SITES There are a number of competitive advantages and disadvantages for Rancho Cucamonga within the subregional trade area. The competitive advantages for commercial development in Rancho Cucamonga are noted as follows. The single greatest advantage for city commercial sites is their proximity to the subregional growth area along the foothills ofRancho Cucamonga and Fontana (See AC~JAmA~ & A~m 47 Map 4). The next phase of rapid residential development will ereate new retail oppommitics for sites near the growth areas. Rancho Cucamonga is well positioned to capture most of the commercial trade generated by these future growth areas. The 1-15 corridor presents the city's commercial sites with another important advantage. There are many available commercial sites located at major 1-15 access points which are able to attract both subregional and regional trade. The key commercial point along the I-15 is the Foothill Boulevard on~off ramp. This location contains a major community retail center, a large site suitable for a regional level commercial use, and access to Foothill Boulevard commercial uses in Rancho Cuc~nongt The 4th Street on\off ramp is also a critical location since it is one of the two access points to the Mills project located in Ontario. The 4th Street on~off ramp will enable Rancho Cucamonga to effectively compete for a share of the commercial trade generated by the Mills project. Similarly, the Baseline, Summit, and future 6th Street on\off ramps all offer some oppommity to capture future commercial development. The future Highway 30 will also add access to the subregion extending Rancho Cucamonga's commercial draw well into northern Fontana. It is this potential draw from northern Fontana that makes this new freeway significant for commercial development since moot of the commercial sites along the proposed route in Rancho Cucamenga are already developed and serving the trade area. Attention should instead be focussed at sites along the Day Creek on~off ramp of Highway 30 as a location to capture commumty level retail trade from northern Fontana. The city has an-tple annrots of undeveloped corcan~cial land in nearly all subare, as (see Table 16). This can be considered advantageous since it enables developers to select the best site, among many available sites, to build a commercial development. This flexibility of location can help the city to accommodate a wide range of desired commercial uses in response to future commercial damand growfix. Ample land can also be considered a disadvantage since an excess supply of ~al land, above that needad to support actual demand, will tend to erode land prices. This excess supply of undeveloped coramercial land would leave a large amount of marginally located commercial sites in the city by buildout. These surplus commercial sites would then attract low rent commercial uses as they seek to develop in the market with httle n~w demand to support commercial development. The city is competitively disadvantaged by a surplus of commercial sites which have the potential to disperse future commercial development to lower cost sites and diminish the potential syn~gy from commercial uses locating near each other. Without some ability to direct majc~ commercial development projects toward specified nodes the city stands the risk of reducing its subregional commercial competitiveness. Rancho Cucamonga also has other competitive disadvantages. One important disadvantage is its small share of current retail sales capture by the city. This small Randin Cmmmon~ Comme~bl Land U~ and Mmla Sludy AGAJANIAN & Aa~t4mt,~ 48 share indicates that Rancho Cueamonga consumers are in the habit of making retail purchases at retail stores outside the city. By comparison, Ontario has amassed a large base of retail stores which have managed to capture a large share of the subregional retail sales. Since retail stores seek to locate next to existing centers where there is an established node of retail trade, it is more difficult to attxact new stores to areas with smaller concentrations of stores. This locational preference is advantagcons to cities with larger existing retail centers and disadvantageous to cities with smaller retail centers, such as Rancho Cucamonga. The city also lacks significant subregional commercial attractors at this time which can make the city a commercial destination. The Epicenter can draw crowds, but there is little else to attract the subregional population to commercial sites in the city except retail stores and centers. Rancho Cucumonga can attract more destination uses to help stimulate commercial growth and reduce its retail sales leakage. The city may also leverage its proximity to the Ontario Mill~ and the speedway as a means to benefit from these large commercial destination uses. Based upon this brief review of Rancho Cucamonga's competitive advantages and disadvantages it can be concluded that: · The single greatest advantage for city commercial sites is their proximity to the subregional growth area along the foothills of Rancho Cucumonga and Fontana. · The 1-15 con'idor presents the city with major access points to attract both subregional and regional trade. The key commercial point along the 1-15 is the Foothill Boulevard on\off rump. · The dty has ample amonms of undeveloped commercial land in nearly all subareas. · Although Rancho Cucumonga has successfully increased its share of subregional retail sales since 1980, the city is still competitivcly disadvantaged with its low relative shere of subregional retail sales capture. This disadvantage will tend to make corranercial sites in the city less attractive for new