HomeMy WebLinkAbout1995/12/20 - Agenda PacketAGENDA
CITY OF RANCHO CUCAMONGA
CITY COUNCIL/PLANNING COMMISSION
Adjourned Joint Meeting
December 20, 1995 - 4:00 p.m.
Tri Communities Room
10500 Civic Center Drive
Rancho Cucamonga, Califomia
Pledge of Allegiance
Roll Call:
Alexander
Barker
A. CALL TO ORDER
~., Biane , Curatalo , Gutierrez , Willjams
__, Lumpp __., McNiel , Melcher , Tolstoy
B. ITEM OF DISCUSSION
DISCUSSION AND CONSIDERATION OF ACCEPTING THE COMMERCIAL LAND
USE STUDY
C. COMMUNICATIONS FROM THE PUBLIC
This is the time and place for the general public to address the City Council/Planning Commission. State law
prohibits the Council/Commission from addressing any issue not previously included on the agenda. The
Council/Commission may receive testimony and set the matter for a subsequent meeting. Comments are to be
limited to five minutes per individual.
City Council/Planning Commission Agenda
December 20, 1995
Page 2
D. ADJOURNMENT
I, Debra J. Adams, City Clerk of the City of Rancho Cucamonga, hereby certify that a true, accurate copy of the
foregoing agenda was posted on December 14, 1995, seventy-two (72) hours prior to the meeting per Government
Code 54954.2 at 10500 Civic Center Drive, Rancho Cucamonga, California.
Economics Research Associates
Affiliated with 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 recently asked the planning consulting tinn,
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."
ANAl ,YSIS OF THE STUDY
Essentially, the Agajanian study begins by developing a picture of the real estate
market supply and demand conditions that exist throughout the subregion (the cities of
Upland, Rancho Cucamonga, Fontana, and Ontario) in general, and Rancho Cucamonga in
particular. By looking at demographic and socioeconomic elements, such as growth trends in
household income, population, housing, and resident spending patterns, the report arrives at
the following key conclusions:
10990 Wilshire Boulevard, Suite 1600, Los Angeles, California 90024 · (310) 477-9585 Fax: (310) 478-1950
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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:
,
,
Give consideration to an Urban Entertainment Center at the regional mall site
(Victoria Gardens).
Rancho Cucamonga should focus the bulk of its commercial development
effort toward the Foothill Boulevard corridor, especially in the primary retail
node near the I-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.
As both a long-run and short-term land use strategy, develop a retail presence
on 4th Street.
OUR FINDINGS
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 1-15) 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
Affiliated with Drivers Jonas
Mr. James P. Axtel!
ERA Project No. 11748
December 19, 1995
Page 3
a,
Neighborhood retail along Foothill Boulevard, and elsewhere in the
community, would be largely unaffected. The 4th Street retail node would be
regional retail in design, and would generally not compete with neighborhood
retail outlets.
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 Calfornia.
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 patterns 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 them 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
Affiliated with Drivers Jonas
Mr. James P. Axtell
ERA Project No. 11748
December 19, 1995
Page 4
We plan to attend 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
q q o. o. q o. o. o. o. o. o. o.
December 13, 1995
Mr. Brad Buller, City Planner
Mr. David Barker, Chairman, Planning Commission
City of Rancho Cucamonga
10500 Civic Center Dr.
Rancho Cucamonga, CA 91729
(Via Fax: 909/987-6499)
(Via Fax: 909/989-6028)
RE:
FOLLOW-UP QUESTIONS AND DISCUSSION FROM 11/29 PLANNING CO~IN'IISSION
MEETING REGARDING AGAJANIAN & ASSOCIATES COM~'IERCIAL LAND USE AND
MARKET STUDY.
Gentlemen:
Thank 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 Reser~,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 property owners.
The primary points that am 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 unmet and future demand for additional commercial uses from the existing population base
in both the subregion and the greater market area. Another way 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 and retailers in adjacent cities for a significant portion of their
expenditures. For commercial uses other than retail stores, it is clear that because of its location at
the 1-10/I-15 intersection, the existence of San Bernardino and Riverside County's only international
WOHL INVESTSlENT COMPANY 2402 Michelson. Suite 170. Irvine, California 92715 · (714) 955-0115 · FAX: (714) 755-3971
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
subregion will continue the trend of attracting a disproportionally high number of businesses locating
in the San Bernardino/Riverside area. In other words, if the subregion's population did not grow any
further, there would still be a significant 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 significantly increase the demand for commercial land uses over the
400-550 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 existing 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 Bernardino/Riverside region's population and
business growth areas may lead to capture rates of future demand much greater than the 28%-32%
which was used to arrive at the 400-550 acres of estimated remaining commercial land opportunities.
The st'udy recommends 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 4th Street site are
different ihan those who are considering the Foothill corridor. Based 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 to
the Mills area will only make it more difficult to at-tract retailers to the Foothill corridor where the
City can benefit most from their existence. Regardless of the City's decision on the zlth Street site,
it is important that the City focuses on doing everything 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 Foothill, it is all under the
ownership of one developer which does not provide adequate options for retailers considering to locate
on/he Foothill corridor.
We have an immediate opportunity to capture at least one significant tenant, "the Good Guys! ", who will
otherwise 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 possible 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 further.
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. Agajainian, 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 partel 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 will be more likely to cross the street
and spend dollars at the Mills rather than stay and shop along the Foothill corridor.
RESPONSE: Mr. Agajanian stated that the retailers looking to locate at the Mills site are different than
those who would iocate 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 Mills 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, opportunistic move to
grab sales away from the Mills.
Mr. Brad Buller
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 with are looking for one
location in this market to service the entire sub-region described in the Study and beyond. These retailers
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 foothills 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 synergy 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 "aggressively" 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 analyzd the second part of Mr. Agajanian's response it is important to understand the differences in
the shopping patterns associated with a single large enclosed r. egional attractor like the Mills versus the
shopping patterns associated with a sub-regional and regional retail corridor such as Foothill Blvd. 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 will 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 t~vo 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
i.dentified several "big box" retailers located in close proximity where they can easily be comparatively
shopped or (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
extended 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 this is that the business locating across the street from the Mills will not
necessarily 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 North 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 growth of critical mass on the
Foothill Corridor.
A concept .that has proven successful in city after city is that of putting 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 conveniefitly.
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 the synergy with the Mills; and (3)will attract 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 Bullet
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 critical mass to its existing retail base and therefore make it more likely for
shoppers to stay in Rancho Cucamonga rather than establish a new shopping pattern of
traveling to the south side of the City?
RESPONSE: Mr. Agajanian agreed that the City should continue its efforts to expand the critical mass
on th'e 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 two sites and discounts the
potential adverse effects that adding more retail space at the 4th Street location may have on the Cit,y'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 1Biely 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 agree 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
aggressively pursue the remaining 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 fall at both locations.
QUESTION #2. The report identifies the Foothill/I-15 interchange as the primary retail node for
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 Bullet
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 Tetra
Vista site? Is it due to greater critical mass at the Tetra 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 stated that the study was "global" in nature at that it did not look at the
relative success of any one site in particular 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 performance and other
criteria. Mr Agajanian emphasized that the freeway nodes be the central retail points in 10 to 20 years.
FOLLOW -UP DISCUSSION: My original 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 on a~'ailable
information (i.e. Best Buy is out-performing Circuit City), it may be reasonable to conclude that the
existing 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 retailers7
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 these. would be the same tenants who would
be considering the Mills site. He again described the Foothill corridor as a community draw and the
Mills site a distinctly 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 determine 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 retail expenditures based on (1) percentage of available commercial land; (2) percentage. of'
population; or (3) percentage of increase in population. This would indicate a capture rate of between
Mr. Brad Buller
Mr. David Barker
December 13.1995
PaSe 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°7'o or higher. Should Rancho Cucamonga limit its
future development potential by assuming it cannot capture more than its pro rata share of
these future expenditures?
RESPONSE: Mr. Agajanian agreed that the city should not limit its 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 within 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 am viable. Mr. Buller 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 permitted uses.
FOLLOW-UP DISCUSSION: The reason for my question is that the answer to "how much retail
business should the City strive to or expect to capture" 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 Ihe 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 made in 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 lata 80's and early 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 found. Examples of this is Rancho Cucamonga include the Gemco, KMart and Payless sites which
are not located in the City's retail core. No sudcessful tenant would consider these sites regardless of
price because of their inferior locations.
Second, the financing for speculative development which fueled the rapid expan.sions in the 80's is no
longer available. Many speculative retail developments in the 80's were built in order to generate
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 $5,644 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 subarea, would it be reasonable to suggest that it
should be expected to capture a higher than pro-rate share of the retail dollars spent in the
subregion?
RESPONSE: Mr. Agajanian stated that the Study did take into consideration the City's hi.'gher than
average incomes.
FOLLOW-UP QUESTION: Although the Study looks at capture rates based various scenarios including
available land, future growth demand, and percentage of build-out population, it does not make
adjustments to any of these to take into account the higher 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 final conclusion of the number of acres needed to
accommodate future growth be adjusted upwards by some number (perhaps the .17% difference in average
income) 7
(C)
coula the success of Terra Vista Town Center arid .-Town Center Square be an indicator of
the retailer's desire to be located as close as possible to the heart of the City's commercial
corridor and therefore its strong demographics.
RESPONSE: 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
to allow for the adequate supply of commercial sites, particularly in areas that will help create additional
synergy with existing uses. The success of the over 1 million square feet of existing Foothill 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 planned 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 guarantee 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, Terra 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 current 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
Est2 Population
Growth th~'ough
Build-out
Current Taxable
Retail Expenditure
Per Person
Future Demand
· for Retail Goods
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
t.o the $1.3 billion of estimated future demand. It goes on to say, "The office demand estimates are less
clear because it is heavily dependant upon anticipated Personal/Business Service and Financial sector
employment grow-th 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
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 commercial 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 percentage 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 leakage
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 providers 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 disproportionatly high share of the businesses which
will be loc.ating in the San Bernardino/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 tha~i"what can be estimated by looking solely at the.'$1.3 billion of demand for retail goods
from future population growth 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 Buller
Mr. David Barker
December 13, 1995
Page 12
In 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 significantly underestimated.
that the City 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 will be hard won and will require that every competitive advantage be well used including
the attraction of new commercial uses, competitive uses, complementary uses, and the use of synergy
among the commercial uses to attract development to the city." Should the city aggressively seek ways
to add to the existing critical mass on the Foothill corridor in order to overcome this disadvantage?
