Got land? The San Fernando Valley doesn’t – but the Santa Clarita Valley does. And because of that, developers are busy building there. With about 250 acres of buildable land, compared to the less than 3 acres available in the San Fernando Valley, the Santa Clarita Valley is rising. A lot of the building focuses on the need for industrial space. About 700,000 square feet is under construction, according to NAI Capital Inc., making Santa Clarita far busier than the San Fernando Valley, where only about 350,000 square feet is under construction, mostly at one location. Among the rising warehouses is the IAC Commerce Center in Valencia, a 116-acre project by International Airport Centers Inc. of Highland Park, Ill. that eventually will bring more than 1 million square feet onto a tight market that has only 2.2 percent vacancy. Another project that will get underway this year is the Center at Needham Ranch; it will eventually include more than 4 million square feet on 145 acres. New offices and corporate headquarters are also underway in the Santa Clarita Valley. Logix Federal Credit Union is expanding into Valencia, relocating from its Burbank headquarters, and building a new, 170,000-square-foot campus on 12 acres with walking trails and outdoor working and eating places. It chose Santa Clarita because of available land – something it didn’t find elsewhere. Scorpion, a website design firm already in Valencia, has chosen to invest long-term in the area by building a new, 100,000-square-foot headquarters so its expanding workforce can stay local. With abundant space to spread out, the company’s new home will include amenities such as a cafeteria, training rooms, gyms, showers and outdoor eating that employers now use to recruit new employees. Growth and expansion Last year was a banner year for business expansion and new growth, says the Santa Clarita Valley Economic Development Corp. Examples the agency highlights include Valencia aviation repair company Sunvair, which nearly doubled its real estate by relocating within the Valley, and SetPoint, a biomedical technology company, which also moved into larger space. Other companies relocated to Santa Clarita last year, including precision machine parts manufacturer AirBolt Industries, medical device maker Avita Medical and managed print service provider Image 2000 Inc., which moved to a larger space in Valencia from Van Nuys. But employers and developers favor Santa Clarita for more than just its land. The area is repeatedly ranked as among the top Most Business Friendly Cities by the Los Angeles Economic Development Corp. It has no business license fees and no user tax for utilities, gross receipts or payroll. In contrast, Pasadena taxes range between 7.67 percent and 9.4 percent on electricity, telephones, cell phones, gas, water and cable, according to a comparison by the SCVEDC. Glendale has a 7 percent tax on those uses except for cellular use. Craig Peters, executive vice president for L.A.’s CBRE Group Inc. who is responsible for leasing several new industrial projects rising in Santa Clarita, said the lack of available industrial land in L.A. County has kept it from growing. Several years of effort between the city of Santa Clarita, the SCVEDC and the county has brought major industrial projects to the region. “With the tremendous supply-demand imbalance, developers and investors see the Santa Clarita Valley as ripe for development,” Peters said. “Combined, these projects will provide a new home to thousands of jobs in the county.” Real estate is also cheaper in the Santa Clarita Valley than most of the San Fernando Valley areas. Industrial asking rent in the Santa Clarita Valley was 66 cents a square foot in last year’s fourth quarter, according to NAI, while San Fernando Valley rents ranged from 76 cents a square foot in the West San Fernando Valley region to 83 cents in the Central and East San Fernando Valley regions. The average sale price of industrial space in Santa Clarita last quarter was $126 a square foot, compared to $176 a square foot in the Central San Fernando Valley. New housing? New jobs and available land are great for the Santa Clarita Valley’s economic growth, said economist Mark Schniepp with the California Economic Forecast in Santa Barbara, but the influx of new workers also increases the need for new housing. However, developers wanting to build housing have not seen nearly the success with getting approval that commercial developers have there. The primary new housing project waiting in the wings is Newhall Ranch, one of the biggest development projects proposed in all of California, Schniepp said. That plan envisions 21,500 homes and 11.5 million square feet of commercial and industrial space across several small, city-like communities in the Santa Clarita Valley’s western portion. Another is Centennial, conceived for the northern tip of L.A. County that borders Kern County, which would bring 19,300 homes and 10 million square feet of commercial space. Together, they could additionally bring in more than 20 million square feet of office, industrial and retail space, Schniepp wrote in a report. “It would be one of the biggest things to hit L.A. County in years, and completely transform Santa Clarita Valley,” he wrote. But both projects continue to face uphill battles. Newhall Ranch by Five Point Holdings in Aliso Viejo received county approval more than a decade ago but was overturned in 2015, and the project is back in the public hearings process. Tejon Ranch Co., the developer of Centennial, is going through the Environmental Impact Report review process. With Newhall Ranch still waiting for approval, other residential developers haven’t proposed anything, Schniepp said. “With Newall Ranch delayed, and delayed, and delayed, it’s created a huge backlog of demand and slowed growth overall over the last several years,” Schniepp said. With so much new commercial building underway and on the horizon, job creation will outpace new housing development, creating an imbalance, Schniepp said. The result will be more traffic on the 5 and 14 freeways, the main routes into and out of the Santa Clarita Valley.