subregional uses because it is difficult to stop the nahn~l telldelley [of new retail nses to locate where there are large existing retail centers with established consumer habits and patterns. This disadvantage will become less influential as the city matures and expands its own diverse and unique commercial land use base. · The city lacks enough significant commercial attracton to make the city a strong commercial destination at this time. The city can expect that all new commercial development will be hard won and will require that every competitive advantage be well used including the attraction of new cotrav~'cial uses, competitive uses, complementaxy uses, and the use of synergy among the commercial uses to attract development to the city. Map 4: Competitive Opportunities and Constraints e Sou~x~: AOA3ANIAN&Associa~ V. COMMERCIAL DEVELOPMENT SCENARIOS With an understanding of the fiscal impacts of commercial development, the subregional demand for commercial land uses through buildout, and the competitivehess ofRancho Cueamonga ctnnmercial sites, it is now possible to structure testable future commercial development scenarios for the city. This Section will describe the measures and targets used to evaluate the scenarios and the specific strategic commercial development issues that need to be addressed by the scenarios. A. SCENARIO PERFORMANCE MEASURES AND TARGETS This study is concerned about addressing the central issue of"how much commercial land is enough? More specifically, this issue can be stated as three testable questions: How much commercial development is needed to maintain the city's fiscal health.'? How much commercial development might be reasonably attracted to the city? Is there enough lend to accommodate the desired mount of commercial development? Three specific analytic measures have been formulated to help address these questions in a consistent and comparable manner. These measures are fiscal performance, market competitiveness and site availability. Each measure is described and a target value or range is defmed to help interpret, compare and evaluate each scenario analyzed. The measures and scenario targets are described on Table 27. i. Fiscal Performance The fiscal performance of potential commercial scenarios is a basic concern of this study. It is critical to have a single measure which can capture the essence of the net fiscal impact. The measure selected is the percentage of commercial revenues added to RanehoCueamm~gaC~mmenhdLandU~mndl%hrkaStudy AG.,,aAm_AN & ,h~d,t~ 5 1 the General Fund above the current 28.8% share, as discussed in Section 2.D. If this 28.8% of revenues is expanded to General Fund revenues at buildout, commercial uses would have to conWibute about $12,778,900 annually, well above their current estimated amount of $ 8, 162,400. The fiscal impact measure will therefore express the percentage increase of commercially generated revenues to the General Fund in excess of, or short of, the current share of 28.8%. ii. Market Compctitiveness The degree of market compaiflvcness is somewhat arbitxary when dealing with general areas insteed of specific sites. However, it is possible to express the amount of subregional ceptu~ implied by the scenario and whether this share of capture appears reasonable or unreasonable. Lower capture rates arc less competitive because there is local commercial demand to support some local commercial development. For ~ample, commercial development which can capture any share of the city's ~t retail sales leakage can be supperted. Simih~ly, neighborhood retail centers can be supported with local population growth. Subregional competition increases for community and regional level retail uses, c, ommercial recreational uses, and office uses. Capturing large shares of the subregional commercial demand of these uses would be more competitive than neighborhood level retail since these uses may locat~ anywhere in the subregion. Attempting to capture the entire available subregional demand for commercial development is not realistic since it would take an aggressive effort for any single city to capture all of the available subregional demand. The percent of total market capture will re~t the amount ofcompetitiveness needed to atWact these commercial uses. Capture rates differ by land use, but capture rates in excess of 50% may be considered generally infeasible and unreasonable while capture rates of 25% may be cousidered generally feasible and reasonable. iii. Site Availability The basic criteria to measure land availability is the number of acres available for corcanercial dcveloprnent. As dcmoustrated in Section H.C, there is more undeveloped land than can be supported. Couscquenfly, the impact measure will express the percentage of undeveloped commercial used in the scenario. The analysis will use the 1,002 acre figure for undeveloped commercially zoned land from Table 16 as an inventory total. The higher the percentage of commercial land used the better. The lower the percentage share of commercial land used, the greater the surplus of undeveloped commercial land. B. COMMERCIAL DEVELOPMENT SCENARIOS "Scenario" is defined as a description of a possible future for analytic purposes. In this study the future to be described is the buildout of commercial land in Rancho Cucamonga. That is, the amount and type of commcrcial development expected to occur in the city by thc time that the city reaches its pined residential, and population, capacity. Each scenario has a specific feature that it highlights for testing corresponding to the issues which require examination and evaluation. There ar~ a number of issues that need to be