Bay Area's Loss Is Stockton's Gain

As a flood of newcomers saturate the northern San Joaquin Valley to find more affordable housing prices, developers are following along with large housing tracts and retail centers. And Stockton is investing heavily in a multi-venue waterfront center.

By J.T. Long

A storm of Bay Area migration is making a serious push east to the once-agricultural haven of the northern San Joaquin Valley.

Swinerton Builders is on a fast-track schedule to complete the $64-million Stockton Sports Arena before Dec. 2, the date scheduled for the Stockton Thunder's home opener (photo courtesy of Regent Development).

The construction forecast for the area is hot residential growth followed by scattered retail and large civic projects, including centers for the arts, hospital expansions and even a sports center on the waterfront.

Although a bumper crop of building has been the result of the flood of growth largely from the Bay Area into Tracy, Stockton and Modesto, the abundance of work has had an impact on contractors and construction workers.

"The problem is that the contractors are so busy it's tough to get competitive bidding," said Ron Heinzen, G.E., a principal geotechnical engineer who has worked in the Stockton office of San Diego-based Kleinfelder Inc. for 30 years.

There has been a particular problem in Stockton, where the lack of manpower is raising the price of affordable housing and lengthening normal construction time lines.

"We do outreach to encourage local companies to bid, but in the end, we are just trying to get the best project for the best price," said Steve Carrigan, Stockton's economic development director.

"It's a tsunami of growth and it is changing the landscape all over the 60-sq.-mi. city," Carrigan added.

Stockton is adding 7,000 to 8,000 new residents each year. That's a growth rate of 2.6 percent for a city 267,000 people called home in 2001, according to the California Department of Finance.

Homebuilding Hot Here

The busiest homebuilders in Stockton in the first half of the year include Kimball Hill Homes (327 units/ $72.3 million), Woodside Homes of California Inc. (190 units/ $48.8 M), Award Homes (161 units/ $42.5 M), Morrison Homes (156 units/ $32.8 M) and California Homes (142 units/ $25.5 M).

Richmond American Homes, Ryland Homes of California, KB Homes North Bay Inc. and Del Valle Homes also have a presence.

"When you are adding this many homes, you attract the big guys," Carrigan said. He added that he sees the market trending toward smaller houses on smaller lots. Instead of four houses per acre, the majority of plans being sent to the city propose seven or eight units per acre, he said.

"That is a good thing because higher density helps retail and allows us to plan for mass transportation," Carrigan said.

Stockton transportation officials are lobbying to get funding from the state to widen Highway 205. Five bridges and an interchange are under construction. The city is testing the water to see if a proposed new developer impact fee can build infrastructure without pricing homes out of reach.

More Affluent Newcomers

Regent Development is building the new Waterfront Events Center in Stockton, which includes an indoor sports arena, Banner Island Ballpark, a seven-story parking garage and Sheraton Hotel (photo courtesy of Swinerton Builders).

According to the San Joaquin Council of Governments Research and Forecasting Center, about half of the new residents buying in the subdivisions and sitting in cars on Interstate 5 are from the Bay Area. One in four residents countywide commute to work-mainly to the Bay Area, but also to Sacramento.

They bring urban salaries and tastes different from those in the '80s when immigrants from out of the country were moving in and bringing a net decline in income levels.

"Retailers want rooftops, traffic and median incomes, and we now have all those things in abundance," Carrigan said. "Our biggest problem is finding room for all the retailers who want space."

Vestar Development Co. of Phoenix, a major player in Southern California retail, is planning a power center for French Camp Road with more than 600,000 sq. ft. of shops. More retail is planned for the Downtown Transit Center near Weber Avenue. The historic facades of the half block are being preserved and modern facilities will make way for transportation and retail space.

A Call for Cohesiveness

Stockton senior planner Steve Escobar said the General Plan Update due in early next year will forecast the shape of development in the city through 2035. It will include "villages on the periphery of the city, planned communities that will have cohesiveness," he added.

The plan assumes a 2.5 percent growth rate annually with build-out of 576,000 residents by the end of the plan period and some room left for industrial.

"We have reserved what looks like a sea of blue on the map for industrial in an attempt to create jobs for the people who are currently driving to the Bay Area," Escobar said.

