INDUSTRY—Obstacles Abound, but Industrial Lure Remains Strong

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With the $2.4 billion Alameda Corridor on track to be complete by next April, a number of industrial developers are reshaping downtown’s industrial landscape in preparation for the surge in cargo shipments that will soon begin rolling through the area.

Trace Chalmers, president of Pico Rivera-based Chalmers Corp., is among the busiest catalysts on the industrial scene downtown with no fewer than 15 downtown projects currently in the planning or construction stages.

His 70-employee firm is a “soup-to-nuts” operation that employs architects, engineers, concrete foremen and finish carpenters.

The firm has committed $40 million to its 15 projects, which range from a 10,000-square-foot garment manufacturing building at 1421 N. Main St. in Chinatown to a 240,000-square-foot coffee processing facility at 2700 Fruitland Ave. in Vernon. Of the 15 projects, nine are build-to-suit deals.

For the 40-year-old Chalmers, who was an industrial broker for seven years before becoming a developer in 1989, building structures brings with it a certain sense of satisfaction.

“In a sense, you’re creating the city,” he said. “I always tell my customers, ‘You may buy and sell this building, but only one person built this building.’ What makes us unique is that clients are able to commit to develop projects early on because we give them a fixed price for the whole project up front. They don’t have an exposure to cost overruns or change orders because we take on the development liability. And because of the shortage (of available industrial facilities downtown), without us, they can’t find what they’re looking for. It’s not readily available.”

And those looking to develop in eastern downtown the city’s industrial spine from the 1920s through the early 1960s face plenty of other potentially frustrating obstacles as well. For example, they must contend with myriad environmental problems, such waste oil, metal processing runoff and hazardous chemicals.

The stretch along Washington Boulevard between Alameda Street and Santa Fe Avenue, for instance, was a trash dump from the 1920s through the early 1960s.


Challenges galore

“The downtown market is an extremely dynamic place (in which) to develop,” said Mike Foley, a senior vice president at Trammell Crow Co. “It’s just that there are few opportunities to get involved in large (projects) because of the development that’s happened there in the last 50 years. There are a lot of existing manufacturing facilities that can’t compare with the current features of the newer buildings. So virtually every (downtown) development opportunity involves demolishing older traditional industrial buildings and replacing them with more contemporary buildings.”

And that’s no easy feat, which is why Randy Kendrick is focusing on it.

“I chose this business because it has barriers to entry,” said Kendrick, whose two companies, Xebec of Irvine and Kendrick Construction Services Inc. of Commerce, are major builders in the area. “It’s difficult, if not impossible for outside players to compete in this market. But if you find a niche and exploit that niche, you’re going to make a lot of money. It’s that simple.”

Kendrick’s companies are currently developing a $13.5 million project with three warehouse/manufacturing buildings on 10 acres of land in Vernon.

On a 2.5-acre site in Vernon, Kendrick plans to build the West Coast’s first food irradiation center $6 million, 37,000-square-foot project for SureBeam Corp., a division of Titan Corp.

“(Xebec) is the biggest industrial developer in the Vernon-Commerce area,” said Paul Sablock, a broker for Colliers Seeley International Inc. “This is their niche. They understand the infill market and they get creative with what the market demands. You’ve got to move quickly and have a good relationship with the brokerage community and the buyer and the tenant communities. They build good product and they get the job done.”


Freezer force

Yet another force altering downtown’s industrial scene is Ken Jackson, sales director for L.A.-based Dynamic Builders Inc. He oversaw the recent completion of two $16 million freezer facilities a 111,000-square-foot building on Alameda Street in Vernon and a 121,000-square-foot freezer at 3100 E. Washington Blvd. in downtown which have already been sold.

Two other companies have hired Dynamic Builders to construct 55,000- and 78,000-square-foot freezers in the Vernon area.

It’s all in a day’s work for Jackson and his 37-year-old company, which he says has constructed nearly 800 industrial and commercial buildings totaling nearly 26 million square feet.

“We give (customers) what they want,” said Jackson. “That’s our goal everyday. This is an area we know like the back of our hand. It doesn’t mean we’re perfect, but we try hard. We’re really proud that our customers keep coming back to us.”

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