Foothill Retail Corridor

The new Applebee’s on North Citrus Avenue just south of Alosta is set to open on or about August 8, 2011. As the sign indicates, they are now taking applications. Call the number for more information.

Santana’s Mexican Food will be adding their 13th location at the site of the former Arby’s at 700 E. Alosta Avenue, just west of Citrus Crossing Shopping Center. Evidently there is a huge demand for Mexican fast food in the area given the large number of eateries in the immediate vicinity. Being a huge fan of the cuisine, it is my goal to try them all!

The Azusa City Council recently gave Applebee’s a $200,000 loan in order to entice them to open on the currently vacant pad at Citrus Crossing. The store will be approximately 5,700 square feet and is slated to open in the Spring of 2011.

With Azusa Pacific University located across the street and the lack of restaurants around, Applebee’s will likely be a big hit for the community.



Introduction

Azusa is an 8.9 square mile city located in the northeastern portion of Los Angeles County at the base of the San Gabriel Mountains. Like the other cities along the Foothill Retail Corridor, there is a gentle slope from south to north heading toward the mountains.

The city was incorporated December 29, 1898. The source of the name Azusa probably derives from the Tongva name Asuksagna, but the legend is that it means “everything from A to Z in the USA.”

California State Route 39 (aka, Azusa Avenue) runs north and south from the southern end of the city deep into the San Gabriel Mountains and into Angeles National Forest, which makes Azusa a very well traversed city for people seeking recreation in the mountains. This is a beautiful benefit to Azusa, but it also limits Azusa’s expansion north because the San Gabriel Mountains line the north border of Azusa. So although Azusa is urban, it takes only a few minutes to feel completely secluded in nature. Alosta Avenue and Foothill Boulevard run east and west through the city. Although decommissioned now, Foothill Boulevard was at one time better known as Route 66, America’s Highway.

Economic Forces

Azusa has many large employers from manufacturing plants to large academic institutions. As seen in Table 1, 13 of the top 18 employers in the city of Azusa are manufacturing. The government and educational services are also heavily prevalent in Azusa.

Table 1: Azusa - Largest Employers

Although manufacturing has the most companies employing people, educational services and health care and social assistance have the highest percentage of employment (19.8%) in the city (Table 2).

Table 2: Azusa Industry Profiles

Education

Azusa has multiple educational institutions. The Azusa Unified School District offers public schooling for children grades K-12. It consists of 11 elementary schools, 3 middle schools and 3 high schools. Azusa also has a Catholic elementary school (K-8), St. Frances of Rome School, as well as a Christian Elementary School, Light and Life School. Azusa Pacific University is a four year Christian University with over 10,200 students, faculty and staff. Immediately adjacent to Azusa Pacific University to the north is Citrus College, a community college located in Glendora, with over 11,000 students, faculty, and staff.

Table 3: Azusa Educational Attainment

Transportation

When it comes to transportation Azusa has many accessible transport systems, and there are plans to improve. Interstate 210 (aka, the “Foothill Freeway”) runs east and west through the middle of the city. The city is also very close to both the 57 and 605 freeways (both less than 5 miles depending on what part of the city you are in). Azusa is also serviced by multiple bus routes with service provided by both the Metropolitan Transit Authority (“MTA”) and Foothill Transit.

Table 4: Azusa Commuter Profile

In addition, the construction has begun on the Metro Gold Line Foothill Extension from Pasadena to Azusa. This extension will add two stops in Azusa, which will connect Azusa with light rail to downtown Los Angeles. One of the stops will be across from the new Target at North Azusa Canyon Road just above Foothill Boulevard, the other will be at North Citrus Avenue and near West Foothill Boulevard. Eventually the Gold Line will connect to Ontario Airport.

An image depicting the Gold Line from downtown L.A. to Azusa is shown in Figure 1.

FIGURE 1

Source: Metro Goldline Foothill Extension Construction Authority



Environmental Forces

As indicated earlier, Azusa is located at the base of the San Gabriel Mountains to the north, and the western boundary of Azusa is the San Gabriel River. These natural boundaries and the fact that the city is bordered by the cities of Glendora on the east, Duarte and Irwindale to the west and southwest, and Covina to the south, make future retail development in the city limited to redevelopment of existing properties.

Azusa has a similar climate to all cities along the Foothill Retail Corridor. On average July and August are the two highest months with average highs reaching 89 degrees, and February is the rainiest month. December is the coolest month with an average low of 41 degrees.

Demographics

Azusa is a city of 46,672 people and continues to grow. In Table 5 the social forces of Azusa are illustrated, as well as the data for Los Angeles County in order to give a sense of comparison to how Azusa compares to the rest of the county. The city has a young population, which may be due in large part because of Azusa Pacific University. As seen in Table 5 the homeownership rate is 52% and the people per household is 3.41. People below the poverty rate are about 2.5% higher in Azusa than the average in Los Angeles County. Median household income is just over $53,000 per year.

