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Agreement to put OIA under Local Control Tops 2015 Inland Empire Business Stories

The World Logistics Center battle in Moreno Valley, the ongoing Colonies Crossroads corruption case and the end of the Fresh & Easy grocery chain were among the top local business stories that generated headlines, and some controversy, during the past year.

Two thousand and fifteen will probably be remembered in the Inland Empire as the year Los Angeles agreed to hand over control of Ontario International Airport.

After a five-year legal dispute between Los Angeles World Airports and the city of Ontario, Los Angeles officials announced in August that the city – which has owned the airport since 1985 – would return ownership of the airport to a local authority.

That announcement was hailed by local authorities. Since the recession hit, they have watched the airport’s passenger count fall to levels not seen since the mid-1980s, although traffic did improve a little bit this year.

Ontario, which filed suit in 2013 to regain control of the airport, accused LAWA of neglecting Ontario International so it could preserve the other major airport it owns, Los Angeles International.

Agency officials denied that charge and blamed the airport’s deterioration on the poor economy.

The Los Angeles City Council earlier this month approved a $250 million agreement that will transfer control of the airport. All that remains is for the Federal Aviation Administration to approve the agreement, which is expected to happen next July.

While Ontario settled its airport battle, another dispute raged in Moreno Valley, although this one didn’t involve an airport but a massive warehouse-distribution project.

With a 3-2 vote, the Moreno Valley City Council in August approved the World Logistics Center, which at buildout will cover 40.6 million square feet, or roughly 700 football fields. The project, which will be built by Moreno Valley developer Highland Fairview, will take at least 15 years to complete.

The World Logistics Center sparked a fierce debate among local residents. Its proponents said the region can’t afford to turn down the estimated 20,000 jobs it will create, but opponents argued that the project will add to the region’s air pollution and traffic problems.

Multiple lawsuits have been filed against the mega-development, and the Riverside City Council voted in September to sue if Moreno Valley didn’t further address the environmental concerns associated with the project.

Moreno Valley council members also ruled that a referendum on World Logistics Center will not be placed on the local ballot, but some residents have started a petition drive that would subject the project to a citywide vote.

Another major business story broke in the Inland Empire during 2015, but this one caused no protests, only shouts of joy from local officials.

Fisker Automotive announced in August that it had leased a 556,670-square-foot building on Perris Road in Moreno Valley that it will use to manufacture its electric-hybrid vehicles.

The lease is reportedly for 30 years and the project is expected to create about 150 manufacturing jobs. The following month, Fisker Automotive announced it was changing its name to Karma Automotive.

After years of sitting vacant, one of the Inland Empire’s most valuable commercial parcels finally saw some development in 2015.

Workers have begun grading on the 243-acre parcel in Ontario owned by the Meredith Family Trust in Orange County. The property, which bumps up against Interstate 10 between Vineyard and Archibald avenues, will be home next year to an Audi automobile dealership and the first West Coast warehouse-distribution operation to be operated by QVC, the television shopping network.

Ontario officials originally wanted the Meredith Property to be used exclusively for mixed-use development with an emphasis on Class A office buildings, but changed course because of the recession and the slowdown in the local office market.

About 100 acres of the Meredith site remain set aside for mixed-use, according to city officials.

The Colonies corruption case continued to play out in San Bernardino County Superior Court during 2015. In the latest development, on Dec. 18, Judge Michael Smith agreed to postpone the start of trial from next February to Oct. 17 so that one of the defense attorneys in the case may deal with a medical issue.

Smith took that action rather than split the defendants into multiple trials, citing the seriousness of the charges and the complexity of the case.

Rancho Cucamonga developer Jeff Burum, former San Bernardino County Supervisor Paul Biane and two other one-time county officials are charged with multiple felonies. They are alleged to have paid bribes through what prosecutors allege were bogus political action committees.

The payments, which the defendants maintain were legal campaign contributions, helped bring about construction of the Colonies Crossroads retail-residential project in Upland, which Burum developed, according to prosecutors.

Fresh & Easy, the UK retail chain that entered the hyper-competitive Southern California supermarket industry amid much hope and optimism, officially called it quits this year after announcing in October that it was filing bankruptcy for the second time.

Fresh & Easy opened its first U.S. store in Hemet but immediately struggled to find a niche. The chain’s remaining 97 stores – it peaked at about 300 – were closed by mid-November and approximately 3,000 people lost their jobs, according to multiple reports.

Haggen, the Bellingham, Wash. grocery store chain, made a major expansion into California earlier this year – including five in the Inland Empire – but failed to become competitive. It also filed for bankruptcy in 2015 and is currently selling most of its properties, according to reports.

However, while Fresh & Easy and Haggen were floundering in Southern California, a third change was getting ready to try its luck in that hyper-competitive market.

Aldi, the discount chain that operates about 10,000 stores worldwide, plans to open 45 stores in Riverside, San Bernardino, Los Angeles and Orange counties by the end of 2016. That expansion will create about 1,000 jobs, according to company officials.

The Inland Empire’s industrial market performed so well this year that brokers were sometimes in danger of running out of superlatives when trying to describe it. “Red hot” and “unprecedented” were some of the adjectives they came up with, and a look at the market numbers shows why.

An estimated 16.3 million square feet of industrial space was absorbed in Riverside and San Bernardino counties during the first nine months of this year, with the region’s vacancy rate a mere 4.2 percent during the third quarter, according Colliers International.

Colliers also reported that more than 19 million square feet of industrial space was under construction in the Inland Empire during the third quarter. Given the state of the economy and the amount of imports passing through the ports of Los Angeles and Long Beach, there’s every reason to believe the Inland Empire industrial market will continue to grow in 2016.

In November, Minneapolis-based Target announced it will close 13 stores nationwide next January, and that one of those stores is in Victorville.

The store, at 15321 Palmdale Road, has been in business since 1987 but it is being shuttered for underperforming. While the move does leave the shopping center at Palmdale Road and Park Avenue without an anchor tenant, Target still operates two superstores in Victorville and the closing is expected to have minimal impact on the local economy, according to city officials.

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