The boom in residential development in the Irvine Business Complex over the past few years appears to be having an effect on the area’s base of jobs.
The 2,700-acre swatch of land covering much of the southwest, industrial portion of Irvine was home to about 93,400 jobs as of 2014, according to city records. The area had nearly 108,000 jobs in 2006, just prior to the last downturn.
The 13.5% employment decline contrasts starkly with jobs growth elsewhere in the city during that period. Irvine is Orange County’s fastest-growing source of new jobs. It had the highest jobs-to-population ratio—about 95%—of any large U.S. city a couple of years ago. The city’s population totals about 237,000.
It’s projected that IBC employment rates will return to prerecession levels in the next two or three years, barring another downturn.
Don’t blame a faltering economy on its current job declines, though. The culprit seems to be a simple lack of available space. Several million square feet of older offices and industrial buildings across the IBC have been razed in recent years or are being targeted for demolition to make way for residential developments, primarily midrise apartments. Many of the displaced businesses have moved elsewhere.
The latest big IBC residential project to break ground is The Westerly, a 388-unit project at the intersection of Jamboree Road and Main Street. The five-acre development is headed by Irvine-based Sanderson J. Ray Development, which tore down a handful of older buildings it owned on the site over the past few months to make way for its first luxury apartment project.
Dallas, Texas-based Streetlights Residential is general contractor and co-developer, and Architects Orange was the project’s chief architect. It should open by early 2019.
Irvine city officials in 2010, as part of a plan designed to promote residential development, established a 15,000-unit cap on new dwelling units in the IBC at a time when few residential projects were being built.
A surge in construction over the past few years makes the cap loom large.
“After taking into account base units that are either existing, under construction, or approved but not yet built, a total of 331 units remain available under the cap,” notes a recent filing with the city’s planning commission. “However, there are additional projects proposed totaling 793 dwelling units. Applications under consideration by the city have the potential to exceed the cap by 462 units.”
The city is in the early stages of determining whether it makes sense to increase the IBC residential unit cap. The extra growth, along with resulting traffic concerns, is likely to be a hot-button topic for Irvine’s city council over the next few years.
Irvine also is exploring whether the IBC has enough day-to-day retail to serve its current residential base.
Studies in November suggest that the area could support at least 203,000 square feet of additional retail space, and potentially could support a total of 538,000 square feet when the residential development is built out and IBC employment returns to prerecession levels.
It’s not just Irvine that’s seeing the building boom around John Wayne Airport. There are nearly 3,000 residential units under construction in the airport area, factoring in nearby projects in Newport Beach. Another 5,704 units have been approved, and 1,895 units are pending city approval, according to a recent report by the Irvine office of brokerage JLL.
Correction
I got the family relations wrong last month for two Cushman & Wakefield brokers who worked on automotive parts distributor WorldPac Inc. signing a 240,000-square-foot lease at the Imperial Distribution Center, a new industrial development in Brea. Cushman Executive Director Rick Ellison, and Randy Ellison, an associate director at the brokerage’s Irvine office, are brothers.
I’m not going to guess which is the oldest.