addressed in this commercial land use and market study. Each is described below. i. Capturing R~tail Sales Leakage This scenario is concerned about the mount of retail sales leakage currently being experience by the city. By capturing all of the city's $220,830,000 of retail sales leakage, it is estimated that about 132 acres of commercial land can be supported. What would the scenario performance be if Rancho Cucamonga captured all of this leakage? ii. Capturing Minimum Market Demand A portion of future demand to support commercial land development in Rancho Cucamonga will come from population growth in the city. This demand will be largely neighborhood level and some community level retail stores since these uses are supported by the neighborhoods in which they are located. For Rancho Cucamonga, this ~ about 140 acres of development. What would the scenario performance be ffRancho Cuc, mnonga captured all of t~ locally supported future commercial demand? iii. Capturing Maximum Market Demand What would the scenario performance be if Rancho Cucamonga captured all 1,670 acres of future subregional commercial demand? This scenario assumes that Rancho Cucamonga would capture every acre of future commercial subregional demand in order to detennine the upper bounds for fiscal impacts and sit~ availability. It is not realistic to assume that all 1,670 acres of demand can be captured within the city, but it is important to know what would occur if the city did absorb all of the available commercial demand. iv. Capturing Population Growth Demand A large portion of future commercial demand will come fi'om new household expenditures in the city. In addition W locally supported commercial uses (minimum market demand), Rancho Cucamonga can capture its entire 31.4% share of future demand based on subregional population growth, about 524 acres. What would the ,~G,~a~,~ & ,~t= 53 scenario performance be if Rancho Cucamonga captured its share of all future c, onunemial demand based upon its share of subregional population growth to buildout? v. Capturing Site Availability Share of Demand ff Rancho Cucamonga captured its share of available subregional undeveloped commercial acreage, about 32.2%, an additional 538 acres of commercial development would occur in the city by buildout. What would the scenario performance be if Rancho Cucamonga captured its share of all future commercial demand based upon its share of subregional commercial land availability.'? vi. Fiscal Break Even This scenario is concerned about finding the amount of commercial development the city would need to attract in order to maintain the current share of commercially generated Cgneral Fund revmues, abou~ 28.8% of all General Fund revenues. Analysis indicates that the city would need about 162 acres of commercial development to maintain this 28.8% share of ~venues at buildout. What would the scenario performance be if Rancho Cucemonga captured enough commercial development to maintain the current share of commercially generated General Fund revenues.9 vii. Capturing Share of Buildout Population This scenario captures enough fi'om future commercial demand to bring the share of commercial development in Rancho Cucemonga even with its share of subregional population, about 28.2%. Analysis indicates that 471 acres of commercial development would enable Rancho Cucamonga to reach this goal. What would the scenario performance be if Rancho Cucamonga captured its share of all future commercial demand based upon its share of subregional population at buildout.'? AOAJ.e~ & .~t,, 54 Table 27: Scenario Measures and Targets Fiscal Impact Measure Market Capture Measure Site Availability Measure Current 28.8% share of C.,-encral The share of the 1,670 acres of The share of the 1,002 acres of Fund revenues generated by commercial subregional demand curren~y undeveloped commercial commercial land uses in the city. captured by the city. land in the city devcloped by buildout, Fiscal Impact Target Market Capture Targets Site Availability Targets Maintain (break even) or improve Capture the existing telall sales Capture 32.2% of the subregional upon the current share of leakage, about 132 acres. demand based on the city's share of commercially generated GF undeveloped commercial had, revenues. about S38 acres. Capture the pofiien of Capture 28.2% of the sub~glonal enmmetcial demand supported by demand based on the city's share of local population growth, about buildout population, about 471 140 acres. scres. Capture all 1,670 acres of the subregional commercial demand. Captu~ 31.4% of the subr~-gloml demand based on the eity's shara of the subregional population growth, about 524 acres. ,~.muvee: AC, AJANIAN & Ammoelntem At~,UANLAN a Ametam 5 5 Table 28: Scenario Performance - Capturing Retail Sales Leakage Nei~ C~mmunily Regional C~,~,~"ial O0m' Total Retail Retail Relail Offic~~ Lod~n~s C~mn~ CormtarSal New Comm. Development 27 34 41 0 O 0 30 132 A. Land Availability Measures Available Land (Ac.) 146 762 422 762 298 762 762 1,002 .Potential Land (Ac.) 146 1,255 487 1,339 736 1,339 1,339 1;14 % of Avail. Land Used 18% 4% 10% 0% 0% 0% 4% 13% B.' Market Risk Measures Potential from Leakage (Ac.) 27 34 41 0 0 0 30 132 Minimum Market Capture (At.) 49 52 0 0 0 5 34 140 Total Subregional Demand (Ac3 155 164 134 934 118 57 108 1,670 % of Total Market Capture 0% 0% 0% 0% 0% 0% -0% 0% C. Fiscal Impact Measures Net Fiscal Impact: above\Coclow) current GF revenues of $8,162,400 $1,975,700 Net Fiscal Impact: above\Coelow) the buildout Break Even Point, estimated at $11,852,600 ($2,640,800) Net Fiscal Impact: total estimated GF revenues from commercial uses at buildout. $9,211,800 % ofBuildout C, en. Fund Revenues, currently at 28.8%. 