Mines Ain't Dark as a Dungeon No More

Although we wouldn't mind if Vulcan Materials was leaving us unmarked packages of cold, rock-hard cash in a Swiss bank account (made of fine construction aggregate) on a regular basis, they're not.Even so, we can't help but notice some of the great press they've been getting lately, especially as they are often considered the enemy in some of the FC (notably Azusa and Claremont). Patrick Seitz of Investor's Business Daily just wrote an article explaining how well the construction aggregate industry is doing these days, buoyed by strong commercial and government building. Vulcan is planning to buy a competitor for $4.6-billion. This ain't a small company, folks, and growing public works projects in, say, California, are going to increase the need for its services.

Obviously, our cities shouldn't be kowtowing to mining interests over the good of their residents [Like a fiend with his dope and a drunkard with his wine / A man will have lust for the lure of the mine], but the IBD article has some interesting quotations from the "other side" of the usually told story:

Mines can have economic lives of 25 or 30 years, so they need to be excavated efficiently and with an eye toward use of the land once mining is completed, [Vulcan CEO Donald] James says.

"We are large landowners, and our land is largely in metropolitan areas — and we are very cognizant of the fact that mining is an interim use of the land,"James said. "Our land will likely end up as either residential or commercial development around a beautiful turquoise quarry lake. So we are using technology to help us maximize both the efficiency of our production and the value of our residual real estate."

Vulcan Nerve Pinching

Centinel noted last week that "Vulcan Materials Company was dubbed the most-admired building materials company in America by Fortune, in part for the company's 'social responsibility.'" Vulcan Materials, most recently in the Azusa and Claremont elections, is often publicly decried as the enemy by politicians in the foothill cities because, well, no one wants a mine in their town—especially if we are talking about an upper-middle class (and beyond) town that is trying to maintain that pristine sheen of green so essential to foothill city politics. [For one example of how all this works, check out the Claremonters Against Strip Mining website and then read the Claremont Insider's commentary on the subject.]

Reality being what it is, however, as Allison Hewitt recently reported in the SGV Trib (archived here), the demand for building material is growing fast while supply is shrinking and, says Hewitt, according to a recent report from the California Department of Conservation: "Over the next 50 years, the San Gabriel Valley will produce less than one-third of the sand and gravel that it needs for construction purposes." (A similar report and map said much the same thing last year).

The price of NIMBY-ism in this case is sharply increasing construction costs as you import the heavy material from further and further away. The result is increased costs to tax-payers when it comes to building roads and other local public projects as well as the further exacerbation of the already high cost of housing endemic to our area (to say nothing of increased exhaust from the trucks). You may be willing to pay these costs, but let's not pretend the issue is as simple as being "against" those intrinsically eeevuhl mines, or that environmental issues are somehow above the ambiguity and messiness of plain old politics.

In any event, also in the "what does Claremont think of that" category, I notice that Richard McLean of FoothillPages.com recently announced that the Irwindale Chamber of Commerce gave Vulcan Materials an award, as the company "sponsors Irwindale Educational Foundation scholarships every year and has been a recent benefactor to students at Lee Elementary School in Azusa, donating to students there and holding barbecues at the school."

My Girlfriend's Kitchen and Azusa Love-History

Anissa V. Rivera dishes out some Azusa history (of love, ranches, and Linda Rondstadt relatives) and the scoop on an interesting new business in Glendora.

Upper Middle Class Exists Outside LA!

Every once in a while I like to comment on our neighbors in the Inland Empire. People "in LA" (right, whatever that means), already perceive the SGV as nowheresville, and of course the IE strikes them as some sort of far off Bakersfieldian wasteland. Amanda Covarrubias and Ashley Powers write an article in the LA Times entitled "Far-flung suburbs want good life too" [no, really?] that echoes thoughts about the growing demand for high-end retail in the Inland Empire I expressed some weeks ago. I'm glad that the La-La Times ran the article, but they are a little late in the telling. These stores have already been up and running for a while in some places, largely because of the rise in affluent neighborhoods throughout the region. If that is news to you, you need to do yourself a favor and get the hell out of LA once in a while.

As I mentioned before, Victoria Gardens itself is a great example of negative IE perception not measuring up to reality, as an excellent OC Metro article by one Joanna Posner mentioned a long time ago:

...retailers were unsure whether or not the market was primed for affluent customers. In fact, Victoria Gardens opened with stores that were too small in terms of square feet and put in their B-line merchandise, not knowing the demand would fly through the roof. "They should’ve put in their A-line merchandise and they should’ve built bigger stores," says [Dr. John] Husing.

