Brokers: Council's stance on industrial centers could be costly

Commerce Pointe is a 75,000-square-foot industrial park on Zeiders Road in the southern economic development corridor.

Fifth installment in a six-part series.

By Doug Spoon, Editor

Paralysis by overanalysis.

That’s how one commercial real estate broker describes the approach of the City of Menifee to the concept of industrial buildings within city limits, based on statements of some in city government.

“They’re so afraid of making the wrong decision that they make no decision,” said Charley Black, senior vice president and co-founder of the Temecula Valley office of Lee & Associates, a commercial real estate services firm. “If they continue like this, they will continue to have a city of road warriors.”

Black’s comment refers to the vast majority of Menifee residents, who commute outside the city for work – many to the San Diego or Los Angeles areas or Orange County. Black and other commercial real estate brokers interviewed by Menifee 24/7 believe that unless city officials allow at least some form of industrial development in the city, areas legally zoned for such use will continue to remain open fields.

And with that, they say, the potential to create thousands of jobs – and spur retail and economic growth – will be wasted.

These brokers realize they may not be too popular with many Menifee residents, including longtime locals who speak out against any further development in what previously was primarily a rural area. As a response, they point out the fact that Menifee is now a city of 100,000 – the fourth fastest growing city in California – and that the development of some industrial business is part of the natural growth of a city this size. They say that attracting retail stores and eventually the kind of amenities (restaurants, entertainment venues) residents want will require a jump-start from manufacturing companies and distribution centers.

What these brokers are most concerned about at the moment are comments made at the July 7 City Council meeting, when Mayor Bill Zimmerman, Mayor Pro Tem Lesa Sobek and council member Dean Deines suggested considering restrictions on industrial centers. Some of the things being considered are barriers and open spaces surrounding such structures; setbacks of industrial property; guidelines for road structure to handle the wear and tear from large trucks; and general aesthetics of such buildings.

The July 7 agenda item was the result of a previous request by Deines to have City staff facilitate a discussion of “best practices and policies” for industrial centers. Brokers, who attended the meeting and addressed the council, took that to mean possible changes to the General Plan that would restrict what they believe are the kinds of businesses needed to spark Menifee’s economy, and in the process bring thousands of the jobs to the community.

Black, the VP of Lee & Associates, told Menifee 24/7 he believes that council members are so sensitive to the sentiments of some residents who oppose development, they are avoiding industrial development that must be a cornerstone of any city Menifee’s size, such as Temecula, Murrieta or Perris have shown.

“They’re so afraid to approve something that somebody might find objectionable, they do nothing,” Black said. “These developers are putting hundreds of millions on the line. Put this on top of it and they’re going to go somewhere else.”

Prior to the July 7 discussion, council member Matt Liesemeyer emailed several brokers and business executives, warning them of the upcoming agenda item and accusing one or more of his council colleagues of working with community development director Cheryl Kitzerow to craft a staff report intended to consider guidelines not included in the General Plan.

The City of Menifee’s General Plan includes two economic development corridors – areas zoned primarily for commercial business. Those corridors are located in open areas where little or no residential development is permitted.

During her staff presentation prior to public comments and council discussion on the matter, Kitzerow said the following:

“We do have citywide guidelines, and there is a broad chapter on industrial development. But those don’t address large warehouse facilities. The guidelines include more general statements from a business park or industrial standpoint.

“At the time those guidelines were created, we did not see this kind of interest in large industrial facilities, some over a million square feet.”

Supporting Deines’ request for a council discussion about the specifics of city guidelines on industrial development, Zimmerman said, “We’re not trying to put the brakes on it,” to which Liesemeyer responded, “By opposing the current City standards, you are putting restrictions that are not in the General Plan.”

Updating the General Plan is a process that takes time and is not often done. It was last updated about six months ago, and no council member voted against any aspect of it.

Menifee has two economic development corridors. One is in what is known as the Northern Gateway to the City. EDCs in the Northern Gateway are located in two areas. One area is bordered by the 215 Freeway to the west, Sherman Road to the east, Mapes Road to the north, and just below Highway 74 to the south. The other is the area between Ethanac Road to the north, McLaughlin Road to the south, Barnett Road to the east, and Goetz Road to the west. Total EDC in the Northern Gateway covers 594 acres, according to City documents.

The Southern Gateway includes 832 acres of economic development corridor. Much of that is the large open spaces you can see on both the east and west sides of the 215 Freeway. The EDC areas there run from Garbani Road on the north to Scott Road on the south on both sides of the freeway; and continues south to Keller Road on the west side of the freeway.

According to City of Menifee land use documents, 60 percent of the Northern Gateway EDC is designated for Business Park use, 10 percent Commercial Office, 15 percent Commercial Retail, and 15 percent Residential. Most of that EDC still is undeveloped, although building applications have been received for some parcels. In the Southern Gateway, 70 percent is designated Business Park and 10 percent each for Commercial Office, Commercial Retail, and Residential.

