April 1, 2003 - From the April, 2003 issue

Dos Lagos: Mixed Use Development In Western Riverside

Dos Lagos, a major redevelopment of a former quarry in western Riverside County, aims to offer a mixed-use, master-planned community that is sustainable and sensitive to the natural enviroment in which it sits. TPR is pleased to present this interview with Ali Sahabi, President of SE Corporation and Managing General Partner and Principal of Temescal Canyon Properties, developer of Dos Lagos. In this interview, Sahabi addresses the challenges inherent to environmentally sensitive mixed-use development and the promise of Dos Lagos.

Ali, you're developing a mixed-use, planned development in western Riverside County called Dos Lagos. What is your vision for the project? Share the development's particulars.

The mission is to create a truly mixed-use sustainable development-a place for people to live, work and play. Dos Lagos is a 550-acre project area. About half of it is being preserved in one way or another. In our residential component, we have a number of different product types, currently with 599-units of entitlement. We have a golf course and hotel facilities entitled, a business park area adjacent to the golf course and a higher-end light industrial park. On the west side of Temescal Canyon Road, we have a very large commercial area where we intend to develop a lifestyle retail center. Our first phase is 550,000 sq. feet of high-end shopping, entertainment and dining. We have about a million and a half sq. feet of commercial entitlement on the west side of Temescal Canyon Road, so we have a lot of room to grow.

Your project literature enumerates three goals: the development must relate to the environment, relate to the community and be responsive to government concerns about this area. Please elaborate.

We have three guiding principles as we approach every project, including Dos Lagos. One, is that we work with nature, not against nature. We think natural resources add value to our project and it's good business to be responsive to the resource agencies. By being responsive and understanding to the interests of federal, state and local resource agencies, we can get our permit process done faster and move forward with our project. In addition, being sensitive to nature is good business. People love nature, they want to be close to nature, and by preserving open space, we add value.

Second, we work with the community. By that I mean by we are sensitive to the history and cultures of a community. We don't think every community is the same and we think it's not respectful to go in and try to implement the same cookie cutter formula. By being sensitive to the community, by learning about the history and culture of a community, not only do we engage them in the planning process, but they also establish the same respect for us. Finding out what the community needs can also help us develop good market studies. By implementing community wishes we create a respectful relationship and doing so does not have to be very costly. Sometimes developers are against working with communities because they think that it's going to cost them a lot of money. It doesn't have to. Very small things can make your project sensitive to the community.

The third principal is understanding and working with government. We think by understanding the policies and the desires of the political leadership and administrative management in government, we can create public-private partnerships that work.

Address some of the challenges your company has faced developing Dos Lagos as a planned, mixed use development with the above goals.

You need to know a little bit of the history of this project first. This area is an old quarry. For 75 years, until 1976, this property was mined for silica sand. Since then, there have been many unsuccessful attempts to redevelop the land. The previous attempts failed because they were not sensitive to the environment and context. One part of the area is135 acres of open space adjacent to the 13,000-acre Lake Mathews & Steele Reserve and the Temescal Wash. This created a lot of environmental concerns. The other part was the old quarry, which had a lot of physical constraints-big holes, uncompacted dirt-areas that can not be developed. Then we had infrastructure constraints by being outside of the city boundary. We don't have water, we don't have sewer, and we don't have many of the services. This area has been ignored for many, many years.

We are in the middle of the path of growth, but this area was actually leapfrogged by development. We are on the I-15 corridor, which is in western Riverside County, the most important transportation corridor in the western United States. Within the next five years, we have 20,000 homes that are being built within a ten-mile radius of Dos Lagos. They are either already permitted, entitled or under construction. The same is true for many miles south of here. We are in the middle of everything and, for us, redevelopment of this project will not only improve this immediate vicinity, but also it will help development avoid pristine natural settings. We're taking a piece of property that had been idle for almost thirty years-it's a scarred piece of land-and returning it to a positive attribute.

What distinguishes Dos Lagos from the other housing developments that are already entitled on this I-15 corridor? Who's the customer?

