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Modern Advice: : Go East, Young Business Person

October 05, 1989|IRENE CHANG | Times Staff Writer

After being in Monterey Park for 20 years, Robert Cope's computer services business was bursting at the seams.

Auto-Graphics' cramped quarters in the 700 block of Monterey Pass Road was half the space that the $10-million-a-year business needed, Cope said, and, besides, it was too far away from Ontario International Airport, which he preferred over Los Angeles International to ship products.

The move east to a business park in Pomona was "110% positive," Cope said, especially because it meant half as long a commute, against traffic, for his 150 employees, most of whom live in the eastern San Gabriel Valley.

For Philip Vaughan, a manufacturer of drafting equipment, it was available, cheap property that lured him to San Dimas from Pasadena, where there is almost no vacant industrial land and where construction costs are among the highest in Los Angeles County.

"It's the only way you can go if you have to move," he said. "There's no contest."

Bargain Rates

Slowly, the east San Gabriel Valley is becoming a mecca for businesses suffocated by the squeeze of development on the west. To some, moving to the east means bargain rates for large tracts of industrial and office space. To others, it simply means following upscale residential growth that's taking place in the bedroom communities of Walnut, Diamond Bar, Hacienda Heights, Rowland Heights and Glendora.

The Southern California Assn. of Governments predicts that by the year 2010, the number of jobs and people in the east valley, from the San Gabriel River Freeway (605) east to the Los Angeles County line, will have grown more than twice as much over 25 years than in the west valley.

According to a SCAG forecast to be released this month, areas likely to witness the most development are San Dimas, where SCAG predicts that the population will grow 103% between 1984 and 2010 and where 55% more jobs will be created in the same time period; La Verne, where the population and employment will increase by 79% and 39%, respectively, and Walnut, where the population will grow 250% and jobs 32%. People are already inching their way eastward. Between 1980 and 1988, population in the east valley grew almost twice as fast when compared to the west; in the east, it climbed from 688,055 to 825,900, a 20% increase, while in the west it grew 11.5%, according to figures from the Los Angeles County Department of Regional Planning.

Jim Center, a senior marketing consultant at the financial consulting firm Grubb & Ellis, said that as land in Pasadena, Monterey Park and Alhambra becomes more scarce, the area east of the 605 Freeway will become the focal point of business activity in the county.

'Hub of the Wheel'

"The 605 and Pomona (60) freeways are like the hub of the wheel, with downtown as the west rim and Ontario (in San Bernardino County) being the east rim," he said.

Casey Griffin, an industrial broker specializing in sales transactions west of the Orange (57) Freeway for Coldwell Banker, said eastward drift is "a natural course of business. Since there's a limited industrial base west of the 605, most new developments are in Walnut, San Dimas, Glendora. In essence there's a greater selection in the east San Gabriel Valley because it's the most recent area to be developed."

There are those on the west who insist that it's not a mass exodus, and the trickle isn't anything to be alarmed about.

"Nobody wants to leave Pasadena," said Bruce Ackerman, executive vice president of Pasadena's Chamber of Commerce. "It's not a burning desire to get out of town."

Although traditional industrial users may be moving east, "there's no reason for the commercial to go out east," said Alhambra Redevelopment Agency Executive Director Michael Martin, arguing that successful businesses that can afford the higher land prices tend to stay in the west.

"One of the advantages of being in an urbanized area is that most retailers looking for quality commercial space like it here because people here are willing to spend money," he said.

Martin added that an eastward drift of industrial companies hasn't hurt Alhambra's economy because for every business that moves from Alhambra to Glendora, there's another moving from downtown Los Angeles to Alhambra, which is still relatively inexpensive compared with downtown.

Nevertheless, the trend worries cities that are losing the businesses. In Pasadena, for example, officials feared that auto dealers, one of the largest generators of sales tax revenue, would be lured eastward to Duarte, Monrovia and Glendora, which boast shiny new auto malls close to the Foothill Freeway.

To entice dealers to stay on Colorado Boulevard, the Pasadena Board of Directors is offering sales tax rebates of up to 50%.

City officials hope that the incentive will reverse a steady decline in sales tax revenue from auto dealers at the same time that the total sales tax revenue has gone up. Auto sales tax revenue in Pasadena slipped from $3.03 million in fiscal 1986-87 to $2.81 million in 1988-89.

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