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 will'.mg to meet
the building requirements of the City.
FOLLOW-UP DISCUSSION: The question posed at the end of the above paragraph is admittedly
redundant. 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 only 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 sales is obviously due to the fact that the City does not have an auto mall nor will it ever have the
truck stops and gaff stations along the 1-10 freeway that are found in Ontario. Apparently contrary to
statements in the Study, the city does appear to have enough cri'tical mass in its existing primary retail
corridor to be competitive in attracting new businesses. I concur with the conclusion that there is limited
time to attract these retailers as they are likely to locate in this market prior to 'full buildout and that it
is imperative that the City aggressively pursue opportunities to capture these retailers.
pQuU~ESXFZoOmNm~1 summary, throughout the report it talks about the clustering of retail and that by
uses in close proximity to each other, the city can "create retail synergy and 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 Tetra Vista and
the 1-15}?
Mr. Brad Bullet
Mr. David Barker
December 13, 1995
Page 13
(b)
Should the City consider re-zoning the South side of Foothill Blvd. 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". He 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. Agajanian 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 synergy work seems to
support the re-zoning of the south side of Foothill. The argument that this will create a "gap tooth
corridor" may be valid in the short run but if planned 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 i~f the street) could lead to a synergistic "snowball effect" as more and more retailers choose
to locate on the coi-ridor. The argument that retailers will start.to:locate in disparate locations throughout
the city does not appear valid today as discussed in the follow-up to Question 3(a).
Although I have attempted to keep the above questions general in nature, I will not deny that the answers
to 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 proposed 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 Buller
Mr. David Barker
December 13, 1995
PaSe 14
I am in the process of doing an analysis of the differences between this 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 know, Mr. Paul Biane 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
Council members. I mention this only because I want to assure you that it is not my intention to subvert
the process which I understand ~ve need to go through with staff and the Plarming Commission by
providing information to or dealing directly with members of the City Council. I appreciate the "open
channel" of communication which we have established and I look forward to working with Staff and the
Commission to arrive at the best solution for our site.
Sincerely,
WOHL/RANCHO PARTNERS
General Parmet
CO:
Mr.' Melcher
Mr. Tolstoy
Mr. McNiel
Mr. Lumpp
Mr. Curatalo
Mr. Biane
Mr. Alexander
Ms. Willtams
Mr. Gutierrez
{~nclosure
AGAJANIAN
4, ASSOCIATES
Development Economic
~ Planning Consultants
Rancho Cucamonga
COMMERCIAL LAND USE AND MARKET STUDY
Prepared for:
City of Rancho Cucamonga
Community Development Department
Planning Division
10500 Civic Center Drive
Rancho Cucamonga, California 91729
October 31, 1995
Rancho Cucamonga
Commercial Land Use and Market Study
Table of Contents
Pagc
II.
III.
IV.
INTRODUCTION
Ao
Study Issues and Objectives .............................. 1
Summary of Findings ................................... 2
Available Land Use Options ............................. 6
EXISTING CONDITIONS
A,
B.
C.
D.
Population and Housing Characteristics .................... 8
Economic Conditions .................................. 13
Commercial Land Inventory ............................. 25
Fiscal Performance of Commercial Land Uses .............. 30
MARKET DEMAND CHARACTERISTICS ................... 36
AVAILABLE COMMERCIAL ACREAGE
A,
B.
C.
D.
Subregional Commercial Land Supply .................... 42
Rancho Cucamonga Commercial Sites .................... 44
Planned Subregional Commercial Development ............. 45
Competitive AdvantagesXDisadvantages of City Sites ........ 48
COMMERCIAL DEVELOPMENT SCENARIOS
A,
Scenario Performance Measures and Targets ............... 52
Commercial Development Scenarios ...................... 54
STUDY FINDINGS
A,
Comparative Analysis of Scenario Impacts ................. 65
Implications for Commercial Land Use Policy .............. 65
AVAILABLE LAND USE OPTIONS
Long Term Land Use Options ........................... 69
Short Term Land Use Options ........................... 72
Rancho Cucamonga
Commercial Land Use and Market Study
Table of Tables
Pa~c
2.
3.
4.
5,
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
Subregional Population by City ................................. 10
Subregional Household Population by City ........................ 12
Subregional Number of Households by City ....................... 12
1995 Subregional Age Profiles by City ........................... 12
1995 Annual Household Income Profiles by City ................... 14
Subregional Occupation of Residents by City ...................... 14
Subregional Total Residential Units by City ....................... 15
Subregional Single Family Dwellings ............................ 15
Subregional Multi-Family Dwellings by City ...................... 15
Estimated Number of Wage and Salary Workers by Industry ......... 16
Profile of Induslries Employing Residents by City .................. 17
Reported Gross Receipts of Rancho Cucamonga Businesses .......... 19
Taxable Retail Sales .......................................... 20
1993 Retail Sales Capture by Category ........................... 22
1993 Retail Sales Capture by Category for Rancho Cucamonga ....... 24
Rancho Cucamonga Commercial Land Use Inventory ............... 29
Per Acre Assumptions for New Commercial Development by Land Use. 31
Annual Revenue and Service Cost Assumptions .................... 31
Net Fiscal Impact of Development Outside RDA Project Area ........ 32
Net Fiscal Impact of Development Inside RDA Project Area ......... 33
Subregional Dwelling Unit Comparison .......................... 37
Subregional Population Comparison ............................. 37
Estimated Subregional Demand for Commercial Land Uses .......... 39
Subregional Commercial Land Use Comparison ................... 44
Potential Sites Available ...................................... 45
Potential New Commercial Development in Rancho Cucamonga ...... 46
Scenario Measures and Targets ................................. 56
Scenario Performance - Capturing Retail Sales Leakage ............. 57
Scenario Performance - Capturing Minimum Market Demand ......... 58
Scenario Performance - Capturing Maximum Market Demand ........ 59
Scenario Performance - Capturing Population Growth Demand ....... 60
Scenario Performance - Capturing Site Availability Share ............ 61
Scenario Performance - Fiscal Break Even ........................ 62
Scenario Performance - Share of Buildout Population ............... 63
Summary of Scenario Performance .............................. 64
Rancho Cucamonga
Commercial Land Use and Market Study
Table of Figures Page
2.
3.
4.
6.
7.
8.
9.
Population Trends by City ..................................... 10
Rancho Cueamonga Population Growth Rate ...................... 11
1991-1993 Employment Growth by Sectors ....................... 17
Share of Reported Gross Receipts in the City by Business Type ....... 18
Retail Sales Capture Rate Trends by City ......................... 21
Share of Buildout Population ................................... 38
Subregional Commercial Land Demand to Buildout ................. 40
Subregional Commercial Land Supply by City ..................... 41
Summary of Scenario Performance .............................. 67
Table of Maps
2.
3.
4.
Cities in Subregional Area ...................................... 9
Rancho Cucamonga Subareas .................................. 26
Generalized Location of Commercial Areas ....................... 43
Competitive Opportunities and Constraints ....................... 50
IU
I. INTRODUCTION
The purpose of this report is to present the findings from the Commercial Land Use
and Market study and the resulting strategic commercial land use options formulated
to address current 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, amotmt and location of existing and future commercial uses desired within the
city.
There are specific concents 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, and
the economic performance of the Foothill corridor in general. These concerns need to
be addresses 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
include:
1)
2)
3)
the dynamic supply/demand forces of subregional commercial land markets,
competitive commercial site development opportunities within the city, and
the city's neecl to maintain fiscal balance and ensure future municipal services.
Analyzing the complex interaction between these thr~ 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 opportunities in Rancho Cucamonga by looking comprehensively and with an
objective view at commercial development opportunities and constraints within the city.
Each scenario tested was analyzed with regard to its overall performance. Comparing
the outcomes for each scenario revealed which combination of commercial types,
their amounts 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 ~ out the most favorable commercial land use development strategy for the city
by addressing the following commercial land use issues:
How much short and long term commercial d~velopment can be
reasonably absorbext and supported before further development
creates significant negative business, market and fiscal impacts?
Is the overall proportion between commercial, residential and
industrial land within the city suitable to maintain long term market
support and fiscal balance?
,
Does the city need more or less commercially zoned land in the city's
commercial subareas to maintain market competitiveness and fiscal
balance?
What would be the impact of new commercial land upon existing
commercial supply ?
,
What are the fiscal consequences if commercial development occurs
in industrial zoned areas within the city?
B. SUMMARY OF FINDINGS
The following ~n~t_emcnts 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.
Population and Housing (Section H.A)
The long term cycle between rapid growth and slower growth will continue to
follow the larger economic conditions within southern Califomia and the
Ranelm Cm:mmmga ~1 Land Use and Market Study
AGAJANIAN & Asaoclates
nation.
RanchoCucamongahasbeengrowing atafasterratethanthesubreggonsince
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 evidenc~i 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 services 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 amount 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 development 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.
Rancho Cucamonga Con~mereml Land Use and Market Study
AGAJANIAN & Associates 3
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 impacts
than commercial development outside 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 estimated subregional demand for 1,670 acres of commercial
development. This translates into 453 acres of retail uses, 934 acres of office
uses, 118 acres ofcomn'ercial recreational uses, 57 acres of ledgings and 108
acres of other commercial uses within the subregion by buildout.
The bulk of the commercial growth in Rancho Cucamonga will have to be
competitively attracted to the city.
v. Inventory of Commercial Land Supply (Section IV.A)
There is a commercial 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 Cucamonga has 1,002 acres ofundevelot~ 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 rezoning an additional 712 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 Cucamonga's Competitive AdvantagesXDisadvantages
(Section IV.D)
The single greatest advantage for city commercial sites is their proximity to
Rsncho Cucssmmgs Conunerdsl Land Use snd Msrket Study
AGAJANIAN & Associates 4
the subregional growth area along the foothills of Rancho Cucamonga and
Fontana.
The I- 15 corridor presents the city with major access points to attract both
subregional and regional _W-~l~__,. The key commercial point along the I- 15 is the
Foothill Boulevard onXoff ramp.
The city has ample amounts of undeveloped commercial land in nearly all
subareas.
Rancho 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 ~xnndo analysis it can be concluded that a reasonable target
for future cofmnercial development in Rancho Cucamonga would be between
400 to 550 acres of commercial development. This new commercial
dcvcloptncnt would be in addition to the existing developed commercial base.