We didn't follow the cookie cutter approach. The easy way would have been to just plan all residential, all commercial or all industrial. For the first time in western Riverside County, we incorporated all of those uses in the way people want to live-close to housing, close to shopping, close to entertainment and recreation. I like what Joel Kotkin said when speaking at UCR, "As Americans we all like to live in metropolitan areas with all the amenities and so on. But, we also still have a villager mentality. We want to be in a community where people know us and we know them, and where we can get around easily." This is what we‘re going to provide. This is totally different then anything else that is happening out here. This is going to become a village-Dos Lagos village.

Who are your collaborators? Who is helping you realize your ambitious vision for Dos Lagos?

I was very fortunate to attend USC's School of Urban and Regional Planning, and I say that not because I have a USC degree and it's a biased comment, but it was the best thing to happen to me professionally. At USC, I met Dr. Ed Blakely, who is now chairman of our advisory board. I also met all of the best planners, best economists, best land use lawyers, the best of everything. Most of my professors are my consultants now-these people work with me everyday.

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For our residential component we are very fortunate to be working with a company called Taylor Woodrow, who is a premiere homebuilder. Taylor Woodrow builds primarily very expensive homes. But, in Corona, they are building average, median-priced kind of homes. They are very quality-oriented, which is consistent with the image of Dos Lagos.

What will Dos Lagos look like a year or two from today, given that you've just broken ground on the infrastructure?

After investing fifty million dollars, we're going to have most of the infrastructure in place-the roads, the medians, the landscaping the sidewalks, the mass grading-and we are going to have all of our pads prepared for the developers. Perhaps part of the golf course is going to be built by then too. In five years we expect it all to be sold out and developed.

How is your development company able to be so patient financially, given the seven or eight years you've already invested in obtaining entitlements and the years it may be before revenue flows from the actual development at Dos Lagos?

I truly want to be proud of what I do. I've been in business a long time-I was 17 years old when I had my first business and that's 20 years ago. So I know how to make money. If my intention was just to make money, I could have done a lot of things. This is something that I feel will make a difference because it demonstrates that you can be sensitive, you can do the right thing in development and also have an economically viable project. I also have been able to work with financial institutions that believe in me, in our company and in this project. It's not easy. I explained this at a conference last year. I asked the audience, who were all city officials or from governmental and quasi-governmental agencies, how many businesses do you know that are willing to stay in business year after year, spending and investing money without any return? Nobody had any answer, because it's a given. Most of our business is in corporations these days. Most are looking at timelines that are18-months maximum.

Take a half step back and address the lessons you've already learned in advancing this master planned development in western Riverside County. Are these lessons transferable to your next project?

The most important lesson is to be sensitive to people-to truly be sensitive to people and to listen to people. The people could be the environmentalists, the community activists, the people could be your city management office or the county. By being sensitive to the concerns of all these people, you can have a better and more successful project long term. It may be difficult in the beginning, because dealing with people is never black and white, but learning to work with the community is the most important lesson.

Tell us about your development company and its plans going forward, besides Dos Lagos/strong>

Our company is SE Corporation and we've been in business for nine years. We are a land use planning, entitlement and development company. We have in-house planning staff, engineers and professionals and can go through all of the entitlement process, permitting process at the federal, state and local level and can actually implement the plans. Our company is unique because we can look at the property not only from the planner's point of view, but from a developer's point of view as well, which is not the same. In the future, we hope to duplicate, or at least implement a lot of the things that we've learned at Dos Lagos in a number of other locations. The more immediate opportunities for us are right here in our backyard, inland Southern California. But, public officials and large property owners are already contacting us from across the country because of our unique development approach.

Lastly, you indicated that former USC Dean of Planning Ed Blakely is chair of your company's advisory board. What's been Ed's value added role in the evolution of SE and Dos Lagos as a planned development?

Substantial. Ed helped us understand the environmental concerns, how important it is to work with resource agencies, and to be sensitive to nature and to the community, understanding the culture and history. In every aspect of our business he has been instrumental in helping us formulate these guiding principles.

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