If making a decent profit is good for the real estate industry, it can't be bad for the city of Fontana, reasons Neil A. Stone, development agency director for the San Bernardino County community of 50,000.
Stone gave up the good life of a private real estate consultant on the Westside, including a home in Santa Monica, when he moved to this largely working-class city in 1983, but the challenge was just too much to pass up, he said in an interview.
"Fontana is much more than Kaiser Steel and high winds on the San Bernardino Freeway," he said with infectious enthusiasm. "It has a 14-square-mile redevelopment area--the largest single redevelopment area in California--and is involved in true joint-venture partnerships with several developers. We're pioneers in new relationships between cities and developers that have developed since Proposition 13."
One way to determine the future of Fontana is to add up the amount of land that is undeveloped. Of the 34 square miles in the city limits, fully 21 square miles, or almost two-thirds of the city's area, is within a redevelopment area, Stone said. With sensitive development, the city could easily accommodate a population of 200,000, he added.
What makes Fontana unusual, if not unique, among California's cities is not the use of redevelopment areas or specific plans, he said. Such tools are widely used by today's sophisticated communities.
Instead, it is the concept of equity participation between the city and developers. The city has been able to negotiate agreements with developers to provide Fontana with an income stream, just as any private-sector partner would expect.
"In the post-Proposition 13 era, it makes more sense to share in equity and cash flow from large developments than to rely on property tax revenue," Stone said. "While Fontana considers that it is important to provide incentives to the private sector in order to receive new tax revenue, the city only considers itself a real partner when it works together with the private sector to create a new development in which both partners receive equity and cash flow."
Take the massive West End Project, for instance (a lot of cities in the Inland Empire and elsewhere would like to have it.). In this new city within a city scheduled to be built out in the middle of the next decade, Fontana will provide 50% of the capital and receive 25% of the cash flow and 25% of the equity.
The West End project is being developed by veteran Los Angeles-based builders Richard Barclay and Joseph DiIorio, organized as BD Investors.
It's a first-class community, able to compete with Terra Vista and Victoria in nearby Rancho Cucamonga, Stone said. The land plan was designed by the SWA Group of Laguna Beach, a firm that has worked on such prestigious developments as Walt Disney World in Orlando, Fla., Newport Beach Center and Fashion Island in Newport Beach, the Arco Towers in downtown Los Angeles and Allen Center and Inn on the Park in Houston.
Bounded by the Devore Freeway (Interstate 15) and East Avenue on the west, Foothill Boulevard on the south and the Southern Pacific tracks on the north and east, the development has a marketing name of "The Heritage," has about 1,300 acres and will eventually contain 3,750 housing units ranging from rental apartments to estate homes. It also will have 100 acres for office and institutional uses, 270 acres of business parks, 37 acres of commercial, 60 acres of parks, schools, libraries, police and fire stations and a community center, according to John B. Stephenson of BD Investors.
DiIorio has been involved in several other master-planned communities in California and elsewhere, including Columbia, Md., perhaps the first of the new breed of American "new towns" that include Reston, Va., The Woodlands, Tex., near Houston, Westlake Village, Valencia and Irvine. Barclay, founder of Barclay Hollander Curci, has developed such projects as Mountaingate, Santa Monica Business Park, LAX Business Center and Westside Towers in his more than 30 years in the business.
"Fontana is doing large-scale land planning in such a way to ensure economically and environmentally sound results," DiIorio said. "We are creating a pleasant community with affordable housing in a convenient location."
A second partnership in the largely undeveloped northern sector of Fontana is in the 14-square-mile redevelopment area. The city's redevelopment agency is developing a 145-acre senior citizen master-planned community on the site of the old Gilfillan Airport.
Joint venture partners are Westech Universal Capital Corp., Beverly Hills, and U .S. Care, Marion, Ind., Stone said. The $150-million project will include 1,100 rental units, estate housing, a golf course and a 15-acre shopping center, and is expected to be completed over the next 10 years.