This amount of commercial development can be reasonably supported and
attracted to the city by buildout. Additionally, this amount 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 to at least maintain the current 28.8% share of
commercially generated General Fund revenues. This addresses the concem
about bow much additional commercial development is needed to break even.
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~offramp. Secondary effort should be directed toward the
development of Foothill corridor in general, sites near the 4th Street on%off
ramp to the 1-15, and sites near the future Highway 30 on\offramps.
Rancho Cueamengn Commerca'l Land Use and Market Study
AGAJANIAN & Asaociatts
c. AVAILABLE LAND USE OPTIONS
Attracting 400 to 550 acres of commercial development to Rancho Cucamonga will
m:luire a strong and focused effort. Commercial land use decisions in the this last phase
of devdopment will have a lasting effect upon the fiscal health of the city. It is critical
that the remaining commercial development in the city be carefully selected and sited
m order to insure 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 Comdor
· Develop a Retail Presence on 4th Street
· Continue the Haven Avenue Office Comdor
· 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
Rancho Cmatmonga Cornmenial Land Uu and Marl~t Study
AGAJANIAN & Aau~tates 6
Expand Commercial Sites at the I- 15~Foothill Boulevard On\Off Ramp
Momtor Commercial Land Use Performance and Inventory
Initiate Study Detailing Proposed Commercial Land Use Changes
Initiate Feasibility Study for Entertainment Center at Mall Site
Rancho Cucamonga Commestlal Land Use and Martt, t Study
AGAJANIAN & A~soclak, i 7
II. EXISTING CONDITIONS
The City of Rancho Cucamonga is located in the western end of San Bemardino
County, in the Inland Empire. The city is surrounded by the cities of Ontario, Fontana,
and Upland, by unincorporated County terntory, and the San Bemardino National
Forest (see Map 1 ).
The area bounded by Rancho Cucamonga and the surrounding cities make up the
competitive commercial subregional Wade area for Rancho Cucamonga. Consequently,
this Section will examine the Wen& and conditions in Rancho Cucamonga within the
context of this subregional Wade area, as depicted on Map 1.
The demographic, economic, market, land use and fiscal conditions within the
subregion defmes the direction and potential for future commercial growth and'
development in Rancho Cucamonga. This section reviews the existing conditions and
trends of there important commercial development factors for Rancho Cucamonga and
the subregional Wade area.
A. POPULATION AND HOUSING CHARACTERISTICS
The City of Rancho Cucamonga 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 from its 1980 population of 55,250 residents, indicating very rapid pace of
urban growth. Figure 1 presents the population growth Wends for Rancho Cucamonga
and the other cities within the subregional Wade area.
Rancho Cucamonga Commercial Land UM and Market Study
AGAJANIAN &Associates , 8
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Rantho Cut:amongn Commercial Land Use and Market Study
AGAJANIAN & Ass~clstes
Table 1: Subregional Population by City'
Rancho Cucamonga 55,250 66,012 101,409 105,014 110,008 113,360 115,257 117,903
Fontana 37,105 49,481 87,535 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 4~647 54,747 63,374 64,220 65,238 66,841 67,600 67,875
Subregions!Total 228,822 277,869 385,497 396,819 410,591 423,094 430,516 436,761
' Jarmusty Ist ~ ~siinmt~s of total population ~ State ofCslifofma IX-psxlment of Fresno.
aAptil I, 1990 es~imste bssed on 1990 U. S. Census resuHs.
~ AGAJANLAN & Asm:iam, Slat, sf Csllfmsis Dqsarlmmwm d' Flsms~ 14P~ U.~- C. msus
Figure 1: Population Trends by City
!~5 19~6 I~S'/ lm 1~9 1990 1991 1992 IglB 19aM 1995
Recent population growth in the city has been strong, having added 16,494 residents
between 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%,
Rancho Cucsmongs Commercial Land Use and Market Study
AGAJANIAN &Associates ] 0
compared to the subregional growth rat~ 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.
These population growth trends clearly indicate that Rancho Cucamonga grew
moderately in the first half of the 1980's, then grew very rapidly in the second half of
12%
9%
Figure 2: Rancho Cucamonga Population Growth Rate
4 "9%
10.72
7.74
g Rlncho Cucamoaga
~ Subregional Ava'agc
i
3 25*/,
19~0 - 19~5
$mm~. ACtMA,XlAN&~o~ia~m
1990 1990 -1995
the 1980's, and then 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 Califomia 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 of households (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. Fontana and Ontario residents are younger
than Rancho Cucamonga residents with median ages of 25. g and 27.0 respectively.
Rancho Cucamonga Commercial Land Use and Markit Study
AGAJANIAN & Asaociates
Table 2: Subregional Household Population by Citf
1980 I~5 19902 1991 1992 1993 1994
1995
RanchoCucamonga 54,968 65,731 101,069 104,925 107,899 111,139 112,974 115,421
Fontaria 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
SubregionaITotal 226,949 277,239 381,034 394,875 406,665 418,997 426,422 432,392
~ Janua~ 1st revised estimates of household population (excludes residents m group quarte~) from Stale of Califotma Department of Finance.
2April 1, 19~)eslimate ba,scd on 19~U.S. ~cnsus rcsuits.
Source: AGAJANIAN & Associates, State of Califar~ia Department of Finance, 1990 U,S, Certain
Table 3: Subregional Number of Households by City:
1~0 !~5 1990z 1991 1992 1993 1994 1995
RanchoCucamonga 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 23,248 23,887 23,900 23,596
Subregional Total 76,734 92,210 123,215 126,820 128,462 132,755 133,568 133,196
' Janua~ Ist revigd esmvtates ofhou~hol& (excludes group quarich) from State of California Depstment of Finance.
2 April I, 1990 estimate based on 1990 U.S. Cen~tt~ results.
Source: AG,4hlANIAN & A~ociate~ State of California Department of Finance, 1990 U.S. Cemm
Table 4:1995 Subregional Age Proides by City
Raacho
CucamonRa Fontaria Ontario Unland
SubreRion
Age Categories
0 - 17 32.8% 38.6% 34.8% 28.6% 34.2%
18 - 34 27.4% 30.2% 30.2% 25.2% 27.6%
34 - 64 34.9% 26.3% 28.9% 37.9% 30.1%
65 - 85+ 4.9°~ 4.9% 6.1% 8.3% 8. 1%
100.0% 100,0% 100.0% 100.0% 100.0%
Median Age 29.9 25.8 27.0 32.6 28.2
Male 29.4 25.5 26.3 31.3 27.5
Female 30.3 26.1 27.8 33.8 28.9
Source: AGAJANIAN & Associates, Urban Ik. cision Systems, 1990 U.S. Census
Rancho Cucamonga Commercial Land Uae and Market Study
AGAJANIAN & Associates
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 reflects their income. Rancho
Cucamonga has 65.0% of its labor force in white collar occupations, compared to
56.7% for subregion. The highest concentrations of the city's labor force are 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 umts also parallel the population trends. Rancho Cucamonga is currently
occupying 3.10 persons per dwelling unit 1995. 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
predominan~y single family home commumty, though 24.0% of stock is multifamily.
These population and housing conditions and trends reveal that:
The long 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 Bernardino and Riverside Counties. As depicted
Ranch Cucamonga Commercial Land Use and Market Study
AGAJANIAN &Associates ] 3
Table 5: 1995 Annual Household Incomet Profdes by City
Annual Household Income
Rancho
Cucamonfa Fontana Ontario Upland
Subre,ion
Less than $5,000 - $24,999 18.5% 26.6% 27.6% 24.4% 24.3%
$25,000 - $49,999 27.8% 33.8% 33.9°/0 28.2% 31.2%
$50,000 - $99,999 41.3°.4 34.7% 32.5% 32.5°.4 35.5°.4
$100,000 - over $150,000 12.4°.4 4.9% 6.0% 14.9°.4 9.0°.4
Total 100.0% 100.0% 100.0°/0 100.0°.4 100.0%
Median household income $53,087 $41,841 $40,892 $47,443
Average household income $60,175 $43,157 $44,190 $62,300
] Avera~emc~mei~theaverage~f~h~useh~dincc~M~i~anmc~meistheinc~me~f~hemidd~eh~useh~d~
Source: AGAJANIAN & Auociatet, Urlamn Decision Syst, m~ 1990 U,S. Census
$45,501
$51,645
Table 6: Subregional Occupation of Residents of City
Ranch
Occupation Cucamonfa Fontana Ontario Uoland
Sabref ion
Managerial/Executive 17.2% 9.2% 10.2% 17.1% 13.2%
Professional 12.7% 8.4% 8.1% 15.1% 10.7%
Technical 3.3% 3.2% 2.6% 3.3% 3.0%
Clerical 17.5% 18.2% 16.5% 17.3% 17.3%
Sales 14.3% 10.4% 10.9% 14.9% 12.5%
Total White Collar 65.0% 49.4% 48_3% 67.7% 56.7%
Craftsmen 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%
Laborers 3.0°.4 5.90.4 6.0% 3.5% 4.70/0
Farming, Foreshy, Fishing 0.7% 1.5% 2.90/0 13% 1.7%o
Total Blue Collar 3~0% ~0.6% 51.7% 323% 433%
Subregiomd Total 100.0% 100.0%
Source: AGAJANIAN & Associates, Urban Decision Syst~m~ 1990 U.S, Census
Rancho Cucamonga Commercial Land Use and Market Study
AGAJANIAN & Associates
100.0% 100.0'/0 100.0%
14
Table 7: Subregional Total Residential Units by City
city 1980 1985 1990'
Rancho Cucamonga 17,839 22, 190 36,368
Fontaria 13,940 18, 122 29,300
Ontario 31,339 36,221 42,620
Upland 18,595 20,924 24,480
Subregional Total' 81,713 97,457 132,768
1990U. S. Cemus
Source: AGAJANIAN & Auocimtet. State ofCalifornh Dep~rtment of F|nmnce
1991 1992 1993 1994 1995
37,497 38,114 38,410 38,852 39,368
30,411 31,260 31,831 32,300 32,619
42,897 43,258 43,510 43,940 44,133
24,633 24.765 24.828 24,862 24.884
135,438 137,397 138,579 139,594 141,004
Table 8: Subregional Single Family Dwellings
City 1980 1985 1990~ 1991 1992 1993 1994 1995
Rancho Cucamonga 15,425 17,922 24,439 27,445 27,773 28,062 28,428 28,877
Fontaria 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 14.052 15,674 15.742 15.803 15.837 15,859
Subregional Total 60,697 69,336 84,706 93,407 94,698 95,580 96,774 116,143
I 1990 U.S. Cemus
Source: AGAJANIAN & Associates, Slate of California Department of Finance
Table 9: Sub regional Multi-Family Dwellings by City
city 1980 1985 1990~ 1991 1992 1993 1994 1995
Rancho Cucamonga 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
Upland 6~026 6~544 8,490 8~100 8~164 8~166 8,166 8.166
Subregional Total 17,402 23,767 39,090 36,627 37,306 37,384 37,855 38,005
I1990U.S. Cer~m
Source: AGAJANIAN & Azieciatts, State of California Department of Finance Estimates
Rancho Cucamonga Commercial Land Use and Market Study
AGAJANIAN & Associates ] 5
)6
m 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 Sectors*
4.0%
Table ll:
IndusWv
Proffie of Industries Employing Residents by Cily
Rancho
CucamonRa Fontaria
Ontario Unland Subregion
Commercial Industry
Retail Trade 16.4% 16.8% 17.9% 17.1% 17.1%
Finance, Insurance, Real Estate 7.8% 5.0% 5.7% 8.4% 6.6%
Business/Repair Services 5.2% 5.7% 5.6% 5.3% 5.5%
Personal Services 2.4% 2.3% 2.4% 2.9% 2.5%
Entertainment & Recreation 1.1% 1.2% 1.2% 1.1% 1.2%
Professional & Related Services 19.6% 17.3% 15.9% 24.0% 18.7%
Public Adminislration 5.5% 4.7% 3.2% 4.4% 4.4%
Subtotal 58.0% 53.0% Sl .9% 63.2% 5~0%
Non-Commercial Industry
Agriculture 1.3% 1.7°/o 3,5% 2.0% 2.2%
Construction 8.8% 9.8% 8.9% 6.5% 8.6%
Manufacturing 18.2% 20.7% 23.0% 16.5% 20.0%
Other 13.7°/b 14.8% 12.7°,~ 11.8% 13.2%
Subtotal 42.0% 47.0% 48.1% 36.8% 44.0%
Subregional Total 100.0% 100.0%
Source: AGAJANIAN & Associates, Urban Decision Systems, 1990 U.S. Census
100.0% 100.0% 100.0%
Rancho Cucamoag$ Commercial Land Use and Mari~ Study
AGAJANIAN & Asaociate$ ] 7
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 license 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 Reported 1994 Gross Receipts in the City byBusinets Type
~ ~Land - 65.g%
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 from 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.
