Shopping Center Business

MAY 2015

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268 • SHOPPING CENTER BUSINESS • MAY 2015 the 101 highway and an example of the type of unique development taking place in the marketplace. SCB: What retailers are currently ex- panding in the tri-county region? Davies: There are several that are ag- gressive in their expansion plans, but the majority of regional and national retailers looking for new locations in the region are being selective and filling voids in their store spacing strategies. The grocery, drug store, apparel and restaurant categories are most active. Shop space demand is highest in east Ventura County, southern Santa Barbara County and portions of San Luis Obispo County. It is also important to note, that compared to other regions, there are a large number of thriving inde- pendent specialty shops and restaurants especially in the Santa Barbara and San Luis Obispo downtown areas giving those areas their own unique personalities. The national and regional brands have had to figure out how to compliment and adapt to this dynamic. Some of the national and regional retailers looking for locations are Sprouts, Foods Co., Aldi, Smart & Final, Starbucks, Coffee Bean and Tea Leaf, Dunkin Donuts, Rite Aid, Ross, ULTA, Styles for Less, H&M, Hobby Lobby, Bonefish Grille, Islands, Urbane Café, Chipotle, Habit, Carl's Jr. and Panda Express. SCB: What type of commercial real es- tate developments are best suited to this region? Davies: It varies depending on the community. For example, in downtown San Luis Obispo and Santa Barbara the emphasis is on vertical mixed use with a component of retail on the ground floor. In Paso Robles, Santa Maria, Goleta, Ox- nard and Camarillo it is more conven- tional open centers and some horizontal mixed-use. One of the unique aspects of the region is there is a significant amount of open space compared to the more densely developed areas of Southern California and San Francisco. However, due to development constraints and a population that is fiercely protective of the open space, very little is available for development. Hence, infill projects tend to be more popular and feasible. There is minimal cookie-cutter development happening which also creates an oppor- tunity for national and local retailers look- ing to experiment with new formats and concepts. SCB: What is the outlook for new roof- tops in the tri-county area? Davies: The Southern Central Coast re- gion currently has an estimated popula- tion of almost 1.6 million people. Ventura is the largest county with 843,000 people; Santa Barbara County has 433,000; and San Luis Obispo County 272,000. All three counties are poised for residential growth with pending, approved, under construction or recently completed proj- ects totaling approximately 12,000 units in Ventura County, 6,300 units in Santa Barbara County and 2,400 units in San Luis Obispo County. Some of these proj- ects will have multiple phases over a num- ber of years but they represent a healthy population growth rate of 2 percent to 3 percent for the immediate future. SCB: What are some of the challenges for new commercial development on California's Southern Central Coast? Davies: As I mentioned earlier, 'man- aged-growth' is the mantra for this region. Each city and county is unique and so are the challenges in getting projects ap- proved. The challenges can be summa- rized as growth limits backed by specific ordinances, lack of infrastructure including highways and water availability as well as a highly passionate public's involvement in the approval process and their strong desire to maintain open space. Both Ven- tura County and the City of Santa Bar- bara have adopted slow growth ordinances that have been voted in by their respec- tive communities. Ventura County is the tenth most productive agricultural county in California. In order to preserve the ag- ricultural lands and open space all of the cities within the county except one and the county of Ventura adopted the Save Open Space and Agricultural Resources (SOAR) ordinance which establishes city urban re- striction boundaries (CURB) boundaries. Development can occur inside the bound- aries, but not outside with few exceptions, unless the project is approved by the vot- ers which, as you can imagine, has sharply curtailed wholesale new development. In the City of Santa Barbara, Measure E was enacted years ago, and places an annual cap on the square footage of commercial properties that can be developed. The pur- pose of Measure E is to maintain a balance between the amount of housing available and the commercial establishments where those people would be employed. Like the rest of California, this region is also dealing with a serious drought condition creating a significant water availability issue. Last but not least is the public's involvement in the approval process and their strong desire to maintain open space. Any developer or retailer looking to be expand in this region needs to understand this concern and work hand-in-hand with the community to cre- ate new projects that provide new retail and restaurant services while still preserv- ing the environment and quality of life for the residents. SCB: How would you summarize the outlook for the region? Davies: The retail forecast for South- ern California's Central Coast is upbeat overall for those developers and retailers that understand the market and value its uniqueness. The timing is right as the retail industry is enjoying post-recession momentum and the market fundamentals are solid. For retailers that are expanding, this region presents a particularly strong opportunity. SCB Cardiff Development Partners is developing Trinity Plaza, a mixed-use project in Oxnard, California, that includes a convenience retail center and a church adjacent to a residential neighborhood.

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