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Making a Bid for Business in Carlsbad : Industrial Park Is Slowly Developing a Name for Itself

February 16, 1988|KEVIN BRASS

Lacking glass high-rises, large modern sculptures and nightly laser shows, the 3,300-acre industrial and office district near Palomar Airport in Carlsbad is not nearly as noticeable as the Golden Triangle district that sits 20 miles to the south.

The Golden Triangle is easily seen from highways that form its outer boundaries. But many of the buildings near Palomar Airport are tucked into the rolling hills east of Interstate 5.

"You could live in Carlsbad and drive by here every day and never see half of the office buildings," said one local broker.

Local developers prefer to cite the area's "campus-like" environment. And thanks to bike paths and well-manicured lawns and trees, the relatively isolated area does have the feel of a high-tech college campus.

Except it's a very, very big college campus, with more than 3 million square feet of research and development and industrial space and 1 million square feet of office space nestled into the hilly terrain.

Just Beginning

The area is still in its infancy, and the City of Carlsbad expects the 3,300-acre tract, which contains three industrial zones, to include more than 22 million square feet of office, industrial and commercial space by the year 2020.

"This is going to be the business complex of North County," said Michael Dunigan, vice president of The Koll Co., which recently sold its 560-acre Carlsbad Research Center, within what is known as the Palomar Airport industrial district, to Union Pacific Realty Co. for $57 million.

Developers described Carlsbad, which is strategically located between the City of San Diego and Orange County, as a city that is ideally suited to assume the role of a corporate mecca, thanks in large part to its residential housing base along the coast.

It already is home to large corporations, including Chrysler and Hughes Aircraft, as well as smaller manufacturing companies, such as Taylor Made Golf Co.

Many of the companies are transplants from the City of San Diego or Orange and Los Angeles counties. They have been lured to Carlsbad by competitive rents, relatively low land prices, the nearby airport and a relative lack of congestion.

"Industrial land prices are $2- to $3-a-square-foot lower than Rancho Bernardo and $3 to $5 lower than Sorrento Mesa," said Frank Rice, vice-president of Bedford Properties, which is developing the 77-acre Palomar Oaks Business Park, as well as 150,000 square feet of office space in the Palomar Triad complex.

"In Orange County there is a very limited amount of land available under $10," Rice said. "There is ample land in Carlsbad starting at (about) $7."

Set Area Aside

The Carlsbad City Council purposely created the industrial region when it approved the city's General Plan in 1974. An "airport influence area" was established around Palomar Airport, restricting residential development within its boundaries. That zone also encouraged the concentration of industrial and office development in the area, providing a healthy tax base for the growing city.

"Residential development doesn't always pay for itself," said Carles Grimm, Carlsbad assistant planning director. "The city wanted a balance of industrial and residential. And they didn't want the industrial scattered, having an impact on traffic throughout the city."

The city didn't give industrial developers a free rein, however. It imposed a 35-foot height restriction on buildings, and the development fees are "verging on having a negative impact," Rice said.

In addition to normal development fees, builders in the area are required to pay a traffic impact fee, bridge and thoroughfare fees, and a public facilities fee equal to about 2.5% of the building's valuation, to help pay for upgrading local roads, sewers and other public facilities.

Local developers love to grumble about the high fees, but they also acknowledge that Carlsbad seems to have passed through the most intense of the slow-growth debate that has bogged down development elsewhere in San Diego County.

Growth-Management Plan

In 1986, the Carlsbad City Council passed a growth-management plan that effectively tied the rate of growth in the city to the construction of public facilities. A hard-fought debate within the community later the same year over two slow-growth ballot measures resulted in the City Council adopting the council-sponsored initiative, which establishes population caps in different areas of the city.

"The city has grabbed the bull by the horns in dealing with growth," said Rice of Bedford Properties. "It's not perfect, but the ground rules have been clearly established."

And, the restrictions and fees have produced benefits. The city is using fee income to turn Palomar Airport Road into a six-lane highway that includes an 18-foot-wide median strip and bike lanes.

That road connects with El Camino Real, which like Palomar Airport Road, has been designated as one of the city's two "prime arteries."

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