22.4% % Above~Below Break Even Point -6.4% source: AGAJANIAN & Aasoclates Table 29: Scenario Performance - Capturing Minimum Market Demand New Comm. Development 49 52 0 0 0 5 34 140 A. Land Availability Measures Available Land (At.) 146 762 422 762 298 762 762 1,002 Potential Land (At.) 146 1,255 487 1,339 736 1,339 1,339 1,714 % of Avail. Land Used 34% 7% 0% 0% 0% 1% 4% 14% B. Market Risk Measures Potential from Leakage (At.) 27 34 41 0 0 0 30 132 Minimum Market Capture (At.) 49 52 0 0 0 5 34 140 Total Subregional Demand (At.) 155 164 134 934 118 57 108 1,670 % of Total Market Capture 32% 32% 0% 0% 0% 9% 31% 8% C. Fiscal Impact Measures Net Fiscal Impact: above\Coelow) current GF revenues of $8,162,400 $1,937,761 Net Fiscal Impact: aboveXCoelow) the buildout Break Even Point, estimated at $11,852,600 ($2,678;39) Net Fiscal Impact: total estimated GF revenues f~om commercial uses at buildouL $9,173,861 % ofBuildout C_~n. Fond Revenues, currently at 28.8%. 22.3% % Above'~Below Break Even Point ~.~% Source: AGA./ANIAN & Arson|ales Table 30: Scenario Performance - Capturing Maximum Market Demand Nei$. Colranunily Regional C~,ui~cial Other Telal Retail Retail Retail Office R~e, atioix Lodes Coem~ Commet~ New Cornre. Development 155 164 134 934 118 57 108 1,670 A. Land Availability Measures Available Land (Ac.) 146 762 422 762 298 762 762 1,002 Potential Land (Ac.) 146 1,255 487 1,339 736 1,339 1,339 1,714 % of Avail. Land Used 106°.4 22% 32*/0 123./o 40*/0 7% 14'/0 167% B. Market Risk Measures Potential f~om Leakage (Ac.) 27 34 41 0 0 0 30 132 IV~imum Market Capture (Ac.) 49 52 0 0 0 5 34 140 Total Subregional Dernnnd (Ac.) 155 164 134 934 118 57 108 1,670 % of Total Market Capture 100% 100"/o 100% 100% 100% 99"/, 100% 100% C. Fiscal Impact Measures Net Fiscal Impact: above\Coelow) current GF revenues of $8,162,400 $16,245,236 Net Fiscal Impact: nboveXCoelow) the buildout Break Even Point, estimated at $11,852,600 $11,628,736 Net Fiscal Impact: total estimated GF revenues from commercial uses at buildout $23,481,336 % of Buildout Gen. Fund Revenues, currently at 28.8%. 57.1% % Above'~elow Break Even Point 28.3% source: AGAJANIAN & Ass~late~ Table 31: Scenario Performance - Capturing Population Growth Demand N=ig. Community Regional C.~an~ial R~il R.e~il Retail New Cornre. Development 49 51 42 293 37 18 34 524 A. Land Availability Measures Available Lend (Ac.) 146 762 422 762 298 762 762 1,002 Potential Land (At.) 146 1,255 487 1,33c) 736 1,339 1,339 1;14 % of Avail. Land Used M% 7% 10% 38% 12% 2% 4% 52% 'B. Market Risk Measures Potential from Leakage (Ac.) 27 34 41 0 0 0 30 132 Minimum Market Capture (At.) 49 52 0 0 0 5 34 140 Total Subregional Demend (At.) 155 164 134 934 118 57 108 1,670 % of Total Market Capture 32% 31% .31% ;31% 31% 31% 31% 31% C. Fiscal Impact Measures Net Fiscal Impact: above\Coelow) current GF revenues of $8,162,400 $5,098,106 Net Fiscal Impact: above\Coelow) the buildout Break Even Point, estimated at $11,852,600 $481,606 Net Fiscal Impact: total estimated GF revenues from commercial uses at buildout. $12,334,206 % ofBuildout Gen. Fund Revenues, currently at 28.8%. 30.0% % Above~E~elow Break Even Point 1.2% Source: AGAJANIAN & Atsoc|ates Ran~ho Cucamonga Comm~.r~l ~ IJ~ snd Mst~ Study AGAJANIAN & Asaoe, at~l Table 32: Scenario Performance - Capturing Site Availability Share Nei$ Ccgallunity R~gional C.~nm,~'¢~l 0rhea' Total Raail Re, all P, ctail O~k~ P,~rmi~ Lod~ C~mnt Commw~l New Cornre. Development 50 50 44 303 38 18 35 538 A. Land Availability Measures Available Land (Ac.) 146 762 422 762 298 762 762 1,002 potentialLand(At.) 146 1,255 487 1,339 736 1,339 1,339 1,714 % of Avail. Land Used 54% 7% 10% 40% 15% 2% $% M% B. Market Risk Measures Potential from Leakage (At.) 27 34 41 0 0 0 30 132 Minimum Market Capture (At.) 49 52 0 0 0 5 34 140 Total Subregional Denmad (Ac.) 155 164 134 934 I 18 57 108 1,670 % of Tntal Market Capture 52% 30% 33% 32% 32% 31% 32% 52% C. Fiscal Impact Measures Net Fiscal Impact: above~t~elow) current GF revenues of $8,162,400 $5,208,041 Net Fiscal Impact: aboveX(below) the buildout Break Even Point, estimated at $11,852,600 $591,541 Net Fiscal Impact: total estimated GF revenues fi-om conunercial uses at buildout. $12,444,141 % ofBuildout Gen. Fund Revenues, currently at 28.8%. 30.2% % Above~elow Break Even Point 1.4% sourte: AGAJANIAN & Assoelate~ Table 33: Scenario Performance - Fiscal Break Even Neig. Community Regional C~luss:gial Other Total Retail Retail Retail Office Recreation Lodgings Cornre. C<m~.~.,7' ' New Comm. Development 55 74 40 120 60 10 60 419 A. Land Availability Measures Available Land (Ac.) 146 762 422 762 298 762 762 1,002 Potential Land (Ac.) 146 1,255 487 1,339 736 1,339 1,339 1,714 % of Avail. Land Used 38% 10% 9% 16% 20% 1% 8% 42% B. Market Risk Measures Potcntial from Lcakage (Ac.) 27 34 41 0 0 0 30 132 Minimum Market Capture (Ac.) 49 52 0 0 0 5 34 140 Total Subregional Demand (Ac.) 155 164 134 934 118 57 108 1,670 % of Total Market Capture 35% 45% 30% 13% 51% 17% 55% 25% C. Fiscal Impact Measures Net Fiscal Impact: abovc~oelow) current GF revenues of$8,162,400 $4,616,707 Net Fiscal Impact: above\Coelow) the buildout Break Even Point, estimated at $11,852,600 $207 Net Fiscal Impact: total estimated GF revenues from commercial uses at buildout. $11,852,807 % ofBuildout Gen. Fund Revenues, currently at 28.8%. 