Rancho Cucamonga Commercial [and Use and Market Study
AGAJANIAN & Auodates
20
Figure 5: Retail Sales Capture Rate Trends by City
.- Up/and
Fontana
Rancho Cucamonga
~ ..............................................................................................................................................................................................................................
0
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 Cucarnonga 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%).
Per capita retail sales capture rate also reveal the dimensions of retail sales leakage in
Rancho Cucamonga. After dividing taxable retail sales for Rancho Cucarnonga and the
subregion as a whole by their respective populations (from Table 1 ) the mount of per
capita retail expenditure can be estimated at $5,247.78 for the subregion and $3,707.24
for Rancho Cucamonga. This gap represents a total taxable retail sales leakage of
$241,688,000 for Rancho Cucamonga in 1994. Of this amount, the estimated leakage
from retail stores is $174,635,000.
The sources of the sales leakage m Rancho Cucamonga is further defined by
considering the concentration 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 Bemardino 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
Rancho Cucamonga Commercial Land Use and Markit Study
AGAJA.NIAN &Associates 2 1
C"i C'4~ ('4 C'4 ~rr) ~ C'4("4 ,-, ~4 ~ **4
22
category. A value below 1.0 indicates that the city is capturing less than its relative
share of the total subregional retail sales for that category. Conversely, a value above
1.0 indicates that the city is capturing more than its relative share of the total
subregional retail sales for that category.
Table 15 indicates that Rancho Cucamonga is capturing less than its share of
subregional market area sales in every retail category except apparel (1.18), general
merchandise (1.43), drug stores (1.06) and food stores (1.03). The greatest leakage in
Rancho Cucamonga is occurring in the auto dealers and auto supplies, home
furnishings, building materials and service station categories. Comparison of the city's
retail sales capture rate to both the subregional market area and San Bernardino Cotmty
appear roughly equivalent, suggesting that the subregional market area closely mirrors
the retail expenditure patterns within the county as a whole.
These employment, economic and retail sales conditions and trends reveal that:
County employment is growing though at a much dower 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 services 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 amount 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).
Rsnclm Cucsmongs Csnmt~tsl LsM Use sml Msri~t Study
AGAJANIAN & Associstts 23
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 land and b) existing commercial development on industrially and
residentially zoned land. On commercially zoned land, the table identifies the existing
commercial uses, undeveloped commercially zoned land, and commercially zoned land
which ks presently developed with either industrial or residential uses (and is considered
unavailable for commercial developmen0. The table also inventories commercial
development which is located on residentially and industrially zoned land.
The table provides a summary of commercial land uses by type, mount and location.
Several sources of Ionnation were used to prepare the commercial land inventory
including City staff, field reconnaissance, 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 dkscussed below.
Commercial Subarea Definitions
The City of Rancho Cucamenga 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 direction. This area is comprised predominantly of the Terra Vista
Planned Commumty 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.
Ranelm Cueamenga Commen:ial Land Use and Market Study
AGAJANIAN & Assettales
Map 2: Rancho Cucamonga Subareas
\
f
Rmncho Cmmcmmmmgm Commeremml Lmnd Ume rand Mmrket Stady
AGAJANIAN & Ammocimk. m
Subarea 4 - The area botmded by the City limits on the west, Hermosa Avenue on the
east, 4th Sweet on the south and including both sides of Arrow Route on the north.
This subarea contains the industrial acreage adjacent to 4th Street and Archibald
Avenue currently proposed for residential zoning.
'Subarea 5 - The area bounded by 4th Street on the south, Arrow Route on the north,
Hermosa Avenue on the west and Clevcland Avenue on the cast. 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 commercial
dislxict 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 development 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 currently 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 inventoried within each of the
eight subareas. Sites evaluated 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 potential. 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 categorized according to the following commercial use classifications:
Neighborhood Retail - Developed or approved retail commercial centers from 5
acres to 15 acres in size which predominantly serve the needs of surrounding
residential areas and are anchored by a supermarket or a combination of supermarket/
chug store or another neighborhood serving retail use.
Community Retail - Developed or approved retail commercial centers from 15-40
acres in size which serve the needs of the city-wide market area with retail uses such
as off-price stores, home improvement stores, theaters, and restaurants. Representative
Ran~ho Cucamonga Cemmerclal Land Use and Markit Study
AGAJANIAN & .Aaseciates 27
community commercial retail centers include Tcrra Vista Center and the Foothill
Marketplace Center.
Regional Retail - Developed or approved retail commercial centers 40 acres and up
in size which serve the needs of a regional market area and include major department
stores and nationally and/or internationally recognized specialty retail stores.
Representative regional commercial centers include the proposed Victoria Gardens
Mall.
Commerciah Recreational - Developed or approved public recreational areas which
charge admission such as the Epicenter Stadium and the planned golf course within the
General Dynamics Specific Plan area.
Office - Developed or approved professional and medical office uses such as the office
complex located in Terra Vista and the scattered professional office sites located
throughout the City. Medical offices can include in-patient and out-patient centers,
clinics and doctors offices.
Lodging - Developed or approved hotels and motels.
Other Commercial - Developed or approved commercial land uses which do not fit
into any 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
land in Rancho Cucamonga, of which 414 acres are presen~y developed with
commercial uses, 61 acres are developed with industrial or residential uses, and 1,002
acres are undeveloped. The bulk of this commercially developed land is in the Foothill
Boulevard corridor (Subareas 1, 2 and 3), accounting for 307 acres of the 414
developed acres. About 1,002 acres of commercially zoned land are currently
undeveloped. This represents about 67.8% of all commercially zoned land in the city.
Part B of Table 16 indicates that 170 acres of commercial uses are developed on
industrially zoned land, mostly in Subarea 5. Similarly, 184 acres of commercial uses
are developed on residentially zoned land, most of which is accounted for by the 135
acre golf course in Subarea 7.
The amount of land developed with commercial uses in Rancho Cucamonga is 768
acres. This includes the 4 14 acres of development on commercially zoned land, 170
acres of commercial development on industrially zoned land and 184 acres of
commercial development on residentially zoned land.
Rancho Cucsmonga Commercial Land Use and Market Study
AGAJANIAN & Associates
Table 16: Rancho Cucamonga Commercial Land Use Inventory
I 2 3
Subarea
4 5 6
A. Within Commercial Zones
Developed Acres
Regional Retail .....
Cominunity Retail - 55 48 - -
Neighborhood Retail 96 ....
Office I0 20 - 30 -
Comm/Rec 4 8 - - -
Lodging I ....
Other Commercial 20 - 45 - -
7 8 Total
- - 103
70 - 166
7 - 67
- - 12
- - 1
- - 65
Subtotal Developed 131
Undeveloped Acres 64
Unavailable Acre
Developed Residential 1 g
Developed Industrial -
83 93 30 - - 77 - 414
136 328 10 32 298 40 94 1,002
...... lg
3 - 40 - - - 43
Subtotal Unavailable
18 - 3 - 40 - - - 61
Total Commercially Zoned
B. Commercial Development Within Other Zones
1,477
Industrial Zones
Neighborhood Retail .... 30 - - - 30
Office - - g - g0 5 - - 93
Comm/Rec - 46 ...... 46
Lodging - I ...... I
Subtotal Industrial Zones - 47 8 - 110 5 - - 170
ResidentialZones
NeighborhoodRetail 14 - - 35 .... 49
Comm/Rec ...... 135 - 135
SubtoM Residential Zones 14 - - 35 - - 135 - 184
Total All Conunerchtlly Zoned
and Developed Acreage
Source: AGAJANIAN & Associates, City of Rancho Cucamonga
Rancho Cucamonga Commercial Land Use and Market Study
AGAJANIAN &Associates 29
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.
