Welcome to Lake Forest, the city that’s a lot like neighboring Irvine, but isn’t Irvine.
The town of 78,000 is named like a character on a soap opera but has a work ethic like a Presbyterian grandfather.
Sure, it’s a little farther out than Irvine. But it’s not as pricey. Urban hub? Far from it. But just look at those mountain views.
Like all cities, Lake Forest is feeling the recession in its business parks and shopping centers. And it has its share of growing pains for a city that officially is less than 20 years old.
But long term, the outlook is all growth: City officials expect as many as 15,000 more residents in coming years.
All the while, the city is courting business. Lake Forest already is home to disk drive maker Western Digital Corp., skateboard shoemaker Sole Technology Inc., mall retailer Wet Seal Inc. and sunglasses maker Oakley Inc. (the latter two in Foothill Ranch, which Lake Forest annexed in 2000).
Every two years, Lake Forest surveys 400 residents and 200 businesses, asking about emerging issues and priorities, according to David Belmer, assistant city manager.
“Is it traffic? Neighborhood issues? Public safety? Public information?” Belmer asks. “We need to find it. Our strategic planning then follows what we learn.”
People “are interested in the overall ambiance and climate of the community,” said Peter Herzog, a councilman and mayor pro tem.
Plans for 2009 include advancing housing plans for 800 acres freed up for development with the 1999 closure of neighboring El Toro Marine base.
The city sees 10,000 to 15,000 residents moving in once things get rolling and the housing market turns around.
“We have somewhere in the neighborhood of 4,700 additional housing units planned,” Herzog said.
Five owners have most of the land: West Bay Trust; the Irvine Ranch Water District; USA Portola Properties LLC and the county of Orange; Elmer H. Whisler Trust; and a unit of Walnut-based J.F. Shea Co.
Four have finished development agreements. Shea is in process, according to Belmer.
Officials expect specific plans to emerge as the economy rebounds.
The city also plans to expand Etnies Skatepark of Lake Forest, which was started with Sole Technology, based near the park’s concrete skating pools and ramps.
Lake Forest is looking to add 13,000 square feet of riding terrain to the 40,000-square-foot park, which draws more than 60,000 riders each year.
Then there are the growing pains.
“We have four arterials running north-south and three more running east-west,” Herzog said. “A huge part of our work ahead is to complete the transportation system.”
Already, $32 million has gone into improving El Toro Road,not just the road itself, but also beautification.
Future Plans
Lake Forest also aims to add a sports park and a community center, including facilities for seniors.
A new city hall is further down the line, Belmer said.
The city now is run from an office park on Commercentre Drive. The headquarters of Johnny Rockets Group Inc. is across the hall.
“It meets our needs,” Belmer said of the office park. “At some time it may be best to get more permanent.”
Being in an office park is not so bad for a city that wants to be known as business-friendly.
Eventually, people will expect more of the usual things from City Hall,fountains, parks and the like.
For now the city works. It’s functional,largely modeled on neighboring Irvine with its masterplanned streets, neighborhoods and business parks.
Lake Forest isn’t sexy, but it does have a cool factor, thanks largely to Sole Technology and Oakley.
Oakley, part of Italy’s Luxottica Group SPA, is the big fish. It was a pioneer, building a distinctive, fortress-like headquarters in the Foothill Ranch section of the city in the mid-1990s.
“Oakley needed a huge building. They wanted to buy property and pay competitive prices,” Belmer said.
They also wanted to be in an emerging area and in a natural setting, in this case near the Cleveland National Forest and a large regional park.
“So you’re in the hills, but you’re still part of an urban and suburban core,” Belmer said. “You’re removed, but you have convenient access to the toll roads and all the things businesses want to be close to.”
Western Digital moved to Lake Forest from the Irvine Spectrum in 2001.
When the disk drive maker built a campus in Lake Forest, it helped improve a trail running along a nearby creek, “where employees can relax,” Herzog said.
Like everyone, Lake Forest has felt fallout from the downturn.
Home prices have dropped drastically, according to market tracker La Jolla-based DataQuick Information Systems Inc.
In April 2007, the median price for a Lake Forest home was about $500,000. Now it’s about $325,000.
The Arbor, the city’s signature shopping center, has seen stores close. And while Oakley is growing, Sole and Wet Seal have seen layoffs.
When companies hit a rough patch, economic development specialist Jessica Gonzales said the city coordinates with them and the county on career counseling and transition, job searching and information on funding and other aid.
Even during the recession, the city still lures tenants, according to Gonzales. Late last year, Britain’s Intertek Group PLC, a maker of electrical products, took 29,000 square feet in Lake Forest to do, among other things, solar panel testing.
Vacancy rates in the city are holding steady. Empty office space is at about 10%, even with a year earlier.
Empty industrial space went from 6.6% in the first quarter of 2008 to 8.5% in third quarter, then to 7.2% now.
“Office is in trouble in all of OC, but these numbers are steady,” said Dale Camera of real estate brokerage Lee & Associates. “Industrial is fundamentally strong.”
Lake Forest competes with the Irvine Spectrum with lower city fees and rents.
“It’s an alternative,” Camera said. “And the city’s great to work with.”
The city’s big neighbor is “our biggest competitor,” Belmer said.
“We have companies tell us, ‘Our dollar went further here,'” he said.
Good Image
It doesn’t hurt that Lake Forest has no business license fee,or even a business license requirement.
“We want quality businesses with quality jobs, producing public revenues,” Belmer said. “‘Will you fast-track our building permits?’ ‘Are you going to be a facilitator or an obstacle in planning?’ Those are the questions they ask.”
Jerry Lizaso is a believer.
“My experience has always been pleasant,” said the facilities manager for Varian Consumable Products, a unit of Palo Alto-based Varian Inc. that has 95,000 square feet in Lake Forest.
“We broke our main water pipeline to the city and needed a new one,” he said. “I walked in there, told licensing and permitting, they said, ‘just do this and this.’ It took about 5 minutes.”
“I don’t think we’ve ever lost a business because they say, ‘Uh, we’re not getting a good vibe from Lake Forest,'” Belmer said.
In 2000, Black & Decker Corp.’s hardware and home improvement group combined three businesses in Lake Forest: Kwikset Corp. from Anaheim, Price Pfister Inc. from Los Angeles and administrative functions from Irvine.
The company wanted a work-life balance of location, toll road access, education and housing, spokeswoman Debbie Millsap said.
Through acquisitions and product launches, the division has grown from 250 employees in 2000 to 420 today.
“Our expectations have come to pass,” Millsap said.
As the economy slowed, the city stepped up civic staples like new business luncheons and free training seminars.
In September, Lake Forest launched Commercial Properties Now, a Web site for businesses and brokers that allows users to specify square footage and building type, as well as see what’s available in town.
The city says it hasn’t cut services. It’s a contract city where much of the day-to-day work,police, some street maintenance,is handled by hired guns that can’t be cut back without breaking contracts.
The mid-year budget review in April may present some changes. But Lake Forest considers itself prepared.
And lower home prices may be a blessing in disguise: The city’s becoming a good place to buy.
Home sales now are surging,37% higher in all 2008 and 127% up in early 2009. Like the rest of the county, foreclosures and short sales are driving sales. But as new owners who can better afford homes move in, it stands to benefit Lake Forest.