The only real industrial complex completed in Menifee so far is the first phase of Commerce Pointe, a 75,000-square-foot complex designed for industrial use. It currently houses Chutes Systems, which manufactures linen and trash chutes; and Channell Commercial Corporation, which manufactures plastic and metal enclosures for utility lines and fiber-optic systems.

Commerce Pointe is located in the Southern Gateway EDC on Zeiders Road. It was approved through a development agreement involving the City of Menifee and Riverside County before the creation of the current southern EDC. In that agreement, Commerce Pointe agreed to pave Zeiders Road and make other infrastructure improvements in order to accommodate the expanded Scott Road Interchange.

Phase I of Commerce Pointe was completed in 2018. It includes a large concrete structure with loading docks in the back and big-rig trucks often parked in the area. Not much of it is seen from the 215 Freeway, and two of Menifee’s pioneer families who live across the street– the Bouris family and Zeiders family – both have spoken in favor of such development in the area.

“I was on the Riverside County planning committee for the city,” Betty Bouris told City Council members at the July 7 meeting. “We do have economic development corridors, and I live on the south corridor.

“We’ve been expecting it to come, and our neighbors also are in favor of it. We do need that for the city. Don’t change that in the plans.”

Sobek spoke passionately about the Southern Gateway, which includes part of the District 3 she represents, saying she opposed building of logistics or distribution centers in that area. She said she preferred approving such development only for the Northern Gateway.

“I don’t have a problem with logistics centers along the Ethanac Corridor,” Sobek said. “In my research, I see that it does bring some jobs. And I do like some of the [restrictions] staff recommended. I do think the trucks tear up the streets and cost money.

“For the Southern Gateway … I thought the intent there was to have more high-tech industry. I remember having that discussion. The intent was not to have million-square-foot buildings there. I don’t believe the Southern Gateway is the place for it. That’s your welcome mat to the city. I wouldn’t like seeing cement buildings there all along the freeway.”

There was no explanation of why Sobek considers the Southern Gateway the welcome mat more than the Northern Gateway. In addition, brokers in attendance couldn’t figure out her assertion that the Southern Gateway EDC was designed for high-tech industry. Zimmerman also has described a vision for the southern EDC as a “Silicon Valley” type of research and design corridor.

“Lesa Sobek is making comments about things that were said in Planning Commission meetings many years ago,” said Gordon Mize, a senior vice president with Lee & Associates. “[The General Plan update] came to a City Council vote six months ago and was approved. And none of this came up when they originally adopted the General Plan, either.

“The plan she used in comparison was one in Murrieta, just down the road. That involved the entire re-zoning of the land in north Murrieta to ORP -- Office Research Park. It has not been successful. Though the two hospitals landed in that area, Loma Linda and Kaiser, even that construction and development has not created the robust bio-medical, R&D, office development that was expected and hoped for.

“Lesa is promoting the exact same thing that already failed.”

Kassen Klein, a consultant for many local commercial real estate brokers, agreed that Sobek’s vision wasn’t practical and that her argument that “I want to see aesthetics and more trees” didn’t make sense.

“It’s clear that they don’t want concrete tilt-ups,” Klein said. “No matter what kind of industry you put there, the design would be the same thing. They apply the same design standards. Any concrete tilt-up building has to have architectural elements.”

Mize and Klein recalled a Brokers Appreciation Luncheon held at Menifee Lakes Country Club in 2019. Zimmerman stood at the podium and, according to both men, told the audience that Menifee didn’t want big industrial warehouses and distribution centers – to the shock of the brokers, who had clients interested in contributing that element to Menifee’s economy. After the luncheon was over, Klein said, he confronted Zimmerman about the damage that comment had done.

“In brokers luncheons, Bill has been very vocal about wanting only smaller businesses,” Mize added. “That has been publicly said to developers. I don’t think that’s appropriate.

“He’s looking for small buildings to get mom and pop businesses. There was a time that market was very strong. Not anymore. Now the emphasis is e-commerce and online shopping. Those fulfill what’s in demand.”

Zimmerman responded in an email to Klein’s allegations about his comments at the 2019 event.

“Yes, I spoke from the heart,” Zimmerman recalled. “I was standing before a room full of commercial brokers -- those who bring restaurants and other businesses to our city. I seized the opportunity and encouraged them to bring more entertainment opportunities and sit-down restaurants to Menifee. I went on to say that we recognize the demand for warehouses and distribution centers, but there's an even more important need for corporate business parks that offer professional job opportunities here in town so our residents don't have to commute to find good paying jobs.

“Sadly, at the conclusion of the luncheon, Mr. Klein felt it was appropriate to publicly scold the mayor, which was unprofessional.”

Kitzerow confirmed that City staff has begun processing applications for some large industrial buildings. The only action taken at the July 7 meeting was to vote for further discussion at a future meeting.

It appears it’s an issue that might not be resolved easily.

TOMORROW: In the final installment of the series, we provide an update on the City’s stalled efforts to gain control of parks on the east side of the 215 – an area currently controlled by Valley-Wide Recreation and Park District.