Raneho Cucamonga has a large mount 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 concern 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, Special Funds, Redevelopment Agency (RDA), and the Fire District.
The most important component is the General Fund because it is the largest piece of
the budget and because it contains discretionary 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
aim limited as to the types of services provided. Though there is frequent transferring
ofmomes between the General Fund and these other budget components, the General
Fund remains 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
development are assumed to be self-balancing in nature, requiting mitigation of capital
impacts by the landowner prior to project approval.
Rancho Cucamongm Carominertial Land Uae and Market .Study
AGAJANIAN & Am~4att, 30
Table 17: Per Acre Assumptions for New Commercial Development by Land Use
Neighborhood Community Regional
Retail Retail Rettil
~al
Ration
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 $201,254 $176,527 $72,419 $1,633,500
Assessed Valuation $1,555,092 $1,803,384 $2,038,608 $1,685,772 $1,001,880 $1,121,670 $1,372,140
Room Reciepts $328,500
Some: AGAJANIAN & Associates
Table 18: Annual Revenue and Service Cost Assumptions
Municipal Revenues
Property Tax
Retail Sales Tax
Utility Users Fee
Transient Oct. Tax
Franchise Tax(G&E)
Franchise Tax (Refuse)
Bus. License Tax
Veh. FinesXPkg, Cit
2.83%of 1% of AV
1%of Retail Sales
$35.96XEmployee
10%of Room Receipts
$7.74XEmployee
$17.44XEmployee
$21.46XEmployee
$1.22XEmployee
RDA Tax Incremcnt
39%of 1% of AV
Source: AGAJANIAN & Associates
Municipal Service Costs
General Oovemment
Fire Protection
Police Protection
Community Dcv.
Engineering
Public Works
Business License
$43.88XEmpioyee
$43.22xEmployee
$59.38XEmployee
$17.83XEmployee
$ ! 9.02XEmployee
$21.29~Employee
$3.19\Employee
Rancho Cucamonga Commercial Land Use and Market Study
AGAJANZAN &Associates 3 ]
Rancho Cucamonga Commercial Land Use and Market Study
AGAJANIAN & Aseoc~at~s
Rancho Cucamonga Commercial Land Use and Market Study
AGAJANIAN & Auedates 3 3
For the purposes of this study it will be necessary to determine the net fiscal impact
associated with the fijO__.'e 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 commercial
development. These assumptions were based upon the analysis of the city budget for
the 1994-1995 fiscal year, the commercial land use inventory, and related studies
discussing fiscal impacts in Rancho Cucarnonga. 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 considerably 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 commercial 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 restfiB indicate that all commercial uses are net positive generators of revenues to
the 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, commercial land uses also generate revenues from property
taxes, utility users fees, franchise 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.
Rancho Cucamoega Con~merdml Land Use and Market Study
AGAJANIAN & ~4~o~iaies 34
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. O0 in municipal service costs.
Commercial development in the RDA project area have better fiscal impacts
than commercial development outside of the RDA project area.
Rancho Cucamonga Commer~rlal Land UN and Market Study
AGAJANIAN & A.uociates
III. MARKET DEMAND ESTIMATES
The potential for commercial development in Rancho Cucamonga will be largely
defined by the amount and type of conunercial 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 mount of subregional
coramercial 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 mount 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 mount 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, commumty 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 projections. 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,
Rancho Cucamonga Commercial Land Uat and Market Study
AGAJANIAN & Anoclatt~ 36
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 mostly in northern Rancho
Cucamonga and northern Fontaria. Thus, the future of residential growth will be along
the foothills in Rancho Cucamonga and Fontana.
Table 2h Subregional Dwelling Unit Comparison~
Raacho
Cucamomza Fontaria Ontario Uvland 8ubregio~
Exisling DU - 19952 39,368 32,619 44, 133 24,884
Projected Build Out 57,000' 65,000' 43,654' 25,758~
Net Change 17,632 32,381 (479) 874'
$maxms: !) AGAJANIAN & AsMdalm,
4)Ci/ydFsmm1990C, mmdPtm
6) CilydUphmdprslmml1995CymrdPhmUpdsU
141,004
186,412
45,887
Table 22: Subregional Population Comparison
Rancho
Cucamon~ Fontaria Outado Upland Sub~e~io~
Existing 1995 117,903 105,240 145,743 67,875 436,761
Net Change DUs 17,632 32,381 0 874 50,887
Populationa)U 3.0 3.5 3.4 2.8 3.3
Projected Growth 52,896 113,333 0 2,447 168,676
Projected Buildout 170,999 218,573 145,743 70,322 605,437
Sin'u: AGAJANIAN & Assotiale,, Stale d Csagm Departre! d Flmmu
The subregional du growth is convened to population growth projections in Table 22.
The table indicates that Rancbo Cucamonga 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 depicted 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 growth 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 person, would
help support new retail store development. The remainder, $414,899,000 at $2,459.74
Randso Cucantonga Commercial Land Use and Market Study
AGAJAN1AN & Associatt~ 37
per person, would help support non-store ou~ets 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 the amount of developed land that could be supported by
these new subregional expenditures. The estimates for the neighborhood retail,
commumty retail, regional retail, and some of the "other" retail are based solely upon
egqxaxtitures 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 char-,u~-ristic 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.
Figur~ 6: Shart of Buildout Population
72.1%
27.9%
Based upon the analysis, there is an estimated subregional demand for 1,670 acres of
conunercial development. As depicted in Figure 7, this land use demand 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.
Ran~ho Cueamong.. Cramre'hi Lind UR ..rid M..rket Study
AGAJANIAN & Aamg'bm
o~ooo~oooo~ o - ~
00000000000
O0000OO0000
Figure 7: Subregional Commercial Land Demand to Buildout
Total Demand/ ~ 155 Acr~
1,670 Acres Commi~itY
· Regional
C~
934 Aca~
~ Commercial
Rccrcafional
llgAcrcs
Other
Commercial
108 Acres
155 Acrcs
The share of this future demand for commercial uses which locates in Rancho
C~ga 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 insure that Rancho Cucamonga will
capture all locally supported neighborhood retail 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 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 Cucarnonga will have to be
competitively am'acted to the city.
Rancho Cucamonga Commerdal Land Use and Market Study
AGAjANIAN & Associates 40
Figure 8: Subregional Commercial Land Supply by City
i~~~~Total Commercial
Land in Subregion
5,742 Acres
Onlario
2,276 An'm
Smm~ AGAJAmANiIAalo~ilat
Rmncho Cucmmonga Commerdml Lmad Ume mmN:l Market Study
AGAJANIAN & Aromaelates 4 ]
IV. AVAILABLE COMMERCIAL SITES
Competitive factors will determine where new commemial demand will locate m the
subregional are,~ Depending upon the specific use, factors of site size, cost, visibility,
accessibility and safety will force commercial developers to the most competitive sites.
This Section examines the commercial land supply to assess the potential for
commercial sites in Rancho Cucamonga.
A. SUBREGIONAL COMMERCIAL LAND SUPPLY
The results of the subregional commercial land inventory are presented on Table 24.
The table indicates that there is approximately 5,742 acres of commemially zoned land
in subregion, with about 40% of the acreage located in the City of Ontario. By
comparison, Rancho Cucarnonga has set aside 1,477 acres, about 26% of the total
subregional supply. Similarly, Fontana has about 22% and Upland about 12% of the
total subregional supply of commercial land.
The subregional supply of developed commercial land is about 2,630 acres. Rancho
Cucamonga has about 475 developed commercially zoned acres, 414 with commercial
uses and 61 acres of non-commemial uses (see Table 16). There are an estimated 354
acres of commercial uses on non-commercially zoned properties in the city. All told,
Rancho Cucarnonga has 768 acres of existing commercial uses.
Rancho Ctr. amonga has a developed acres/1,000 population ratio of 6.5, compared to
the subregional ratio of 6.7. Upland has the highest ratio with 8.2 acres of commercial
land per 1,000 population while Ontario and Fontana have ratios of 6.9 and 5,7
respectively.
By subtracting the developed commercial land from the total land set aside for
commemial uses it can be determined that about 3,112 acres of undeveloped
Rancho Cu.mm~ga Commercial I.~nd Ue and Marlat Study
ACAJANIAN &Associates 42
Map 3: Generalized Location of Commercial Areas
~,m~: AGAJANIAN & ,A~mw:i~Uw
Ran~ho Cum~mmongm Cmmmem~ial Lmnd Ume rand Market Study
commercially zoned land is now available in the subregion. Rancho Cucamonga 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. Fontana has 21% of the total supply
while Upland has the least at 5%.
Table 24: Subregional Commercial Land Use Comparison~
Rancho
Cucamonv. a Fontaria* Ontarios Unland' Subre, ion
Developed ~al Acreage
Build Out ~cial .Acreage
475aa 600 998 557 2,630
1.477' 1,265 2.276 724 5.742
Net Change 1,002' 665 1,278 167 3,112
a) Includes all developed cc,ranemally zoned acreage. D~es not include 354 acres of commercial development in nee-commercial zones.
b) Undeveloped c~n~rcially-za~d ~ only.
I) AGAJANIAN & Maodale,
2) City ofRancho Cu~amonga GI$ Information July 24, 1995
3) City of Raneho Cmmonga 19~9 C, eneral Plan
4) City of Footaria Fiscal lmlmct Arialye, 1/13/92
5) City of On*ario 1992 Gaseral Plan
6) City of Upland pnpostd 1995 General Plan UpdaU
This inventory of commercial land supply in the subregion reveals that:
· There is a ~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 Cucamonga 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 4. 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
Randso Cmscamonga Caninereid Land IJ~e and Market Study
AGAJANIAN & Asaoclate, , 44
city has a high degree of flexibility for accommodating such uses at these commercial
sites.
Table 25: Potential Sites Available
a. Vacant Commercial Zoned Land 5 Acres
Subarea
1 - NC
2 - CC/Ofike
3 - RC/Office/CC
4 - NC
5 - NC
6 - CC/CR/Ofilce
7 - NC
8 - RC
Subtolal - (a)
Subtotal - Co)
Total Acre Available
aCornmenial D~ignatiolu
b. Vacant Non-Commercial Zoned Land 5 Acres+
Acreage Location
64 Industrial:
136 S. Foothl!i/N. Arrow E. of Haven
328 Archibald Frontage
10 4th Street Frontage
32 Haven Corridor
298 Efiwanda
40 Residential:
94 Church
1,002 Snbtotal - (b.)
