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Shopping Centers Today -> February 2003
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ONCE SCORNED, RIVERSIDE DRAWS RETAIL, HOMES
BY IAN RITTER
For years Riverside, Calif., a city of about 270,000 people 60 miles east of Los Angeles, has suffered from a reputation for high levels of smog and low levels of income. Consequently, despite the city’s improvements in both those areas, its outskirts have remained undeveloped. Until now, that is.
Recently, developers have been giving Riverside a second look. One of the first to do so, Sterling USA Developments, saw potential in Riverside’s surrounding areas when few others did. In 2000 the company bought a vacant 28-acre parcel in Canyon Springs, on the eastern edge of town.
“We look for land opportunities that have some hair on them, some problems we can solve,” said Peter Sterling, San Diego-based Sterling USA’s president. “We didn’t know who was going to end up there, but we knew it was a good piece of land.”
Events have proved him right. There are now more than 10,000 new houses going up in the area, many of which will sell for more than $250,000, according to the Riverside Downtown Partnership, a not-for-profit organization formed by business leaders to promote the city’s downtown. Still more development is planned for the Canyon Springs area and elsewhere, which will provide additional customers for new and existing retailers. For his part, Sterling is opening a 286,000-square-foot open-air center in October called Canyon Springs Shopping Center, whose anchors will include Linens ’n Things, arts and crafts chain Michaels and Target.
Vacant land is more plentiful and affordable in Riverside than in neighboring Los Angeles and Orange counties, according to Janice Penner, executive director of the Riverside Downtown Partnership.
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“People are beginning to realize the county has made improvements in air quality and there’s land for development, and there are people who live here with money,” she said. As a result, Riverside, which was established in 1883 around the citrus industry (the city has 20 buildings on the National Historic Register), is thriving again, offering opportunities to developers through the large, undeveloped tracts of land that lie to its east, Penner explained.
Sterling’s site is ideally located in terms of visibility and transportation access, lying at the junction of state routes 215 and 60; Sterling describes his development as being “right on the off-ramp.”
The developer says his major coup was getting Target, which bought 11.8 acres and helped attract other tenants. “Target’s the key,” he said. “They’re the nucleus, and everyone’s revolving around them.”
Sterling USA has sold some parcels to other companies. San Pedro, Calif.-based Rich Development is building the Linens ’n Things and Michaels stores, and also a Pier One Imports. Best Buy bought one parcel and opened in early 2002. Sterling said he will keep about five plots for the development of additional retail and restaurants.
Canyon Springs has inspired other retail developments, said Kevin Palmer, the city’s economic development manager.
“There’s a tremendous pent-up demand for certain retail services,” Palmer said. “A lot of the residents leave the county to shop.”
Pasadena, Calif.-based Southland Cos. is building a 290,320-square-foot retail-entertainment project called University Village. It helps that the University of California at Riverside plans to increase its student population from the current 16,500 to 20,000 over the next five years, said Palmer. (The school had only 5,000 students when he graduated in 1984.)
About five miles from Canyon Springs, a new neighborhood center called Orangecrest Plaza will house the area’s first Kohl’s. And The Rouse Co. owns an 80-acre plot that Palmer said he would like to see turned into a regional mall. Rouse officials could not be reached for comment.
Retailers are also springing up around the 1.1 million-square-foot Galleria at Tyler, a regional mall on the city’s southwest edge that General Growth Properties acquired in August.
The city’s historic downtown is not being left out either. Hollywood, Calif.-based developer Alan Mruvka plans to break ground this year or next on a 300,000-square-foot mixed-use development called Villaggio.
“It’s very exciting,” Palmer said. “It’s a good time to be here and see it all happen at once.”
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