28.8% % Above'~Below Break Even Point 0.0% Source: AGAJANLAN & Anochtes Table 34: Scenario Performance - Share of Buildout Population New Comm. Development 83 92 75 58 100 5 58 471 A. Land Availability Measures Available Land (Ac.) 146 762 422 762 298 762 762 1,002 PotentialLand(At.) 146 1,255 487 1,339 736 1,339 1,339 1,714 % of Avail. Land Used 57% 12% 18% 8% ;34% 1% 8% 47% . B. Market Risk Measures Potential from Leakage (Ac.) 27 34 41 0 0 0 30 132 Minimum Market Capture (At.) 49 52 0 0 0 5 34 140 Total Subregional Demand (Ac.) 155 164 134 934 118 57 108 1,670 % of Total Market Capture 53% 56% 56% 6% 85% 9% 54% 28% C. Fiscal hapact Measures Net Fiscal Impact: aboveXCoelow) current GF revenues of $8,162,400 $5,381,139 Net Fiscal Impact: aboveXCoelow) the buildout Break Even Point, estimated at $11,852,600 $764,639 Net Fiscal Impact: total estimated GF revenues from commercial uses at buildout. $12,617,239 % ofBuildout Gen. Fund Revenues, currently at 28.8%. 30.7% % Above'xBelow Break Even Point 1.9% Rantho Cuomonga Comnm~bl Land Uw and Matl~ Study 62 AGAJANIAN & A~mclatts VI. STUDY HNDINGS The three performance measures were estimated for each of the sevan scenarios described in the preceding Section. The performance of each scenario is presented on Tables 28 to 34. A summary of the scenario results are presented on Table 35 and the key findings highlighted below. The implications of these findings ~'om the scenario analysis for commercial land use policy for Rancho Cucamonga follow the comparative analysis of scenarios. Table 35: Summary of Scenario Performance % of Land % of Total % (+~-) GF Total Cornre. Scenarios Analyzed Used MItt. Capture Rev. Share Acgs Dev. 1. Capturing Retail Sales Leakage 13% 0% -6.4% 132 2. Capturing Minimum Market Demand 14% 8% -6.5% 140 3. Capturing Maxnnum Market Demand 167% 100% 28.3% 1,670 4. Capturing Pop. Growth Demand 52% 31% 1.2% 524 5. Capturing Site Availability Share 54% 32% 1.4% 538 6. Fiscal Break Even 42% 25% 0.0% 419 7. Share of Buildout Population 47% 28% 1.9% 471 A. COMPARATIVE ANALYSIS OF SCENARIO IMPACTS i. Fiscal Performance Scenarios 1 (at -6.4%) and 2 (at -6.5%) do not meet the minimum criteria to not ~rodg the share of commercially generated General Fund revenues. This means that the city will need to capture more than the amount of leakage and minimum market damand. The break even point is estimated at 419 acres of new commercial development. Conur, ercial development above 419 ac~es produces a positive net increase to the sham of commercially generated General Fund revenues. Capturing all of the available demand would yield a 28.3% increase to the General Fund revenues. ii. Market Performance It is not unreasonable to expect that Rancho Cucamonga can capture up to 35% of the future subregional commercial damand since this is roughly the city's share of subregional population growth. Among the scenarios with positive fiscal benefits which am within this reasonable range of market capture am Scenario 4 (524 acres), Scenario 7 (471 acres), and Scenario 5 (538 acres). iii. Site Availability There appears to be more than enough commercial zon~l undeveloped land in the city to accommodate all of the Scenarios except Scenario 3, which assumed development of all 1,670 acres. Yet even Scenario 3 can be handled with Rancho Cucamonga's 1,714 acres of potential commercial land that may be made available for commercial development. B. IMPLICATIONS FOR COMMERCIAL LAND USE POLICY i. AmOunt Of Commercial Land Use Development Based upon this mmatio analysis it can be concluded that a reasonable target for commercial development in Rancho Cucamonga would be between 400 to 550 acres of commercial development. This new commercial development would be in addition to the existing commercial base. This amount of commercial development can be reasonably supporteel and attracted to the city by buildout. Additionally, this amount of commercial development will marginally increase flag share of commercially generated General Fund revenues by buildout. With this target for commercial development m the city the issue arises regarding where to place this commercial development, and what types of commercial uses should be selected for attraction. Cle~ly the city will want to make the best sites available for the most beneficial of the targeted commercial uses in order to increase the chances of actually attracting them to Lhe city. The land use options available to the city to address this issue is presented in the following Section. ii. Excess Commemially Zoned Land This scenario analysis indicates that there is enough commercially zoned undeveloped land to accommoclate the city's needs to buildout. It appears that there may be a surplus o.f about 500 acres or more of enrren~y undeveloped commercially zoned land in the This raises an important issue regarding what to do with the excess lend. Some or all of the excess land may be comiclered a commercial roserye to accommodate unforeseen or unoxpected chang in the commercial land markets. Sufficient surplus commercial sites should be maintained throughout the city in order to avoid artificially inflating the market value of the land under monopoly conditions, especially at commercial nodes and along commercial corridors. There may also be a need to fezone other parcels to commercial zones because they may be well suited for competitive commercial development Sites within the city which are suitable for commercial development, but are not zoned for such uses, should be rezonod to commercial uses in order to accommodate commercial development. However, any additions to the commercial supply should be counterbalanced with the removal of at least the same amount of commercially zoned land to keep the net commercial land supply at or below current levels. Other surplus commercial sites may be rezoned to other uses, such as residential, institutional, or