Table 5: Azusa Demographic Profile

Redevelopment

The Redevelopment Agency of the City of Azusa put together a five year implementation plan in 2009 for the period beginning in 2010 and finishing in 2014. Following are summaries for the various redevelopment districts.

Downtown North: Complete Disposition and Development Agreement with developer and assist in recruitment of retail and restaurant uses.

Block 36 Development: Complete planning process for Block 36 improvements and finalize Disposition and Development Agreement with developer. Block 36 is located at the southeast corner of Azusa and Foothill and is show in the picture below.

Block 37 Development: Continue to provide recruitment and retention assistance to businesses.

Arrow & Azusa: Reevaluate development opportunities as economic conditions improve and solicit developer and tenant interest.

Costco East: Work with Costco, Northrop, S&S Foods and other surrounding businesses to develop economic strategy for expansion project.

Enterprise Site Reuse: Evaluate the acquisition and reuse potential of the site on Azusa Avenue (south of the 210 Freeway) and consolidation with existing Agency property.

D-Club Site Reuse: Evaluate development opportunities as economic conditions improve and solicit developer and tenant interest.

Foothill & Dalton Mixed Use: As economic conditions improve, work with developer to proceed with entitled improvements.

Capital Improvements: During the next five years, the Agency will assist in the funding of selected capital projects and public improvements such as the Block 37 parking structure at 6th Street and San Gabriel and the Gold Line parking structure.

Retail Forces

Potential retail expenditures for residents of Azusa (Table 6) comes from a 2008 study done by the U.S. Department of Labor. In this particular table, it assumes the average median household income in Azusa is $39,191 therefore the income bracket of $30,000-$39,999 is used. To get the average annual expenditures the total number of households in Azusa was multiplied by household expenditure in this bracket.

Table 6: Azusa Retail Expenditures

Table 7 illustrates the retail trade that is going on in Azusa. The information comes from the U.S. Census Bureau Economic Census of 2007. Looking at the 2002 economic census, there have been positive increases in retail trade in the five years in between. The number of establishments increased from 87 to 96, and total sales volume increased from $337,056,000 (2002) to $426,971,00 (2007).

Table 7: Azusa Retail Expenditures by NAICS Code

Azusa Retail Real Estate

Location - Most of Azusa’s retail properties are located along Foothill Boulevard (which becomes Alosta just west of Citrus Avenue), Azusa Avenue, Arrow Highway and Citrus Avenue. These are the main thoroughfares in the city, and consequently have the highest traffic counts. There are also smaller retail properties on Gladstone.

Inventory –  There is approximately 1.3 million square feet of retail space in the city of Azusa ranging from single tenant net leased properties and unanchored strip centers to the largest retail property, Citrus Crossing, a power center located across the street from Azusa Pacific University. Citrus Crossing and APU together have caused the intersection of Citrus Avenue and Alosta Avenue (Route 66) to become the retail epicenter of the city. The total inventory of 1.3 million square feet does not include automotive use, gas stations,

Construction – There has been virtually no new construction in the city in the last five years, other than the 190,000 square foot Target which opened in October 2010. Citrus Crossing was a major redevelopment project by Trachman Indevco, which took a very tired shopping center and turned it into the retail hub of the city.

Vacancy –  The historical vacancy rate in the last five years for Azusa has ranged from a low of 2% in the second quarter of 2007 to a high of 8% in third quarter 2009. The current rate is about 4%, with most of the vacancy occurring in older class C properties. The addition of the new Target with 160,000 square feet has had an impact on the vacancy and absorption numbers.

Absorption – Absorption has ranged from a low of -30,000 square feet in third quarter 2009, to a high of 20,000 square feet in first quarter 2007. The low figures on absorption is due to the lack of developable land in the market.

Rental Rates – Rental rates range from a low of about $11.00 per square foot per year to a high of about $30.00. Citrus Crossing commands the highest rental rates for shop space, whereas the lowest rental rates are found in the unanchored centers in the southern portion of the  city.

Citrus Crossing – This community center (pictured below) is approximately 170,000 square feet and features anchor tenants Fresh & Easy, Kragen Auto Parts, a 99 Cent Only Store, CVS Pharmacy, Regency 10 Theatres, and Ross. Inline tenants include Kelly’s Coffee, Panda Express, Jamba Juice, Pinkberry, Chipotle, and Payless Shoes. There are plans are to build an Applebee’s on the pad along Citrus Avenue.

Edgemont – Located at the northwest corner of East Gladstone Street and South Azusa Avenue, this 158,699 square foot shopping center lacks a credit anchor, and the asking rent of $1.50 per square foot triple net reflects that, as well as a lower traffic count.

Azusa College Center – Anchored by Stater Bros. and Starbucks, this nearly 71,000 square foot neighborhood center also has a Dollar Bill Store, a Subway, a cleaners, and a Marie Callendar’s on the northwest corner of Barranca and Alosta. Asking rents for this center are about $1.95 per square foot per month, triple net.