712
1,714
GNC = Neighborimod, CC = CommunRy, RC - Regional)
Source: AGAJANIAN & Aamciatex, Urban [kcision Systems
Acvea~e
438
30
65
139
25
15
712
Pan B of Table 25 identifies all of the potential acreage that can be converted to
commercial uses by virtue of their location, rezone applications, and planning
consideration. These potential commercial sites amount to 712 acres. The largest
potential area for new commercial land, at 438 acres, is on the south side of Foothill
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 Cucamonga has 1,002 acres of currently 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 pencLing action in Rancho Cucamonga.
None but Home Depot project is active at this time. Other commercial projects in the
Rancho Cucamonga Comsnercial Land Use and Masltt Study
AGAJANIAN & Associates
city have recently been completed including the Price Club, Wal Mart, Best Buy and
Home Express stores.
Table 26: Potential New Commercial Development in Rancho Cucamonga
Project/Location Sub Area Size
Status
1. CatholicChurd~. Sideof Foothill, 3 15 A~r~s
East of 1-15
2. C_~menlDynami~a/N. Sid~of4th 6 318.axr~
StroP, W~t of Millik~n
3. Vi~aG~ofI-15, N~ 3 131 ~m
ofHi~ Blv&
4. T~ V~W ~ F~II & 2 50 ~
R~ - H~ ~
5. M~i ~j~SW ~ F~II & 2 24 ~
R~
6. S~'s ~W ~ F~Ii & I 9 ~
V~y~
7. Mi~i~ ~j~. Si~ of4~ S~ 6 30 ~
E. of Mili~
Zone change approved, gofft~une
Approv~d Genta~ Plan amendrama,
zone change and CUP
Zon~ Chang~ pending
Approved, no activity
Zone Change pending
Sources: AGAJANIAN & A.uociates, C'~ity of Rancho Cueamonga
Competitive commercial projects in the subregion are identified below:
i. City of Ontario
Recently approved major commercial projects and commercial zone change
applications pending in the City of Ontario include:
a. Ontario Mill.~ Factory Outlet project located on the south side of 4th Street, adjacent
tothe 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
conmaen:ial 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
I-10 freeway east of Haven Avenue and west of Milliken. (See Map 4)
Rancho Cucamonga Commercial Land Use and Market Study
AGAJANIAN & Auoeiate~ 46
c. Guasti Specific Plan was recen~y approved by the City of Ontario and includes
approximately 64 acres of retail, office and hotel uses. Development of the site has
not yet commenced.
d. The Sphere of Influence for the City of Ontario was recently mended to include
approximately 8,500 acres of agricultural 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 Fontaria include:
a. Sierra 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 commercial and office uses and a 160 acre public golf course.
Construction 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 Beech Avenue and Highland
Avenue was recently 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 I- 15 and Summit
Avenue is a Specific Plan proposal currently being reviewed by the City. The proposed
project includes approximately 337 acres of business park, mixed use and commercial
uses.
iii. County of San Bemardino
a. The County has recently approved a major motor speedway on 500 acres in the
unincorporated County area adjacent to the cities of Fontana and Rancho Cucamonga.
The project is located at the former Kaiser Steel site and is scheduled to commence
cons~on within the near 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 lime. 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.
Rsnclm Cucsmongs Cmnmevdsl Lsnd Use snd Msrket Study
AGAJANIAN & Assecistes 4 7
A review of the planned commercial projects in the subregion reveal that:
· R~cho Cucamonga is developing commercial properties along Foothill Boulcvard
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 demand within the subregional
area.
® The Lewis Homes project of 100 acres in Ontario is also a potential competitive
problem if it develops ahead 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. COMPETITIVE ADVANTAGESXDISADVANTAGES 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 of Rancho Cucamonga and Fontana (See
Map 4). The next phase of rapid residential development will create new retail
opportunities 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 I-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
Cucamonga. The 4th Street onXoff 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 onXoff 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 opportumty 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 fleeway significant for commercial
development since most of the commercial sites along the proposed route in Rancho
R~ncho Cucamenga Commercial Land Use and Market Stud~
AGAJANIAN & .s,.ssodatm 48
Cueamonga are already developed and serving the trade area. Attention should instead
bc focussed at sites along the Day Creek onXoff ramp of Highway 30 as a location to
capture commumty lcvcl retail trade from northcrn Fontana.
The city has ample amounts of undeveloped commercial land in nearly all subareas (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 demand growth.
Ample land can also b~ considered a disadvantage since an excess supply of
commercial land, above that needed to support actual demand, will tend to erede land
prices. This excess supply ofundcvel~ conuncrcial 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 little new demand to support commercial development. The city is
cornpetitively disadvantaged by a surplus of commercial sites which have the potential
to disperse future commercial development to lower cost sites and diminish the
potential synergy from commercial uses locating near each other. Without some ability
to direct major commcreial development projects toward specified nodes the city stands
the risk of reducing its subregional commercial compctitiveness.
Rancho Cucamonga also has other competitive disadvantages. One important
disadvantage is its small share of current retail sales capture by the city. This small
share indicates that Rancho Cucamonga 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 attract new stores to areas with
smaller concentrations of stores. This locational preference is advantageous 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 Cucamonga 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 Mills 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:
Rancho Cucamoaga Committal had Use and Mark~ Study
AGAJANIAN & Associates
· The single greatest advantage for city commercial sites is their proximity to the
subregional growth area along the foothills of Rancho Cucamonga and Fontana.
The 1-15 corridor 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\offramp.
· The city has ample amounts of undeveloped commercial land in nearly all subareas.
· Although Rancho Cucamonga has successfully increased its share of subregional
retail sales since 1980, the city is still competitively disadvantaged with its low
relative share of subregional retail sales capture. This disadvantage will tend to
make commercial sites in the city less attractive for new subregional uses 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 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 attractors 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
commercial uses, competitive uses, complementary uses, and the use of synergy among
the commercial uses to attract development to the city.
Rsncho Cucsmongs Commercial Land Use end Market Study
AGAJANIAN &Associates 5 ]
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 Cucamonga commercial 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 land 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 defined 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
Rancho Cucamonga Commercial L~nd Use and Markit Study
AGAJANIAN &Associates 5 2
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 contribute about $12,778,900 annually, well above their current
estimated mount 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 Competitiveness
The degree of market competitivcness is somewhat arbitrary when dealing with general
areas instead of specific sites. However, it is possible to express the amount of
subregional capture implied by the scenario and whether this share of capture appears
reasonable or unreasonable.
Lower capture rates are less competitive because there is local commercial demand to
support some local commercial development. For example, commercial development
which can capture any share of the city's current retail sales leakage can be supported.
Similarly, neighborhood retail centers can be supported with local population growth.
Subregional competition increases for community and regional level retail uses,
commercial 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 locate 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 reflect the amount of competitiveness needed
to attract 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 considered generally feasible and reasonable.
iii. Site Availability
The basic criteria to measure land availability is the number of acres available for
cornrnemal development. As demonstrated in Section 2.C, there is more undeveloped
land than can be supported. Consequently, 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.
lisncho Cucsnmmsgs C~ms~Rn:tsl land UR stud Mss'{~ ~,udy
AGAJANIAN & ~lts 5 3
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 commercial development expected to
occur in the city by the time that the city reaches its planned 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 are a number otissues that need to be addressed in this commercial land use and
market study. Each is described below.
i. Capturing Retail Sales Leakage
This scenario is concemed 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
Cucarnonga will come t~om 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 Cucarnonga,
this means about 140 acres of development. What would the scenario performance be
if Rancho Cucamonga captured all of the 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 determine the upper bounds for fiscal impacts and site 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 from new household
expenditures in the city. In addition to 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
Rancho Cucamonga Commercial Land Us~ and Market Study
AGAJAN1AN & A.m~istes 54
scenario performance be if Rancho Cucamonga captured its share of all future
commercial demand based upon its share of subregional population growth to
buildout?
v. Capturing Site Availability Share of Demand
If 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 General Fund revenues, about 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 revenues at buildout. What would the scenario
performance be if Rancho Cucamonga captured enough commercial development to
maintain the current share of commercially generated General Fund revenues?
vii. Capturing Share of Buildout Population
This scenario captures enough from future commercial demand to bring the share of
commercial development in Rancho Cucamonga 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?
Rsncho Cucsmong$ Commercial Land Use snd Marital $tudy
AGAJANIAN & Associstts 55
Table 27: Scenario Measures and Targets
Fiscal Impact Measure
Market Capture Measure
Current 28.8% share of G-cncral
Fund rcvcnues 8cncrated by
commercial land uses in the city.
The share of the 1,670 acres of
commercial subregional demand
captured by the city.
Fiscal Impact Target
Maintain (break even) or improve
upon thc current share of
commercially generated GF
reVenUeS.
Source: AGAJANIAN & Aqsociates
Market Capture TargeLs
Capture the existin8 retail sales
leakage, about 132 acres.
Capture the portion of
commercial demand supported by
local population growth, about
140 acres.
Capture all 1,670 acres of the
subregional commercial demand.
Capture 31.4% of the subregional
demand based on the city's share
of the subregional population
growth, about 524 acres.
Site Availability Measure
The share of the 1,002 acres of
cutren~y undeveloped commcmial
land in the city developed by
buildout.
Site Availability TargeLs
Capture 32.2% of the subregional
demand based on the city's share of
undeveloped commercial land,
about 538 acres.
Capture 28.2% of the subregional
demand based on the city's share of
buildout popuhtion, about 471
acres.
Randto Cucamonga Cmnm'eml land Use and Market Study
AGAJANIAN &Associates 0 56
Table 28: Scenario Performance - Capturing Retail Sales Leakage
Neig. Community Regional Commercial
Retail Retail Retail Office Recreation
New Comm. Development
27 34 41 0 0
A. Land Availability Measures
Available Land (Ac.) 146 762 422 762 298
Potential Land (At.) 146 1,255 487 1,339 736
% of Avail. Land Used 18% 4% 10% 0% 0%
B. Market Risk Measures
Potential from Leakage (Ac.) 27 34 41 0 0
Minimum Market Capture (At.) 49 52 0 0 0
Total Subregional Demand (Ac. 155 164 134 934 118
% of Total Market Capture 0% 0% 0% 0% 0%
C. Fiscal Impact Measures
Net Fiscal Impact: above\(below) current GF revenues of $8,162,400
Net Fiscal Impact: above\(below) the buildout Break Even Point, estimated at $11,852,600
Net Fiscal Impact: total estimated GF revenues from commercial uses at buildout.
