Retail Developers Discover Santa Clarita Valley By SHELLY GARCIA Senior Reporter A few years ago, you couldn’t give away land for retail development north of Valencia. Today, at least 10 retail shopping centers in the Santa Clarita Valley are in some stage of development, many stretching farther and farther from the Valencia commercial hub that is the traditional center of the community. The combination of residential development sprouting all across the Santa Clarita Valley and the growing base of businesses creating brisk daytime traffic has spawned a dramatic increase in consumer demand for retail centers. And the retailers are lining up for space. “A couple of years ago, a couple of these sites would have been premature,” said Steve Hopkins, president of Hopkins Real Estate Group, which is developing five of the centers underway in the region. “In a couple of cases we closed (on the land) without specific tenants in place, but we were so confident in getting those tenants that we decided to do it.” Most of the complexes under development are neighborhood centers, less than 100,000 square feet and anchored by supermarkets or drug stores. In some cases, they are only miles from each other. Despite the proximity, brokers report that tenants are looking to make multiple deals, persuaded as much by the development yet to come as the building that has already taken place. “It’s the traffic that drives past the center, the daytime population, and the residential population,” said Bert Abel, vice president of the retail group at Grubb & Ellis, who is marketing the Hopkins centers. “The more dense those factors, the higher the traffic counts, the closer together you can put those concepts.” Until recently, the majority of workers spending their day in Valencia commuted from outside the area, and the majority of residents went elsewhere to work as well. As a result, shopping was dispersed, with commuters running errands closer to their place of work or home, wherever that might be. But today about 50 percent of the population of Santa Clarita Valley no longer leaves the Valley to work. And the number of residents has increased substantially. The population of the city of Santa Clarita grew more than 30 percent during the 1990s. The current population, 155,000, is projected to increase by another 20 percent to more than 187,000 by 2010. Perhaps more significant, the population of the Santa Clarita Valley, which includes unincorporated areas as far north as Castaic, is expected to increase to 271,467 by 2010 from about 195,000 currently. “This is a master-planned area and you’re starting to see the retail response to master-planned level of rooftops,” said Larry Kosmont, president and CEO of real estate consultancy Kosmont Cos. The critical mass of traffic required for large regional shopping centers or big box stores differs from what’s needed for smaller community complexes. A free-standing Home Depot, for example, may want a population of 100,000 in the radius from which it draws, whereas a shopping center with many national retailers may look for populations in excess of 300,000. A small community center may look for a population density of 20,000 to 50,000 within a three-mile radius. In addition to the growing residential population, retailers are counting on daytime traffic from the businesses that continue to relocate to the area. Valencia currently has a daytime population of 18,000 and that number is about to increase by about 7,000 as new industrial developments Rye Canyon Business Park among them come on line, according to Bert Abel, vice president of the retail group at Grubb & Ellis, who is marketing many of the upcoming centers. The combination of residential and commercial traffic is now sufficient to attract a second Home Depot and a second Target store, and, along with the anticipated increases in both types of shoppers, other national companies are turning their sights to the area as well. “I think developers and tenants recognize that it’s critical to get a foothold in a well-located center within a community with anticipated growth,” said Mac Chandler, senior vice president at Regency Centers, a Jacksonville, Fla.-based real estate company with 268 properties, including 23 in Southern California. “I think the long-term growth prospects are what’s most appealing. Tenants see Valencia like they saw the Irvine Ranch in the ’60s.” One such retailer is Kohl’s, which has signed on for 88,000 square feet at Valencia Crossroads, a 17-acre, $35 million center Regency is developing at Valencia Boulevard and McBean Parkway. The population spurt throughout the region is also creating a need for smaller shopping areas that can house dry cleaners, groceries, nail salons and the other local retailers and services a short hop from where people live. “There are still some lengthy drives from one area of Santa Clarita to another, so you’re seeing the distribution of the centers in more geographically appropriate locations,” Kosmont said. Among the neighborhood centers currently under or close to completing construction, two are located where residential and daytime populations are most dense. They are: & #149; Valencia Town Center, a 9,600-square-foot retail complex with apartments at Town Center Drive and McBean Parkway under development by Hanover Financial Co. & #149; Promenade at Town Center, a 184,000-square-foot grocery-anchored center at McBean Parkway and Magic Mountain Parkway, which was recently completed by RKR Inc. Development is also taking place well to the north, east and west of the Town Center area, a commercial hub of the city. Consider these developments underway by Hopkins: & #149; River View Place, a 45,000-square-foot center at Via Princessa and Sierra Highway expected to open in June 2003; & #149; Valencia Village, a 30,000-square-foot center at Newhall Ranch Road and Dickason Drive, which will open in April 2003; & #149; Highridge Crossing, a 70,000-square-foot center at Copper Hill Drive and Newhall Ranch Road, also slated to open in April 2003; & #149; Seco Canyon Plaza 1 and 2 at the southeast and southwest corners of Seco Canyon Road and Copper Hill Drive respectively, totaling 74,000 square feet. The first phase of the Seco Canyon development just opened and the second is set to open in June 2003. In addition, Intertex, a Valencia developer, is building Castaic Plaza, a 40,000-square-foot center at Lake Hughes Road and Interstate 5, set to open in June 2003; and Regency is developing Westridge Village, a 100,000-square-foot center at Valencia Boulevard and Interstate 5, which will be anchored by Albertson’s. That complex is also expected to open in the summer of 2003. Not only are centers such as these springing up in response to an increasing number of residents, the developments are also being fueled by the demographics of the anticipated newcomers. Many of those moving to the region are younger families with median household incomes of $70,000 and more. “Suburban communities also tend to have younger populations with growing families, so they hit a good sweet spot in a retailer’s demographic,” Kosmont said.
