Foothill Retail Corridor

The entry to Duarte heading west along Huntington Drive, formerly known as Route 66.

Introduction

Duarte is a 6.8 square mile city located in the northeastern portion of Los Angeles County at the base of the San Gabriel Mountains, approximately 21 miles northeast of downtown Los Angeles. Like the other cities along the Foothill Retail Corridor, there is a gentle slope from south to north heading toward the mountains, which provides the northern boundary of the city. The San Gabriel River provides the eastern boundary, the city of Monrovia borders the west at Mountain Avenue, and the city of Irwindale borders the city to the south, just below Duarte Road.

The city was incorporated August 22, 1957 and was named after Andres Duarte who was granted 7,000 acres of land in the upper San Gabriel Valley and operated the Rancho Azusa de Duarte. Duarte’s motto is “The City of Health,” as it is host to several parks and recreation areas, as well as the world-renowned cancer research center, City of Hope.

The following is a short description of the various forces affecting the Duarte retail market, including Economic Forces, Education, Transportation, Environmental, Demographics, Redevelopment, and a brief discussion about the Retail Market itself.

Economic Forces

True to its city motto, “The City of Health,” Duarte’s largest employer is the cancer research center, City of Hope, which employs over 3,500 people on its park-like campus. City of Hope is one of only 41 National Cancer Institute-designated Comprehensive Cancer Centers, which provides both patient care and research. WalMart (270 employees), Target (183 employees) and CarMax (187 employees) are the top retail employers in the city. Duarte School District, GE Aviation, We Pack It All and TheraPack round out the city’s top employers. Duarte was recently named “Most Business-Friendly City” by Los Angeles County Economic Development Corporation, for cities under 60,000 residents.

Table 1: Duarte - Largest Employers

City of Hope Campus on Duarte Road

Table 2: Duarte Industry Profiles

Educational services, and health care and social assistance accounts for the largest percentage of employees at 26.2%, with retail trade the next largest with only half the number of employees, or 13.0%. As stated previously, City of Hope is the largest provider which accounts for the majority of the 26.2%. Professional, scientific and management and administrative and waste management services is the third largest industry classification, with over one thousand employees (12.3%). Duarte has a small manufacturing base with about 924 employees (10.5%). (Note: Discrepancy in number of employees is due to different data sources.)

WalMart, CarMax and Target are the three largest retail employers in the city of Duarte.

Education

The Duarte Unified School District offers public schooling for children grades K-12. It consists of 5 elementary schools, one middle school and one high school and one continuation high school. Duarte has no universities or colleges, but is very close to Citrus College (a two year community college) and Azusa Pacific University in the neighboring city of Azusa.

Table 3: Duarte Educational Attainment

Over sixteen percent of Duarte residents have a college degree, indicating a fairly educated workforce, but only one-third of the residents have graduated from high school.

Transportation

When it comes to transportation Duarte has many accessible transportation 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). Duarte is also serviced by multiple bus routes with service provided by both the Metropolitan Transit Authority (“MTA”) and Foothill Transit.

Table 4: Duarte Commuter Profile

Huntington Drive and Duarte Road are the main east-west thoroughfares and are heavily used during peak hours by commuters trying to avoid the 210 Freeway. Interstate 605, which runs north-south, terminates in Duarte via Mount Olive Drive. Drivers may enter either the 605 or the 210 via Mount Olive. There are on and off ramps for the 210 at Buena Vista and Mountain Avenues, which are the two main north-south thoroughfares in the city.

The nearest airport to Duarte Bob Hope (Burbank) Airport, approximately 25 miles west.  Ontario International is about 28 miles east.

In addition, construction has begun on the Metro Gold Line Foothill Extension from Pasadena to Azusa, with stops in Arcadia, Monrovia, Duarte and two stops in Azusa. This extension will connect Azusa with light rail to downtown Los Angeles.

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

There will be one stop in Duarte on Duarte Road, just west of Highland, across the street from the City of Hope campus.

Future site of the Gold Line station in Duarte.

Environmental Forces

As indicated earlier, Duarte is located at the base of the San Gabriel Mountains to the north, and the eastern boundary of Duarte is the San Gabriel River. These natural boundaries and the fact that the city is bordered by the cities of Monrovia on the west and Irwindale 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 warmest 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

Duarte is a city of 21,321 people with virtually no population growth between the 2000 and 2010 Census. In Table 5 the social forces of Duarte are illustrated, as well as the data for Los Angeles County in order to give a sense of comparison to how Duarte compares to the rest of the county. The city has a much higher home ownership rate compared to the county, but has a lower median value of owner-occupied housing units. The median household income in Duarte is slightly higher than the county, and the city has a lower poverty rate than the county.