% ofBuildout Gen. Fund Revenues, currently at 28.8%.
% AboveBelow Break Even Point
Source: AGAJANIAN & Associates
Lodgings
0
762
1,339
0%
0
5
57
0%
762
1,339
4%
30
34
108
-0%
Total
~al
132
1,002
1,714
13%
132
140
1,670
0%
$I ,975,700
($2,640,800)
$9,211,800
22.4%
-6.4%
Rancho Cucamongs Cornmenial Land Use and Marlrot Study
AGA. IANIAN & Associat, s 57
Table 29: Scenario Performance - Capturing Minimum Market Demand
Neig Community R~gional Commercial
Retail Retail Retail Office Recreation
New Comm. Development
49 52 0 0 0
toddrigs
5
A. Land Availability Measures
Available Land (Ac.) 146 762 422 762 298 762
Potential Land (Ac.) 146 1,255 487 1,339 736 1,339
% of Avail. Land Used 34% 7% 0% 0% 0% 1%
B. Market Risk Measures
Potential from Leakage (At.) 27 34 41 0 0 0
Minimum Market Capture (Ac.) 49 52 0 0 0 5
Total Subregional Demand (Ac. 155 164 134 934 118 57
% of Total Market Capture 32'/0 32'/. 0% 0% 0% 9%
C. Fiscal Impact Measures
Net Fiscal Impact: above\(below) current GF revenues of $8,162,400
Net Fiscal Impact: above\Coelow) the buildout Break Even Point, estimated at $11,852,600
Net Fiscal Impact: total estimated GF revenues from commercial uses at buildout.
% ofBuildout Gen. Fund Revenues, currently at 28.8%.
% AboveBelow Break Even Point
Source: AGAJANIAN & Associates
762
1,339
4%
30
34
108
31%
Tolal
~al
140
1,002
1,714
14%
132
140
1,670
8%
$1,937,761
($2,678,739)
$9,173,861
22.3%
-6.5%
Rancho Cucamonga Commercial Land Use and Market Study
AGAJAN!AN & Associates 58
Table 30: Scenario Performance - Capturing Maximum Market Demand
Neig. Community Regional Commercial
Retail Retail Retail Ol~ce Recreation
New Comm. Development
155 164 134 934 118
Lodging
57
A. Land Availability Measures
Available Land (Ac.) 146 762 422 762 298 762
Potential Land (Ac.) 146 1,255 487 1,339 736 1,339
% of Avail. Land Used 106% 22% 32% 123% 40% 7%
B. Market Risk Measures
Potential from Leakage (Ac.) 27 34 41 0 0 0
Minimum Market Capture (Ac.) 49 52 0 0 0 5
Total Subregional Demand (Ac. 155 164 134 934 118 57
% of Total Market Capture 100% 100% 100% 100% 100% 99%
C. Fiscal Impact Measures
Net Fiscal Impact: above\(below) current GF revenues of $8,162,400
Net Fiscal Impact: above\(below) the buildout Break Even Point, estimated at $11,852,600
Net Fiscal hnpact: total estimated GF revenues from commercial uses at buildout.
% ofBuildout Gen. Fund Revenues, currently at 28.8%.
% AboveXBelow Break Even Point
Source: AGAJANIAN & Aaso~iates
108
762
1,339
14%
30
34
108
100%
Total
1,670
1,002
1,714
167%
132
140
1,670
100%
$16,245,236
$11,628,736
$23,481,336
57.1%
28.3%
Ratache Cucamonga Commercial Land Uae and Marl~t Study
AGAJANIAN &Associates 59
Table 31: Scenario Performance - Capturing Population Growth Demand
Neig. Community Regional Commercial
Retail Retail Retail Oftice Recreation
New Comm. Development
49 51 42 293 37
Lodging
18
A. Land Availability Measures
Available Land (Ac.) 146 762 422 762 298 762
Potential Land (At.) 146 1,255 487 1,339 736 1,339
% of Avail. Land Used 34% 7% 10% 38% 12% 2%
B. Market Risk Measures
Potential from Leakage (At.) 27 34 41 0 0 0
Minimum Market Capture (At.) 49 52 0 0 0 5
Total Subregional Demand (Ac. 155 164 134 934 118 57
% of Total Market Capture 32% 31% 31% 31% 31% 31%
C. Fiscal Impact Measures
Net Fiscal Impact: above\(below) current GF revenues of $8,162,400
Net Fiscal Impact: above\(below) the buildout Break Even Point, estimated at $11,852,600
Net Fiscal Impact: total estimated GF revenues from commercial uses at buildout.
% ofBuildout Gen. Fund Revenues, currently at 28.8%.
% Above~Below Break Even Point
Source: AGAJANIAN & Associates
34
762
1,339
4%
30
34
108
31%
Total
Conunercial
524
1,002
1,714
52%
132
140
1,670
31%
$5,098, 106
$481,606
$12,334,206
30.0%
1.2%
Rancho Cucamonga Commercial Land Use and Market Study
AGAJANIAN &Associates 60
Table 32: Scenario Performance - Capturing Site Availability Share
Neig. Community Regional Commercial
Retail Retail Retail Office Recreation
New Comm. Development
50 50 44 303 38
A. Land Availability Measures
Available Land (Ac.) 146 762 422 762 298
Potential Land (Ac.) 146 1,255 487 1,339 736
% of Avail. Land Used 34% 7% 10% 40% 13%
B. Market Risk Measures
Potential from Leakage (Ac.) 27 34 41 0 0
Minimum Market Capture (At.) 49 52 0 0 0
Total Subregional Demand (Ac. 155 164 134 934 118
% of Total Market Capture 32% 30% 33% 32% 32%
C. Fiscal Impact Measures
Net Fiscal Impact: above\Coelow) current GF revenues of $8,162,400
Net Fiscal Impact: above\(below) the buildout Break Even Point, estimated at $11,852,600
Net Fiscal Impact: total estimated GF revenues from commercial uses at buildout.
% ofBuildout Gen. Fund Revenues, currently at 28.8%.
% AboveXBelow Break Even Point
Source: AGAJANIAN & Associates
762
1,339
2%
0
5
57
31%
35
762
1,339
5%
30
34
108
32%
Tolal
Comme~al
538
1,002
1,714
54%
132
140
1,670
$5,208,041
$591,541
$12,444,141
30.2%
1.4%
Rancho Cucamongs Cmnmercial Land Use and Market Study
AGAJANIAN &Associates 6 ]
Table 33: Scenario Performance - Fiscal Break Even
Neig. Community Regional Commercial
Retail Retail Retail Office Rccrcatiot~
New Comm. Development
55 74 40 120 60
A. Land Availability Measures
Available Land (Ac.) 146 762 422 762 298
Potential Land (Ac.) 146 1,255 487 1,339 736
% of Avail. Land Used 38% 10% 9% 16% 20%
B. Market Risk Measures
Potential from Leakage (Ac.) 27 34 41 0 0
Minimum Market Capture (At.) 49 52 0 0 0
Total Subregional Demand (Ac. 155 164 134 934 118
% of Total Market Capture 35% 45% 30% 13% 51%
C. Fiscal Impact Measures
Net Fiscal Impact: above\(below) current GF revenues of $8,162,400
Net Fiscal Impact: above\(below) the buildout Break Even Point, estimated at $11,852,600
Net Fiscal Impact: total estimated GF revenues from commercial uses at buildout.
% ofBuildout Gen. Fund Revenues, currently at 28.8%.
% Above~Below Break Even Point
Source: AGAJANIAN & Associates
~od~ngs
10
762
1,339
1%
0
5
57
17%
6O
762
1,339
8%
30
34
108
55%
Total
Commercial
419
1,002
1,714
42*/0
132
140
1,670
25%
$4,616,707
$207
$11,852,807
28.8%
0.0%
Randso Cucamonga Commercial Land Use sad Market Study
AGAJAN]AN &Associates ' 62
Table 34: Scenario Performance - Share of Buildout Population
Neig. Community Regional Comrnt~al
Retail Retail Retail Office Recreation
New Comm. Development
83 92 75 58 1tl4}
A. Land Availability Measures
Available Land (Ac.) 146 762 422 762 298
Potential Land (Ac.) 146 1,255 487 1,339 736
% of Avail. Land Used 57% 12% 18% 8%
B. Market Risk Measures
Potential from Leakage (Ac.) 27 34 41 0 0
Minimum Market Capture (At.) 49 52 0 0 0
Total Subregional Demand (Ac. 155 164 134 934 118
% of Total Market Capture 53% 56% 56% 6% 85%
C. Fiscal Impact Measures
Net Fiscal Impact: above\(below) current GF revenues of $8,162,400
Net Fiscal Impact: above\Coelow) the buildout Break Even Point, estimated at $11,852,600
Net Fiscal impact: total estimated GF revenues from commercial uses at buildout.
% ofBuildout Gen. Fund Revenues, currently at 28.8%.
% Above~Below Break Even Point
Source: AGAJANIAN & Associates
5
762
1,339
1%
0
5
57
9%'
58
762
1,339
8%
30
34
108
54%
Total
471
1,002
1,714
47%
132
140
1,670
28%
$5,381,139
$764,639
$12,617,239
30.7%
1.9%
Rancho Cucamonga Commercial Land U~e and Market ~tucly
A~AaANt~N & A~o~om 63
VI. FINDINGS
The three performance measures were estimated for each of the 7 scenarios described
in the preceding Section. The performance of each scenario is presented on Tables 28
to 34. A summary of the scenario restfits are presented on Table 35 and the key
findings highlighted below. The implications of these findings from the scenario
analysis for commercial land use policy for Rancho Cucamonga follows the
comparative analysis of scenarios.
Table 35:
Summary of Scenario Performance
% of Land % of Total % (+\-) GF Total Comm.
Scenarios Analyzed Used Mkt Captured Rev. Share Acres Dev.