Costco – Wholesale retailer Costco is located on the western edge of Azusa on Foothill Boulevard. This big box store is approximately 111,000 square feet, and has its own brand gasoline station on a pad along Foothill Boulevard.

Target – Opened in October 2010, this store is nearly 190,000 square feet and features 39 rows of groceries, and a Starbucks. What is unique about this store is that the sales floor is on the second level above the ground floor parking. Access is easy via an elevator or an escalator. When customers are done shopping, they can put their carts on a separate escalator going down.

Authors:

Austin Gordon, Senior Economics Major, Azusa Pacific University

Ken Rhinehart

I stopped by the new Target under construction at 809 North Azusa Avenue the other day and was able to speak to Kurt the construction superintendent. He indicated that the sales and warehouse area comprise about 190,000 square feet.

Target team members were busy working away inside, putting up shelves and stocking them. Outside, workers were finishing details like the red tile on the building and landscaping, all in anticipation of the grand opening on October 9^th.

This two story structure has an innovative approach to land use. The retail sales area is on the second floor and is accessed via elevator or escalator, with a huge parking lot on the ground floor that will be easily accessible from Azusa Avenue going north, San Gabriel Avenue going south, or Ninth Street going east and west. In the near future, Metro Gold Line riders will be able to get off at the Azusa-Alameda station directly across Azusa Avenue.

I anticipate the new Target and eventually the Azusa-Alameda Gold Line station will be driving forces increasing the number of shoppers to the area which will have an overall beneficial effect on the downtown Azusa retail area around Foothill Boulevard, approximately two blocks south of the new Target and Gold Line station.

Azusa’s brand new $465,000 welcome sign and reader board is now up and running. The sign was paid for out of Azusa Redevelopment Agency funds, and includes an updated logo at the very top.

The new sign, at the same site as the old one at Azusa and the 210 freeway, has an electronic display that measures 12 feet by 36 feet, and can be controlled from a remote location.

In my previous post I listed Los Angeles regional closures and layoffs. While that post indicates a Los Angeles region that is still suffering major job losses, a closer look at the cities that comprise the Foothill Retail Corridor (“FRC”) presents a healthier job situation overall, but with a wide disparity within the FRC communities.

Comparatively, the FRC has a lower unemployment rate (9.3%) than Los Angeles County (13.4%) and California (12.8%), but is closer to the national average of 9.7%. However, the cities that comprise the FRC range from a very low 4.1% in Sierra Madre to a high of 14.5% in Azusa.

Please note that these numbers are from the government and they may not add due to rounding. And, I have no idea how the city of Bradbury can have an employment base of 500 with all 500 employed and still achieve an unemployment rate of 8.1%! As they say, close enough for government work.

Monthly Labor Force Data - July 2010

CDP is “Census Designated Place” – a recognized community that was unincorporated at the time of the 2000 Census.

Source: California Economic Development Department

The extension of the Gold Line from Pasadena to Azusa is set to have its official ground breaking on Saturday, June 26 at 10:00 AM at Newcastle Park (101 West Colorado Boulevard, just west of Santa Anita) in Arcadia.

A lot has been happening on this project, even though you don’t see anything right now.  In October, Metro adopted their Long Range Transportation Plan which included funding for Phase 2A of the Gold Line extension. Phase I was from downtown L.A. to Pasadena; Phase 2A is from Pasadena to Azusa; Phase 2B is from Azusa to the transit center in Upland; and eventually Phase 3 will run from the transit center to Ontario Airport.

In March the Metro board approved the Funding Transfer and Master Cooperative Agreements. This essentially assured over $800 million toward the project between 2010 and 2019.

Here is a project that has gained my attention for a few reasons. I’ve always loved trains, and it is quite enjoyable to take the Gold Line to the beautiful and historic Union Station in downtown L.A. (From there it is a short walk to Phillipe’s, home of the original French dip sandwich!). But this project has a bit of sentimentality to it. The Gold Line runs along the old Santa Fe right of way. I remember when the Super Chief would pull into the Pasadena station. The Santa Fe rail line was completed in 1887 line and ran from Los Angeles to San Bernardino. Much of the development along the Foothills can be traced to the development of rail stations along the way. The pictures above are of the San Dimas and Monrovia stations today. Hopefully the Monrovia station will be lovingly restored like the San Dimas station. I’m so glad that Pasadena preserved their old station.

Look for transit oriented development to occur near each of the Gold Line stations. Phase 2A will have stops in Arcadia, Monrovia, two in Irwindale, and two in Azusa.

Here is an updated photo of the Target under construction on North Azusa Avenue just north of Foothill, aka, Route 66. This view is looking south on Azusa Avenue at 9th Street. It looks like they are still on schedule for an October opening.