mixed uses. Surplus commercial land mzoned for residential uses offers one of the befier approaches to reducing the commercial land inventory. This conversion is a positive way to roduce surplus commercial land since greater residential developraent will help support greater local commercial development. The conversion orS00 acres ofcommemial land to residential uses could add 3,500 new dwelling units and increase locally supported commercial uses by about 25 acres. Conversion of commercial land to indus~'ial uses does not appear suitable in light of the ample undeveloped industrial a~cege available within the city. Mixed use sites with a combination of commercial and residential uses may be appropriate for some commercial sites where residential uses are compatible with the surrounding commercial uses. The available land use options to address this issue are presented in the following Section. Figure 9: Summary of Scenario Performance iii. Fiscal Needs to Buildout Rancho Cucamonga is competitive enough to capture tho 419 acres of commercial development to at least maintain the current 28.8% share of commarcially generated General Fund revenues. This addresses the concern about how much additional commercial development is needed to break even. The analysis also indicated that Rancho Cucamonga can reasonably attempt to capture a sufficiently high enough she of future commercial development to marginally increase the share of commercially generated General Fund revenues by 1.9%. Given the uncertainties regarding the future availability of other General Fund revenue sources it would be prudent for the city to consider increasing the future share of commercially generated General Fund revenues. VII. AVAILABLE LAND USE OPTIONS Attracting 400 to 550 acres of commercial development to Rancho Cucamonga will require a strong and focused effort Cc~m~n~cial land us~ decisions in the this last phase of development will have a lasting effect upon the fiscal health of the city. It is critical .tint the ~malning commercial devalopmcnt in the city bc carefully selceted and sited m order to insure positive community benefits and land use synergy. We would recommend a cormnercial development strategy which contains the following land use options. A. LONG TERM LAND USE OPTIONS Long term commercial land use options id~tify means to promote the attraction of keg commercial nscs to the city. These options describe approaches the city may wish to pursue in order to address its commercial land use issues and also attract and site new commercial developmere in the city. These land nsc options seek to guide the city toward a desired anmmarcial mix by buildout. · R~serve Excess Undeveloped Commercially Zoned Land Maintain a suitable reserve ofcermnercially zoned land above the 550 acre target range in order to account for unforeseen or unexpected opportunities up to and beyond buildout. About 200 to 250 aeres of surplus commercial land should bc sufficient to kcop market prices competitive. These reserve parcels should be located in areas that are expected to developed later than earlier. Sites in Subareas 7 and 8, near future Highway 30 onNoff ramps and I- 15 un\off ramps north of Baseline arc good candidates for reserve sites. Parcels larger than 5 acres and under single ownership are most suitable for the reserve. AGAJANIAN & Alloehtet 68 Some of the surplus commercial land may be rezoned to residential or mixed uses as a means to reduce sites which would disperse commcreial development away from commercial nodes and corridors. · Promote Aggressive Commercial Development It would be in the interest of the city to atWact commercial uses sooner than later. There is enly so much suppoaable commercial d~elopment left by subregional buildout. This subregional buildout may occur in 10 to 20 years. However, commercial development, especially retail development, maidpates growth and is likely to be in place even before residential buildout is complete. Cousequenfiy, an aggressive posture attempting to capture the bulk, if not all, of the required commercial development within 10 years should not be considered too hasty. · Build Synergy With Commercial Siting ~al development is charectedzed by uses searching for locations where people concenWate. Placing complementary uses together can ereate retail synergy and boost the productivity of the commercial sites. This is best done on large undeveloped sites with single ownership such as the Victoria G~rdeus site and the General Dynamics site, as exemplified by Terra Vista Towne Center. These large sites can better blend cemplementary usas, such as retail taxi enteCtalnraent uses, because greater site control produces more opportunities for synergistic site plmming. · Orient New Retail Toward Foothill Growth Areas Much of the commercial denrand in the subregion will be generated in northern Rancho Cucamonga and Fontam. Development of northern Fontaria will likely follow residential development in northern Rancho Cucamonga. Consequenfiy, siting of commercial land should stress all of the onXoff ramps along I- 15 since these roadways offer the only access points to northern Fontaria. Early development commercial uses, supported by development in northern Rencho Cucamonga, can preempt community and regional level commercial development in Fontaria and help capture a greater share of market demand, as needad. · Consider Urban Entertainment Canter at Regional Mall Site A complementmy commercial land use now emerging as an alternative to the regional shopping center sites is the urban entertainment center. These developments attract customers seeking both entet~aimnent and