December 30, 1994 - From the December, 1994 issue

The Inland Empire Examined: Location, Location, Location

While Los Angeles County continues to ride out the recession, San Bernardino County is beginning to experience a surge of economic recovery. The Planning Report presents an interview with Wes McDaniel, executive director of the San Bernardino Associated Governments (SANBAG) on a wide range of topics from air quality proposals to economic development and planning to the impact of the Norton Air Force reuse process. 

Share with our Los Angeles readers the goals and objectives of the San Bernardino Associated Governments (SANBAG). 

We are a general Council of Governments (COG) doing general planning, primarily transportation and we are also the sales tax authority for the county. In terms of other activities, we do broad-based planning similar to the Southern California Association of Governments (SCAG). More recently, we've become involved in economic development.

Air quality is obviously an issue for SANBAG. Have AQMD's recent actions been well received? How about the Air Resources Board and US EPA?

In the last year, we have formed an Inland Empire Coalition which is a joint activity of the Riverside County Transportation Commission (RCTC) and the Western Riverside Council of Governments (WRCOG) and SANBAG in order to attempt to forge proposed air quality policies in the self-interest of the Inland Empire. We are cooperating with UC Riverside, the CE-CERT operation, and we have hired Jacki Bacharach as a consultant to help us in our outreach efforts. 

Basically, we support the air quality plan recently adopted by the AQMD, but quite frankly, we were pushing to deal with NOx and PM1O, which of course, Los Angeles did not want to do. We were also pushing the Air Resources Board (ARB) to get their plan through the US EPA in order to meet the deadline and also to keep the pressure on the federal government so that the EPA will be forced to deal nationally with truck standards. If California doesn't push, we don't see where the impetus will come from to set national trucking standards which is the only economically fair and effective way to deal with that critical need. 

Regarding trucking standards, are you satisfied that the regulatory agencies have pushed hard enough? 

I think they have pushed hard enough to this point. The question will be whether or not California will be the leader in pursuing the issue at the national level, which we must be, if it is to succeed. 

To what degree have you embraced the FIP process? 

We have participated very extensively at the staff level, through the overall SCAG and ACAQ effort, as well as individually, though primarily at the staff level. 

My own personal expectation of the FIP discussions is that the ARB formulated plan will probably be endorsed by the EPA. The ARB plan is to a considerable degree the AQMD plan. It should be noted that the real "main event" occurs next year when we must deal with NOx and PM10. 

Part of your focus is economic development; what can SANBAG realistically do to stimulate activity in the Inland Empire? What are the specific programs and projects you’re engaged in promoting? 

Traditionally, most government agencies such as ourselves have not had an economic development focus, it has been handled by private associations. Our economic development efforts came out of a retreat we had approximately one and a half years ago, during which there was a lot of concern that in the Inland Empire there was not an adequate private organization. In essence, a revitalized public/private partnership has emerged in which we took on a role of attempting to encourage a viable, large-scale, private organization focusing on economic development. What we're seeing now is a significant rejuvenation and strengthening of what is called the Inland Empire Economic Partnership. It's our version of the Greater Los Angeles Area Chamber of Commerce or the Orange County Industry Coalition, and it supports both Riverside and San Bernardino Counties. 

We think that we have significant tools for economic development, because we see a niche market in advance technology transportation, particularly, electric vehicles, alternate fuels and IVHS systems. We have significant funds that we ourselves can use, as well as aggressive action to direct AB 2766 funds out of the AQMD and additional state grant funding. Also, we have three significant cards to play. One is the CE-Cert activity out of UC Riverside which is going to be a leading think tank for transportation innovations, another is the new Kaiser Penske race track that will soon be under construction in Fontana, and the third is reuse of the former Norton Air Force Base.

Is our tax structure conducive to the kind of investment you would like to see in the Inland Empire? Are the incentives such that it is better to get a Wal-Mart than a high wage manufacturer?

Obviously, a real flaw in our overall government funding structure is the over emphasis on sales tax. Typically, there is not a great deal of incentive to look at employment-based activity, but that is one of the places that a regional body such as ours can examine this problem. Cities and counties, almost in self-defense, are forced to deal in the Darwinian competition for sales-tax-producing entities, but we think we can really do some good planning in trying to build the long-term economic and employment base in the region through some industrial and tailored development siting. 

The elections: What do you expect from the new Republican Congress to help you realize your goals? 

To be honest, we expect that we will have some difficulty because Congressman George Brown, D­San Bernardino, who has been very influential, could very well be passed over for important positions. Also, Congressman Jerry Lewis, R­Redlands, is viewed as a moderate by Gingrich & Co., so we are going to have more trouble with the federal government than we have had in the past. However, we have been doing well with Senator Dianne Feinstein who channeled a lot of effort into the Norton Air Force base reuse. I think we are in for an uphill battle for federal funding. 

What does the Norton Air Force base closure mean for the Inland Empire? 

