By JEANNETTE DESANTIS
Is retail getting to be too much of a good thing in the Santa Clarita Valley? That's what some experts are saying, as available space appears to be outpacing population growth.
"It is a little too much right now," said senior retail associate Ray Bayat of Grubb & Ellis Co. "There may not be enough money to go around."
Bayat said that by mid-year, almost every major discount retail outlet will operate in the Santa Clarita Valley. But with a population of 190,000, the market may not be able to support them all, he said.
"Right now we have a Best Buy, Good Guys and Circuit City all within a small market and competing for the same dollars," Bayat said. "Within the next year or two, we will need to balance it out with housing if it is going to work."
No major brokerage firms track retail vacancy rates in the area, but Bayat estimates the figure to be about 5 percent. He said vacancies primarily are found in older strip malls where retailers have either gone out of business or moved to newer locations in the Santa Clarita Valley.
Marlee Lauffer, spokeswoman for Newhall Land and Farming Co., said more housing is on the way to support retail. In Valencia, Lauffer said, there are 8,000 homes approved or pending approval that are expected to be developed in the next five years. The company's Newhall Ranch project will add another 21,000 homes, beginning in 2002 and continuing over the next 20 years.
With the median income of residents in the Santa Clarita Valley hitting the $78,000 mark, high-end retailers also want to make their way to North County. "We are looking to enhance the higher-end, more upscale retailers," said Lauffer. "They will be the next generation of retailers in the Santa Clarita Valley."
In the fourth quarter, the second phase of Town Center Drive, a pedestrian-oriented street with offices, apartments, restaurants and shopping, opened with an Ann Taylor, Chicos and Zany Brainy, an upscale children's' store.
In Canyon Country, an 80,000-square-foot entertainment center opened in the fourth quarter. It features a 10-screen Edwards movie theater, with an additional 40,000 square feet of retail and restaurant space. At the Stevenson Ranch Plaza, the second phase of a 190,000-square-foot project is being built and will be anchored by East Coast retailer Steinmart, a clothing and housewares store.
Retail construction will continue well into 1999 with one of the last large parcels of land in the Santa Clarita Valley being prepared for a new retail center. In the fourth quarter, grading began at the corner of Bouquet Canyon and Newhall Ranch Road for a new 155,275-square-foot shopping center.
Newhall Land is in negotiations with a home improvement center to anchor the center, which will be surrounded by fast-food restaurants, a gas station and car wash, expected to open in late 1999. "There is still a significant demand for many more retailers in the area," Lauffer said.
Meanwhile, the industrial vacancy rate for the Santa Clarita Valley climbed to 4.5 percent in the fourth quarter, from 3.7 percent in the previous three months, according to Grubb & Ellis.
"We had some new product delivered to the market," said Jim Linn, senior vice president. "But 4.5 percent is still a very small vacancy rate."
Additions to the market included a 40,120-square-foot building owned by Wilshire Financial, a 63,716-square-foot building and a 105,900-square-foot building, all of which went up for lease in the fourth quarter.
"Those three buildings alone add up to 2 percent of the market," said Linn, pointing out that other industrial spaces are being grabbed up before they are even completed.
In the Vista Business Park, 167,990 square feet were leased to Pharmavite Corp. One of the biggest buildings leased in 1998, it is expected to be completed this month.
The second phase of Vista Business Park began construction in the fourth quarter. Malay's, a hair-care products distributor, leased 113,980 square feet and will be relocating from its Sun Valley site.
"That is a good sign of the market," Linn said. "Normally it is difficult to do because people like to see the building before they sign a long-term lease."
Over in Lancaster, some retail activity was noted in the fourth quarter with the opening of a 106,000-square-foot Home Depot. Ground was also broken on the 1 million-square-foot Rite Aid distribution center. Before the store opened, a job fair was held and 4,500 prospective employees showed up.
"That is indicative of the labor market we have out here," said Vern Lawson, managing director of marketing and economic development for the city of Lancaster.
Rite Aid, which has $11.4 billion in sales nationwide, is expected to hire 800 new employees for its opening in September, Lawson said.
Also in the fourth quarter, escrow closed on the Wayne Gretzky Roller Hockey Center. Construction will begin this month on the 45,000-square-foot roller rink. Lawson said the rink adds to the area's first entertainment area that includes the Outlet Center, the Lancaster Municipal Baseball Stadium and the nearly completed 22-screen Cinemark Theater.
The city of Palmdale entered into one of its largest land deals in years with A.C. Warnack Trust. The deal will allow it to take control of 120 acres of land near Avenue O near the Antelope Valley Country Club and market it to developers without actually purchasing it until 2003.
Under the deal, the city has three years to make $840,000 worth of infrastructure improvements and five years to purchase the property. City officials said the deal gives them a site to attract industrial development.
"It was an opportunity for us to have a large amount of land available without having to purchase it yet," said Dave Walter, senior economic development projects manager for the city of Palmdale. "And it puts us on a more competitive basis with other surrounding cities."
? In the Santa Clarita Valley, the second phase of Town Center Drive opened as a pedestrian-oriented street with offices, apartments, restaurants and shopping.
? Grading began at the corner of Bouquet Canyon and Newhall Ranch Road in Santa Clarita Valley for a new 155,275-square-foot shopping center.
? In the Vista Business Park, 167,990 square feet were leased to Pharmavite Corp. Construction began on the second phase of the park.
? Arden Realty Inc. purchased the newly renovated Tourney Pointe, a 229,000-square-foot center in Valencia.
? In Lancaster, a 106,000-square-foot Home Depot opened, and ground was broken on a 1 million-square-foot Rite Aid distribution center.
? The city of Palmdale reached an agreement with A.C. Warnack Trust that will allow the city to market 120 acres to developers without actually purchasing it until 2003.
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