shopping opportunities. Such a use can serve the entire Inland Empire and reach into the Victor Valley area. Linked with other Foothill Boulevard commercial uses and the Epicenter, such an entertainment center can bring both recognition and benefits to the city. ® Maintain Foothill Boulevard as the Principal Commercial Corridor Foothill Boulevard ks the principal commercial corridor within the city. It will continue to serve as the principal commercial corridor after buildout. Maintaimng this commercial role will require both the integration of functionally similar commercial uses within cowldot segments and the segregation of these distinct commercial corridor segments. The corridor should be integrated with a common municipal design vocabulary, easy movement along the corridor, ample parking, and seamless transitions between the three district functional segments. The corridor should also be segregated with clear and distinct commercial identities. Westeta Foothill Boulevard should continue to provide the city with neighborhood retail, commumty retail, recreational end other commercial uses, particularly those which benefit most from traffic end smaller lot sizes. Central Foothill .Bo~evard, between Haven Avenue and Rochester, should continue to develop commumty retail stores, personal service offices and commercial recreational uses in largely "center" settings. Eastern Foothill Boulevard should be reserved for regional level commercial uses such as regional retail, specialty retail, commercial recreational, end other high volume commercial uses which cen most benefit from this highly accessible end visible location. Western Foothill Boulevard will be affected by the new commercial development to some degree; however, the impact is likely to be slow and subtle. New commercial development in the corridor will continue to in~'oduce new price and selection competition detrimental to existing stores in the corridor, 'especially existing stores which directly compete for community level retail goods and services. Stores which presenay provide neighborhood level retail goods end services to the nearby residential areas, provide travel related services to through traffic in the corridor, provide auto repair, parts, and fuel and provide commercial services suited to small lots will not be dirce~y affected by the new commercial development. The impacts will occur slowly as the new commcreial development is brought on-line over the next 10-20 years. One to this long impact period, meny of the directly affected existing stores in the corridor will gradually chenge in respouse to market conditions. Thus, the impacts of new commercial development in the Foothill Boulevard corridor will likely be slow and gradual. · Develop a Retail Presence on 4th Street Promote the development of community and regional retail uses along the 4th Street corridor in order to intercept the commercial traffic generated by the Ontario Mills project. Arrange to have more competitive sites available that can benefit from 4th Street on\off ramp traffic. · Continue the Haven Avenue Office Corridor There is ,u~l,lc commercial land for retail, recreational, lodgings, and other commercial uses within the city to accommodate non-office commercial dcvclopment. Because the Haven Avenue comdor is proximate to industrial districts, but not residential districts, the corridor is a very suitable location to concentrate office uses. · Maximize Fiscal Benefits from Commercial Development Build as much as of the new commercial development in the Redevelopment Project Area in order to generate gre~t~ property tax (increment) revenues to the city. Despite the limited applications for RDA increment dollars, they still benefit the city greafiy. It does not appear that the RDA would need to provide incentives to atWact commemial development at this time in light of the ample supply of commercial land; however, the RDA should be propared to make incentives available if in the future such incentives are necessary to capture a major commercial project, such as a regional retail center. Furthermore, the city should strive to develop retail stores, commercial recreational facilities, and lodgings as a means to leverage the fiscal benefits of coramereial development. · Maintain Northern Commercial Areas All appea~ to be balance in Subareas 7 and 8 with regard to existing commercial land and commercial demand. Commercial land planning and siting for these northern residential dislricts has created a well oldered and balanced commercial land inventory. The city should, however, look closely at the sphere of influence area and consider the provision of neighborhood level retail uses for these future residential districts. B. SHORT TERM LAND USE OPTIONS · Continue to Promote Commercial Development Along Foothill Boulevard The city should promote the development of community level retail development along the north side of Foothill Boulevard in Subarea 2. Such development will help create a critical mass of community level retail outlets which will help capture a larger share of future subregional sales. The frontage properties along the southern side of Foothill Boulevard in Subarea 2 should be reserved for commercial development, but not necessarily retail development. Commercial uses on the south side should complement, not compete with, the retail uses on the north side of the corridor. These commercial uses may include commercial recreational facilities, entertainment outlets, personal service offices and medical offices. · Provide Retail Sites on 4th Street The city should move to provide retail sites along 4th Street m order to directly cx~'npete