A Labor of Love

Among the major housing and mixed-use projects currently underway in Stockton is University Park, the vision of longtime Stockton developer Grupe Commercial Co. The 103-acre site is anchored by California State University, Stanislaus-Stockton Center, and will be surrounded by office, retail and residential space. There will be approx. 215,000 sq. ft. of new construction, and approx. 285,000 sq. ft. of historic renovations.

In addition to filling a need for high-quality, accessible housing and commercial space, the project is a "labor of love," said Dan Keyser, Grupe senior vice president. "Fritz [Grupe] has a passion for education and this is a site where, when we are finished, a person could start in preschool and continue through to a college diploma."

Grupe Commercial took over management of what Keyser calls a "brownfield property" in 2002. The site was one of the first hospitals for the mentally ill west of the Mississippi River (in operation from the 1890s to the 1920s), and 14 of the historic buildings and much of the park setting are being renovated. A lot of it-so far 35 buildings totaling 380,000 sq. ft.-is being demolished.

Keyser said he estimates the clean up of hazardous materials and asbestos alone will cost up to $10 million. "Sometimes it costs more to upgrade existing infrastructure, particularly when you have to coordinate with existing tenants," he added.

New monument signs, street lights and signage are being installed for consistency.

The first new tenant, Valley Mountain Regional Center, a state Department of Developmental Services facility, will move into a 63,000-sq.-ft. office in the spring. Lesovsky Donaldson Architects designed the building and TMW & Associates Inc. of Stockton was the general contractor.

"Now is a good time for a project like this because the city has really made an investment in downtown Stockton," Keyser said. "We are building on that."

Working on the Waterfront

The focus of the city's attention this year is the $117.5-million Stockton Waterfront Events Center, a multi-purpose sports arena and Banner Island Ballpark that is taking shape on the north bank of the Stockton Deep Water Channel.

Sheryl Boell, development project manager for Sacramento-based Regent Development Inc., said she recalls having some difficulty finding enough masons and painters for the union project, but she added that Regent "got lucky" in hiring Swinerton Builders, the San Francisco-based general contractor.

"It was a good bid from a reputable company," Boell said.

The project has faced obstacles.

"We were held up substantially by rain, but Banner Island Ballpark was ready opening night-barely," Boell added. The facility-complete with an electronic scoreboard and video screen-welcomed a sell-out crowd of 5,287 fans for the first game of the season of the Stockton Ports, the Class A affiliate of Major League Baseball's Oakland A's.

The $20-million facility, designed by HKS Architects of Beverly Hills, replaced Billy Hebert Field, a 1,500-seat capacity ballpark built in 1941.

The development team is under equally strict deadlines faced by the adjacent arena, which is almost two months late and now scheduled for completion Dec. 2, the date of the first East Coast Hockey League home game for the Stockton Thunder.

"We are on a very fast track," said Ed Blanke, vice president and division manager for Swinerton Builders. He said there has been a lot of overtime and just-in-time deliveries, "but we are going to get this done."

The $64-million arena, designed by 360 Architecture of Kansas City, Mo., also will be the home to the California Cougars' Major Indoor League Soccer Team and a yet-to-be-named Arena Football League team. And it will be rented out for performances, trade shows and events.

The 220,000-sq.-ft. arena will feature 10,000 seats, 24 suites, 340 cu. yds. of a continuous-pour concrete floor that covers 11 mi. of piping for the cooling system, and Spanish-made Prodima exterior wood panels.

"One unique thing about the arena is that it is a combination of steel-cast, built-in-place and precast pieces," Blanke added. "It's a little bit of everything."

Two parking structures-one next to a new cinema complex-are under construction to serve patrons of the arena, stadium and other attractions. Stockton-based F & H Construction is the general contractor for both garages.

A seven-story garage for the arena will include 592 parking spaces and 16,997 sq. ft. of office/retail space. It will open in November.

To complement the new construction, Regent Development is planning a Sheraton Hotel, plus retail, commercial and dock space. Boell said the hotel will be a full-service, first class facility with 150 to 180 rooms and 42 condos.

And even though the condos are high-end, "we already have a waiting list of more than 40 people who want to live there," Boell said, adding that the units will cost about $450 per sq. ft.

Regent began construction on the hotel, which was designed by Sacramento-based Monighan + Associates Architects, in August. Retail construction, including two major restaurant chains, will follow in 2006.

Additional development proposed by the Grupe Co. for the waterfront includes 20 acres of office on south shore and 300 residential units on the north side.

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