Still, Victoria Gardens is the exemplar of retail success, and developments under way hope to emulate the center’s popularity. Forest City Enterprises, Inc., a $7.8 billion real estate company that is behind Victoria Gardens, has a portfolio of retail centers, apartment communities, office buildings and hotels throughout the U.S. And [developer Matt] Landers says that out of all of Forest City’s projects, Victoria Gardens has the highest per-square-foot sales.

The IE Gets Some Respect

About time.

Michael Rappaport of the Daily Bulletin quotes Ira Jackson, dean of the Drucker business school at Claremont Graduate University: "With a population the size of Oregon's and a growth rate comparable to Phoenix, the Inland Empire is an increasingly important political, cultural and economic reality." So the Drucker school is holding a conference entitled "The Inland Empire: Commercial Development and Economic Realism."

Even though everyone supposedly knows the IE is growing and getting wealthier by the minute, one still finds people consistently underrating the area in various way. For instance, when the upscale, outdoor Victoria Gardens mall was built in Rancho Cucamonga, many retailers put in the their b-line merchandise and medium size stores. It wasn't long before the world discovered (why was this a surprise?) that there were lots of shoppers out that way who were sick of having to drive back towards Los Angeles, and retailers realized their mistake.

Wal-Mart Killer coming to Glendora?

The Curbed Los Angeles blog reports that TESCO, a sort of British Wal-Mart with a high-end, technologically savvy twist, is likely coming to Glendora (not to mention West Covina, Upland, Rialto and Fontana, among others). In Glendora, TESCO recently applied for a liquor license for a potential location on the corner of Grand Avenue and Gladstone street.

Wal-Mart, and its lovers and haters, should take note, as this CNNMoney.com article makes clear.

Given the frequent controversy that Wal-Mart has generated in Southern California generally and the foothill cities particularly (take the recent Rosemead controversy, for example), one wonders how this new development will play out. TESCO has apparently held its own with Wal-Mart in its native Great Britain, and many in the business community see its move to the United States through Southern California as a direct assault on Wal-Mart itself.

The question is whether opponents of Wal-Mart will take on TESCO with the same vigor, or will they leave one of their mortal enemy's only potential competitors alone? Since many of the same complaints people make about Wal-Mart apply just as well to TESCO (see here, for starters) logic would lead one to think that Wal-Mart haters would attack TESCO as well.

However, since most of the locations into which TESCO is moving will likely welcome the company, and since many of the most vociferous opponents of Wal-Mart seem narrowly concerned with that company alone, I'd guess that TESCO's inland invasion will go smoothly. But one never knows...

Office Space

Vacancy rates for office space in Los Angeles County are at a 15 year low and rents are increasing, says the Casden Office and Industrial Market Forecast put out recently by the Lusk Center for Real Estate at USC. The full report is available from the Center for $75. See the article by Kevin Smith of the Pasadena Star News for a few key items of interest:

[Los Angeles County's] industrial market—the largest industrial center in the United States—also boasts the lowest vacancy rate at 1.6 percent. But as low as that rate is, the San Gabriel Valley has it beat, with an industrial vacancy rate of just 1.1 percent...

Industrial construction activity is about half of last year's levels, at 4.4 million square feet year-to-date, mainly occurring i[n] the San Gabriel Valley and northern Los Angeles County.

"There's limited land on which to build," [USC Professor Delores Conway, director of the Forecast] said.

In a continuing trend, the Inland Empire is still the nation's top market for building big industrial warehouses and distribution centers.

See also: a summary press release of the report, Rodd Cayton's Press Enterprise article, and Gregory Wilcox's LA Daily News article.

Two quick observations:

First, the vast majority of cities across the country would sell their mayor's soul for the sort of local economy that is currently normal in southern California. If there are problems with our city governments, it is not the fault of our local economies. Our city coffers should contain ample amounts of tax dollars.

Second, although every city has different needs and circumstances, if they want to develop and maintain a stable, diversified economy they would do well to focus on policies regarding land use, taxation, regulation, etc. that attract other businesses besides retail sales. Big box stores and car dealerships that bring in large chunks of sales tax dollars are easy and attractive targets, but crafting policies that encourage industrial and office-based businesses (by, say, ensuring space for such enterprises) is a much better strategy for the long-term health of our local economies. Unfortunately, many city officials don't act as if this simple economic fact was true.