with c~um,.nity retail uses planned for the Ontario Mills project. These sites should front on 4th Street, be located close to the 1-15, and have sufficient depth (up to 300 feet) to ac~eommoclate high volume, discount pric~t, community level retail stores with surface parking. Fr~way related uses, such as gas stations, lodging or restaurants should also be lceated in this area in order to help reduce the city's retail sales leakage. Such sites should be provided as soon as possible between the I-15 and Milllcen Avenue in order to preempt retail development at the Ontario Mills site. · Consider the Need for Commercial Uses on Archibald Avenue The fezone application to convert industrial laud to residential uses in Subarea 4 may proceed without the need for much, if any, commercial frontage along Archibald Avenue. A neighborhood level retail site located at the comer of Archibald and 6th Street would be ample to service the needs of the new residents in the immediate vicinity. · Find a Hotel Site to Benefit from Raceway Development The auto raceway approved for development at the Kaiser site will host its fffst race in May of 1997. Spin off benefits from racetrack spectators can be a source ofdamand for hotehnotel facilities in the immediate vicinity. This damand will be too infrequent to provide year round demand necessary to feasibly operate a hotel. However, this demand may help revive existing hotels in the subregion. As the raceway matures the demand for spectator serving commercial uses will become clearer. It would be helpful to identify suitable sites for hotel development. Top priority should be focussed at the properties located to the east of 1-15 along Foothill Boulevard and near the 1- 1 5 along 4th Street. · Expand Commercial Sites at the 1- 1 5\Foothill Boulevard On\Off Ramp Because this location auchors the regional access W Foothill Boulevard it should become a major commercial node in the city. These sites to the east of 1-15 are prime competitive sites for con'ane~al dev~opment which attract subregional customers and preempt anmnercial development in nonhum Fontana. Thus, adding commercial laud in the city east of the 1- 1 5 will greatly benefit the city in the future. · Monitor Commercial Land Use Performauce and Inventory Keeping track of retail sales as measure of commercial performance is an important tool to gauge the city's efforts at capturing retail sales leakage and target share of new subregional commercial development. Similarly, keeping track of the city's economic Pand~ Ct~n~= C~mmett~l Land Use and M.rl~et ~ady AGAJANIAN & Associates 7 2 performance with the use of business license information can help the city assess the acincvement of their commercial devalopmcnt targets. These two key sources of information should be annually eval,mte~] over the next 10 years since this is the critical period for Rancho Cucamonga's commercial development. Retail sales tax information should be examined annually to detemine ff progress is being made with regard to retail sales leakage and subregional capture share. Retail sales leakage ( as computed on Table 14) should be evaluated to determine the amount of the leakage rech__,ced_ annually. Efforts should be made to attract the commercial uses which show the greatest potential to reduce the amount of retail sales leakage. By monitoring the progress of retail sales leakage, the city can remain aware and committed to reducing leakage with identified commercial uses. Similarly, mmual retail sales tax analysis for the subregion (as computed on Table 14) will quantify the rate of retail sales capture for the city. The eity's target of 400 to 550 acres of commercial development should increase the current capture rate of 19.4% to about 25%. Progress toward buildout capture can help the city determine the pace of the commercial development in relation to the buildout target and provide suf3~eient warning if the city is likely to capture less than what is desired and needed. Business license information as computed on Table 12 can also be compiled annually. Such a table can help assess the proportion and rate of growth for commercial land users. In particular, such a table can reveal how the economic base of the city is changing and provide useful information as to growing and lagging business sectors. Awareness of these business sector changes can help the city make more informed decisions regarding the size, composition and trends in the Raneho Cucamonga economy and its desired direction of growth. · Initiate Study Detailing Proposed Commercial Land Use Clmnges There are several applications to rezone indusuial properties for commercial uses. Each of these applications should be evaluated with reference to the findings in this report and the direction selected by the City Council. Any changes to the general plan or specific plans should all be done promptly and as a single ection in order to avoid piecemeal alterations. This will require that the city initiate a study to recommend specific changes within the context of these commercial land use options. · Initiate Feasibility Study for Entertainment Center at Mall Site A study to closely examine the feasibihty of a regional entertainment center at the regional mall site should be imtiated promptly In order to preempt other competitive sites in the subregion. More specifically, this study should evaluate the entire Subarea 3, west of 1-15, to determine if significant commercial recreational uses can be supported imd can lead to the formation of a regional entertainment node for the Inland Empire. The property owner, Redevelopmerit Agency and the city should fund such a study.