We are feeling very positive about the Norton reuse efforts. It is a very positive example of what can happen in the reuse process. However, the George Air Force Base reuse process is indicative of some of the problems inherent in the process. But in the Norton reuse, a joint powers authority between the county and the four surrounding cities has formed in order to establish a three-mile redevelopment zone including land surrounding the base. A very positive purchase deal was negotiated with the federal government and the process is really moving forward without much friction. 

On the other hand, George Air Force Base in Victorville has been beset with political squabbles in which all the cities in the region and the County except Adelanto have been engaged in a true battle royale for over three years. Adelanto is trying to establish the base as their own and this has caused some significant delays and problems. 

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Can the Los Angeles metropolitan area learn from what is happening in the Inland Empire regarding land-use planning? 

I think a fair statement is that we are relatively laissez-faire regarding land-use planning. We have a strong building industry and much conservatism in our elected officials such that there is not a real desire to enter into pro-active land use planning. Presently, everyone has been so impacted by the recession that all they want to see is any construction at all. Most of the land-use planning has been a function of private sector decision making and individual behavioralism. Of course, given the price of land and low infrastructure cost, that leads to an ample supply of affordable housing and the kind of warehousing and distribution industry that developed in Orange County twenty or thirty years ago. 

What, if anything, is SANBAG's agenda for water policy in the Inland Empire? 

We are in a very fortunate position relative to water in the sense that the entire eastern half of the San Bernardino Valley is not part of the Metropolitan Water District (MWD). In fact, it has its own water table which is quite healthy. There is a contract to buy from the State Water Project if necessary, but it really hasn't needed to be done. Also, the desert region of the Inland Empire has its own water agency. Only the Chino basin in the western portion of the Inland Empire is part of the MWD. Water policy questions have not really been a priority on the agenda. 

What about the future of landfills in San Bernardino County and the desert? Is it a business opportunity or an environmental concern? 

It depends on who you talk to. In the valley, there is sufficient land­fill capacity for several years. The two rail projects - Eagle Mountain in the Riverside desert and the Railcycle past Barstow - go through our region. The Railcycle project is continuing to advance but it is mainly directed to waste from Los Angeles County more than our county. Of course, there is a mixed opinion as to whether it's an economic blessing. The harsh answer to your question is that the desert sees itself as a repository of everything bad coming out of urbanized Southern California, trash only being one of those things. 

How healthy is the Inland Empire's economy? 

John Husing, a local economist with the Inland Empire Economic Partnership, has been presenting an analysis in recent weeks showing that in terms of job growth, the Inland Empire experienced a net increase of 23,000 jobs in September compared to last year. Whereas, Los Angeles County was down 78,000 jobs and Orange County was down 3,000. In that respect, some of the economic recovery in the region is happening in the Inland Empire before the rest of the region. 

Signs of success will be continued economic growth in terms of sales tax and the beginning of new absorption of industrial land. The startup of the residential housing market is the one indicator that has not been experiencing any positive growth. 

What are the land-use and economic development lessons that can be applied by the Inland Empire from the experiences of Los Angeles and Orange counties?

That question is a little premature. Next year, we are planning to undertake a year-long future planning study such as the Bay Area's Bay Vision 2020 plan to try to examine our potential. The reality is that most people, if you asked them, would say that Orange County is probably the right model. Not everyone would agree, but I suspect that for much of the private sector and many of the region's elected representatives, the Orange County model is the one to replicate. 

What does the Inland Empire need in terms of capital infrastructure investment to achieve its goals? 

First, part of our problem is the lack of major Fortune 500 headquarters. The biggest financial institution is the San Bernardino Credit Union. We could stand to become much more important in terms of financial centering, probably around the Ontario Airport area.

In terms of infrastructure, we are no different from anyone else. We have been fortunate to have a fairly robust infrastructure but we have been using up all types of our infrastructure, not just transportation, and not doing much to maintain it or enlarge it, except for our sales tax program which is almost entirely directed to three major freeways and Metrolink, rather than our surface streets. 

What do you foresee in terms of additional infrastructure investments, in light of the state and federal deficits? 

Increased hard times. City and County governments are looking for the state to continue balancing their needs on the backs of local government without any positive outlook for revenue enhancement. We are getting clear signals from Sacramento to not look for any transportation enhancements until 1997, and the changes in Washington will simply exacerbate the situation. 

Of course, the test is whether or not government can reinvent itself to provide services within these revenue constraints. 

Finally, there is a state Constitutional Revision Commission examining the California government; what are your thoughts on it's likely focus and plans for reorganization?

We are hearing that the Commission is not going anywhere fast, and after this election, there may even be some replacements. A political process doesn't lend well to severe structural reorganizing. The one thing that I would like to see, and it has to do with your question regarding the fiscalization of land-use, is an examination of the over dependence on sales tax and the under dependence on property tax, and its implications for real building-blocks economics such as the development of regional employment bases.

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