Southwest Riverside County is continuing to claw its way back from the “Great Recession,” city and industry leaders agreed last week at a regional economic forum.
That continuing economic improvement, the eight speakers agreed, signals solid gains over last year and a major recovery over the past five years.
“We are proceeding with caution,” Aaron Adams, Temecula city manager, told audience members at the $40-per-person breakfast event. “The numbers are looking very good and we are cautiously optimistic.”
Adams’ upbeat analysis was echoed, in turn, by representatives of Murrieta, Menifee, Wildomar and Lake Elsinore. His report – which followed presentations by experts in the housing and retailing industries, was in sharp contrast to his remarks at the same event five years earlier.
Adams was an assistant city manager when he participated in the forum that the Temecula Valley Chamber of Commerce called “Surviving 2009.” That forum, which took place about six months after the start of a vexing recession, featured John Husing, a prominent Inland Empire economist, as the keynote speaker.
In his remarks to the 2009 participants, Husing identified a few economic glimmers amid the tenacious gloom. But Husing also warned his audience that an economic rebound wouldn’t happen anytime soon, possibly not before the year 2012.
That 2009 forum, which attracted about 250 business and government leaders, was held at the Pechanga Casino. The casino was also the site of last year’s forum, which centered on a comprehensive report done by economists affiliated with Claremont McKenna College and the UCLA Anderson Forecast.
At that forum, a trio of experts advised that a rebounding housing market offered a ray of hope amid an otherwise dull economic outlook. The 88-page report noted that some desert communities and the cities near San Diego, Orange or Los Angeles counties had regained some of their economic footing.
The 2013 presentation cited solid job gains for Temecula and Murrieta, but the speakers noted many Inland Empire cities had yet to gather speed in the recovering economy.
By comparison, last week’s presentation featured a bullish tone that was buttressed by declining unemployment, surging retail sales and steady increases in the issuance of residential and commercial building permits.
Last week’s forum, which was held at South Coast Winery, attracted about 245 participants. Its focus was “developing opportunities.”
Some of the speakers peered into the future, as Adams and others predicted that several years of growth will come on the heels of the recession.
Temecula’s sales tax revenues – which fund a major share of that city’s operating costs – will continue to climb through the 2017-18 fiscal year, Adams said. The 2016-17 fiscal year should see the city surpass the $30 million record sales tax receipts that it netted 2005-06, he said.
The rebound is in sharp contrast to the approximately $22 million sales tax total that Temecula reported in 2009-10, according to a chart that accompanied Adam’s remarks.
Another Temecula chart showed that construction-related tax and fee revenues have increased 34 percent. Tax receipts also climbed 7.5 percent in automobile and transportation spending, 6.8 percent in the restaurant industry, 2.7 percent in fuel sales and 1.9 in consumer goods, according to the city’s presentation materials.
Temecula’s unemployment has fallen from nearly 10 percent in April 2010 to 5.6 percent last April, records show. In contrast, California’s unemployment rate was 7.3 percent in April and Riverside County’s jobless rate was 8.3 percent.
Adams said Temecula has added 1,000 new jobs as the economy as recovered. He attributed many of the new jobs to company openings, expansions or relocations. About 450 of those jobs can be traced to the opening of the Temecula Valley Hospital, which boasts a $40 million annual payroll and will eventually be flanked by four medical office buildings that are currently proposed or under construction.
Other city managers were equally optimistic during their presentations.
Menifee City Manager Rob Johnson reeled off a number of retail projects that have been recently completed or are in the planning or construction stages.
“There are great things coming for the city of Menifee,” Johnson said. He described his 46-square-mile city as a “sleeping giant” that is beginning to stretch and grow.
A pending phase of the Menifee Town Center, which flanks busy Newport Road, will feature housing, a theater, bowling alley, sports bar, court house and civic center, he said.
The median age of Menifee, which includes the Sun City senior enclave, was 58 when the sprawling community became a city about six years ago, Johnson said. Since incorporation, Menifee’s median age has steadily dipped to 37, he noted.
“So you can see, we’re radically and dramatically changing,” Johnson said.
The upbeat presentations came just ahead of nationwide employment data that showed the American economy has finally recovered all the jobs lost to the Great Recession. For the first time since 1999, American employers added more than 200,000 jobs a month for four straight months, according to the U.S. Bureau of Labor Statistics.
Several of the speakers cited trends they expect will strengthen as the generation known as the “Millennials” wields a greater influence on the economy. That group, those born between 1982 and 2003, represents 27 percent of the U.S. population and is the largest generation in history, said Paul Marra, a senior principal at the San Diego office of Keyser Marston Associates.
That generation is deferring home ownership, marriage and families. It relies heavily on technology and public transportation, and many in that age group will forgo owning their own cars, he said.
He said Old Town Temecula has been transformed since his firm was hired by the city in 1998 to help chart the future of the historic business district.
“What’s happening there is quite amazing and it’s got more potential,” Marra said.
He said the same transformation is expected in the city’s aging Jefferson corridor, a 560-acre swath of commercial and industrial land that hugs the west side of Interstate 15. That area – which has been dubbed “Uptown Jefferson” – is destined to become a high-density mix of residential and commercial uses that could feature buildings as tall as eight stories.
Marra noted that internet sales increases are surging ahead of their retail store counterparts. As a result, many retail stores are shrinking in size and the number of shopping malls with a vacancy rate above 40 percent has tripled since 2006, he said.
But Marra’s dim prognosis for the retail industry does not apply to Temecula, according to the developers and owners of the sprawling regional mall there.
Temecula’s Promenade mall boasts a 97 percent occupancy rate, and new stores are continuing to open that target emerging segments of the population, said Brenda S. Bentner, director of leasing for the Forest City Commercial Group.
Bentner noted that construction has rebounded, housing prices are rising, hotel occupancy rates are climbing and the Temecula-area tourism industry now nets $625 million a year. There is no danger that the trend toward internet shopping will push the Promenade into the “dead mall” category, she said.
“You have a combination of clicks and bricks that is the way of the future,” she said.