Table 5: Duarte Demographic Profile

Redevelopment

Effective February 1, 2012, all redevelopment agencies in the state of California were dissolved, and were replaced by Successor Agencies. Also, all assets and properties of the former RDAs that were funded by tax increment were to be expeditiously disposed of. An Oversight Board membership was to be appointed by May 1, 2012. The Oversight Board’s responsibility is to direct the Successor Agency to determine whether contracts, agreements or other arrangements between the former RDA and private parties should be terminated or renegotiated to reduce the Successor Agency’s liabilities and to increase net revenues to the taxing entities.

The City of Duarte owns 26 parcels throughout the city. Of note are two parcels, one at the northwest corner of Buena Vista and Huntington where Hopkins Real Estate Group has plans to develop a 5,000 square foot Five Guys Burgers.

Potential future site of Five Guys Burgers.

Just east of Buena Vista on Huntington Drive, is a site that is now vacant but was formerly occupied by a Burger King restaurant which was torn down after the Redevelopment Agency acquired the property, potentially for affordable housing.

Former Burger King acquired through eminent domain by the Redevelopment Agency of Duarte.

Retail Forces

Table 6 illustrates the retail trade that is going on in Duarte. Clearly, CarMax and Performance Nissan have contributed greatly to the city’s retail sales base due to the sale of large ticket items like cars. WalMart and Target would fall into the category of general merchandise stores, and those sales numbers have been withheld, however, they are included in the total dollar amount.

Table 6: Duarte Retail Expenditures by NAICS Code

Duarte Retail Real Estate Market

Location - Most of Duarte’s retail properties are located along Huntington Drive (which becomes Foothill Boulevard when it enters into Irwindale at the eastern border), with additional retail along Mountain Avenue, Duarte Avenue, and Buena Vista. These are the main thoroughfares in the city, and consequently have the highest traffic counts.

Inventory –  There is approximately 1.12 million square feet of retail space in the city of Duarte ranging from single tenant net leased properties and unanchored strip centers to the largest retail property, Mountain Vista Plaza at over 167,00 square feet. The total inventory does not include automotive use and gas stations.

Construction – The last properties to be constructed in Duarte were the 45,648 square foot Best Buy at 1470 Mountain Avenue, and the 11,087 square foot strip retail center adjacent to Best Buy at 1430 Mountain Avenue. Both of these properties finished construction in the second half of 2009. Any new construction in the city will most likely be limited to redevelopment of existing properties. Presently, at the northeast corner of Buena Vista and Central, there are plans for construction of approximately 10,950 square feet of retail on the site currently occupied by Performance Nissan’s used car lot. Plans call for a 6,700 square foot building including a 4,200 square foot fast food drive through, and a 4,250 square foot building which may include  1,250 square foot Starbucks. A 99 Cent Only Store was built from an existing structure which was essentially rebuilt from the slab up. The store opened in March 2012 at 1327 E Huntington Drive.

Vacancy –  The historical vacancy rate in the last three years for Duarte has ranged from a low of 3% in the third quarter of 2012 to a high of 5.5% in third quarter 2011. The current rate is about 3.25%, with most of the vacancy occurring in older class C properties. Fresh & Easy anchors a 34,710 square foot shopping center which has the largest spaces currently available, including a 6,000 square foot space and a 3,600 square foot space. Both spaces have been on the market for quite some time and the owner recently lowered the asking rent for the space.

Absorption – Absorption has ranged from a low of -12,780 square feet in fourth quarter 2010, to a high of 25,960 square feet in fourth quarter 2009 when the new Best Buy opened. Net absorption year to date is just over 3,000 square feet. At this rate, it will take approximately two years to absorb the current vacant space.

Rental Rates – Rental rates range from a low of about $1.16 per square foot per month to a high of about $3.00 for two spaces at 1430 Mountain Avenue, adjacent to Staples and Best Buy.

Major Shopping Centers

Mountain Vista Plaza – Anchored by a 112,000 square foot Target, this center has several inline shop spaces including a Chase Bank branch, and several non-national tenants. A Sonic Burger and a Denny’s are located on outparcels. The center has the benefit of a signalized entrance from Huntington Drive. Total square feet is approximately 167,000 square feet, including the Denny’s and Sonic Burger.