1. Capturing Retail Sale Leakage 13% 0% -6.4% 132
2. Capturing Minimum Market Demand 14% 8% -6.5% 140
3. Capturing Maximum 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
Source: AGAJANIAN & Associates
Rancho Cucamonga Commercial Land Use arid Market Study
AGAJANIAN & Assre:isles 64
A. COMPARATIVE ANALYSIS OF SCENARIOS
i. Fiscal Performance
Scenarios l (at -6.4%) and 2 (at -6.5%) do not meet the miramum criteria to not erode
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 demand.
The break even point is estimated at 419 acres of new commercial development.
Commercial development above 419 acres produces a positive net increase to the share
of commercially generated General Fund revenues. Caplining 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 demand since this is roughly the city's share of
subregional population growth. Among the scenarios with positive fiscal benefits
which are within this reasonable range of market capture are Scenario 4 (524 acres),
Scenario 7 (471 acres), and Scenario 5 (538 acres).
iii. Site Availability
There appears to be more than enough commercial zoned 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 scenario 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 supported and attracted to the city by buildout. Additionally, this amount
of commercial development will marginally increase the share of commercially
generated General Fund revenues by buildout.
With this target for commercial development in the city the issue arises regarding where
to place this commercial development, and what types of commercial uses should be
Rancho Cucamonga Commercial Land Use and Market Study
AGAJANIAN & Anot4ate, 65
selected for attraction. Clearly the city will want to make the best sites available for the
most beneficial of the targcted commercial uses in order to increase the chances of
actually attracting them to the city. The land use options available to the city to address
this issue is presented in the following Section.
ii. Excess Commercially Zoned Land
This scenario analysis indicates that there is enough commercially zOned undeveloped
land to ~ the city's needs to buildore. It appears that there may be a surplus
about 500 acres or more of currently undeveloped commercially zoned land in the city.
This raises an important issue regarding what to do with the excess land. Some or all
of the excess land may be considered a commercial reserve to accommodate unforeseen
or unexpected changes 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 rezonc other parcels to commcrcial zones because th~
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
rezoned 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 rezoned for residential uses offers
one of the better approaches to reducing the commercial land inventory. This
conversion is a positive way to reduce surplus commercial land since greater residential
development will help support greater local commercial development. The conversion
of 500 acres ofcornmercial 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 industrial uses does not appear suitable in light of
the ample undeveloped industrial acreage 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.
Kancho Cucamonga Commercial Land Use and Market Study
AGAJANIAN & AJs~"iatts 66
Figure 9: Summary of Scenario Performance
132 Dm~lopod
SCENARIO I SCENARIO 2 SCENARIO 3
Dcmsnd I)cmand
Populmi~m
471 ~
SCENARIO 5 SCENARIO 6 SCENAR/O 7
Evm Population
Percentage of revenues to the
GeneralPundfxmnnew
about 28.8% of the
Percentage of the subregional market
demand through buildou~ estimated
at 1,670 acres of ~upportable
SI'I~ AVAILABILITY
Peteents~ of the ! ,002 acres of
Ranclm Cucamongs Commercial Land Use sad Msd~t,t Study
AGAJANIAN & Associstes
iii. Fiscal Needs to Buildout
Rancho Cucamonga is competitive enough to capture the 419 acres of commercial
development to at least maintain the current 28.8% share of commercially 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 share 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.
Ranelm Cucamonga Commercial Land U~e and Mark~ Study
AGAJANIAN & Associates
VII. AVAILABLE LAND USE OPTIONS
Attracting 400 to 550 acres of commercial development to Rancho Cucarnonga will
require a strong and focused effort. Commercial land use decisions in the this last phase
ofdevelopngnt will have a lasting effect upon the fiscal health of the city. It is critical
that the remaining commercial development in the city be carefully selected and sited
in order to insure positive community benefits and land use synergy.
We would recormnend a commemial development strategy which contains the following
land use options.
A. LONG TERM LAND USE OPTIONS
Long term commercial land use options identify means to promote the attraction of key
commercial uses 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 development in the city. These land use options seek to guide the city
toward a desired commercial mix by buildout.
· Reserve Excess Undeveloped Commercially Zoned Land
Maintain a suitable reserve of commercially zoned land above the 550 acre target range
in order to account for unforeseen or unexpected oppommities up to and beyond
buildout. About 200 to 250 acres of surplus commercial land should be sufficient to
keep 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 onXoff ramps and I-15 onNoff ramps north of Baseline are good candidates
for reserve sites. Parcels larger than 5 acres and under single ownership are most
suitable for the reserve.
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Some of the surplus commercial land may be rezoned to residential or mixed uses as
a means to reduce sites which would disperse commercial development away from
commercial nodes and corridors.
· Promote Aggressive Commercial Development
It would be in the interest of the city to attract commercial uses sooner than later. There
is only so much supportable commemial development left by subregional buildout. This
subregional buildout may occur in 10 to 20 years. However, commercial development,
especially retail development, anticipates growth and is likely to be in place even before
residential buildout is complete. Consequently, 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
Commercial development is characterized by uses searching for locations where people
concentrate. Placing complementary uses together can create 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 Gardens site and the General Dynamics site,
as exemplified by Tetra Vista Towne Center. These large sites can better blend
complementary uses, such as retail and entertainment uses, because greater site control
produces more oppommities for synergistic site planning.
· Orient New Retail Toward Foothill Growth Areas
Much of the commercial demand in the subregion will be generated in northern Rancho
Cucamonga and Fontaria. Development of northern Fontana will likely follow
residential development in nonher Rancho Cucamonga. Consequently, siting of
conmv~cial land should stress all of the onXoff ramps along I- 15 since these roadways
offer the only access points to nonhem Fontaria. Early development commercial uses,
supported by development in nonhem Rancho Cucamonga, can preempt community
and regional level commercial development in Fontana and help capture a greater share
of market demand, as needed.
· Consider Urban Entertainment Center at Regional Mall Site
A complementary 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 entertainment 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.
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· Maintain Foothill Boulevard as the Principal Commercial Corridor
Foothill Boulevard is the principal commercial corridor within the city. It will continue
to serve as the principal commercial corridor after buildout. Maintaining this
commercial role will require the both the integration of functionally similar commercial
uses within corridor 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 segregat~i with clear and
distinct commercial identities. Western Foothill Boulevard should continue to provide
the city with neighborhood retail, community retail, recreational and other commercial
uses, particularly those which benefit most from traffic and smaller lot sizes. Central
Foothill Boulevard, 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,
and other high volume commercial uses which can most benefit from this highly
accessible and 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 introduce 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
presently provide neighborhood level retail goods and 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
directly affected by the new commercial development. The impacts will occur slowly
as the new commercial development is brought on-line over the next 10-20 years. Due
to this long impact period, many of the directly affected existing stores in the comdor
will gradually change in response 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 take 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.
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· Continue the Haven Avenue Office Corridor
There is ample commercial land for retail, recreational, lodgings, and other commercial
uses within the city to accommodate non-office commercial development. Because the
Haven Avenue corridor 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 Redevelopmerit Project
Area in order to generate greater property tax (increment) revenues to the city. Despite
the limited applications for RDA increment dollars, they still benefit the city greatly.
It does not appear that the RDA would need to provide incentives to attract commercial
development at this time in fight of the ample supply of commercial land; however, the
RDA should be prepared 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 commercial
development.
· Maintain Northern Commercial Areas
All appears to be balance in Subareas 7 and g with regard to existing commercial land
and commercial demand. Commercial land planning and siting for these northern
residential districts has created a well ordered and balanced commercial land inventory.
The city should, however, look closely at the share 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 noah side of Foothill Boulevard in Subarea 2. Such development will help create
a critical mass of commumty 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 3 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 noah side of the corridor. These commercial
uses may include commercial recreational facilities, entertainment outlets, personal
service offices and medical offices.
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· Provide Retail Sites on 4th Street
The city should move to provide retail sites along 4th Street in order to direc~y
m with community retail uses planned for the Ontario Mills project. These sites
should ~'ont on 4th Street, be located close to the I-15, and have sufficient depth (up
to 300 feet) to accommodate high volume, discount priced, commumty level retail
stores with surface parking. Freeway related uses, such as gas stations, lodging or
restaurants should also be located 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 1-15 and
Millken Avenue in order to preempt retail development at the Ontario Mills site.
Consider the Need for Commercial Uses on Archibald Avenue
The rezone application to convert industrial land 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 fast race in
May of 1997. Spin off benefits from racetrack spectators can be a source of demand
for hotelXrnotel facilities in the immediate vicinity. This demand 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 I-15 along 4th Street.
· Expand Commercial Sites at the I-15\Foothill Boulevard On\Off Ramp
Because this location anchors the regional access to Foothill Boulevard it should
become a major commercial node in the city. These sites to the east of I-15 are prime
competitive site for commercial development which attract subregional customers and
preempt commercial development in northern Fontana. Thus, adding commercial land
in the city east of the I-15 will greatly benefit the city in the future.
· Monitor Commercial Land Use Performance 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
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AGAJANIAN & Associst~s 7 3
performance with the use of business license information can help the city assess the
achievement of their commercial development targets. These two key sources of
information should be armually evaluated over lhe next 10 years since this is the critical
period for Rancho Cucamonga commercial development.
Retail sales tax information should be examined annually to determine if the progress
is being made with regard to retail sales leakage and subregional capture share. P~tail
sales leakage ( as computed on Table 14) should be evaluated to dete4-,,fine the amount
of the leakage reduced annually. Efforts should be made to am'act 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, annual retail sales tax analysis for the subregion (as computed on Table 14)
w~l quantify the rate of retail sales capture for the city. The city's target of 400 to 550
aca'es of conunemial 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 sufficient
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 ~conomic base of the city is
changing and provide useful information as to growing and lagging business s~ctors.
Awareness of these business sector changes can help the city make more informed
decisions regarding the size, composition and trends in the Rancho Cucamonga
economy and its desired direction of growth.
· Initiate Study Detailing Proposed Commercial Land Use Changes
There are several applications to rezone industrial properties for commercial uses. Each
of these applications should be evaluated with reference to the fmdings 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 action 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.
· Imtiate Feasibility Study for Ente'rtamment Center at Mall Site
A study to closely examine the feasibility of a regional entertainment center at the
regional mall site should be initiated promptly in order to preempt other competitive
sites in the subregion. More specifically, this study should evaluate the entire Subarea
3, west of I-15, to determine if significant commercial recreational uses can be
suplxrted and can lead to the formation of a regional entertainment node for the Inland
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Empire. The property owner, Redevelopment Agency and the city should fund such a
sm .
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