WalMart – A WalMart store is located at 1600 S Mountain Avenue, just below the 210 Freeway, which has on and off ramps in both directions at Mountain. This particular WalMart has a pharmacy, vision center, and auto center, as well as a large selection of groceries. The store is 146,165 square feet.

WalMart on Mountain Avenue in Duarte.

Buena Vista Marketplace - This a 136,887 square foot grocery anchored shopping center located on Huntington Drive and is the dominant grocery anchored shopping center in the city. Tenants include Starbucks, SCE Credit Union, UPS Store, Ralphs, Dollar Tree, Hertz, Jamba Juice, and Wells Fargo.

Buena Vista Marketplace

Conclusion

Duarte is well situated in the northeast portion of Los Angeles County, at the base of the San Gabriel Mountains, and is easily accessible to all portions of the County via the 210 Freeway. The expansion of the Gold Line from Pasadena will enhance Duarte’s visibility and desirability as a place to live, giving commuters an alternative means to downtown Los Angeles. There is little room for major new retail construction, which contributes to Duarte’s retail vacancy rate being so low.

A lot has been happening at the northeast corner of Huntington Drive and Buena Vista, with the opening of the 99 Cent Only Store and now The Slaw Dogs. I stopped by The Slaw Dogs soft opening on March 26, had a great hot dog, met Ray, his wife, and son. I had a difficult time selecting my hot dog, but went with the Original, and loved every bite! While I ate, I decided on my next visit I’m going to get The Green Monster, with roasted green chile, chipotle mayo, grilled onion, pepperjack, and spicy garlic salsa.

This is The Slaw Dogs third location, with one in Pasadena and one in Woodland Hills. The space at 1355 Huntington Drive was formerly occupied by The Great Onion, who moved a few blocks east to 2150 Huntington Drive in a larger location.

The space was formerly occupied by The Great Onion. Note the addition of the patio to the site in the first picture.

The 99 Cent Only Store at 1327 E Huntington Drive in Duarte finally opened on March 15th with all the fanfare that has come to accompany the opening of these stores. The first nine customers in line were able to purchase a Phillips 22″ flat screen TV, a $230 value, for only 99 cents. The next 99 customers were able to purchase a scooter for 99 cents.

The location was previously occupied by a video store, then, for a short while, a Goodwill donation center, before the nearly complete rebuilding of the structure, including a new roof and facade.

Founded in 1982, 99 Cents Only Stores® currently operates 295 extreme value retail stores consisting of 217 stores in California, 36 in Texas, 29 in Arizona, and 13 in Nevada. 99 Cents Only Stores®emphasizes quality name-brand consumables, priced at an excellent value, in convenient, attractively merchandised stores. Over half of the Company’s sales come from food and beverages, including produce, dairy, deli and frozen foods, along with organic and gourmet foods. The 99 Cents Only Stores chain was acquired by Ares Management and the Canadian Pension Fund Investment Board for $22 per share in October 2011.

Duarte – Two 1,404 square foot spaces available, including one end cap. Each space is $2,200 per month, or about $1.57 per square foot per month. May be rented together or separately.

Easy access, good street frontage and visibility, with over 28,000 vehicles per day along Huntington Drive. Adjacent to Fresh & Easy, CVS Pharmacy, and Mount Olive Drive on/offramp of the 605 Freeway.

Permitted uses included auto parts, financial services, restaurants, fast food, maintenance and repair services (other than vehicle), postal and mailing services, printing and duplicating services, dance or martial arts studio, urgent care clinic, dentist office, medical supplies, and other uses with a conditional use permit. (Lessee to verify uses.)

Call Ken for tour of space (626-737-9079).

Summer is winding down and but there is enough time to get in one more parade, picnic and car show. Duarte will be celebrating its 53rd Anniversary on Saturday, September 18th with a parade down Huntington Drive (aka, Route 66) and a picnic at Royal Oaks Park after the parade. The parade grand marshall will be Jordan Romero, the 13 year old who recently climbed Mount Everest!

Along with dozens of vintage cars on display in the park, there will be an arts and crafts show, over 40 food and display booths (can you say Kettle Corn!), and live music.

I will be there to eat some food and view the cars, like this Corvette that was on display at the La Verne Cool Cruise this last spring. More information may be found at www.DuarteRoute66Parade.com.

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.