DEVELOPERS FAVOR SIMI VALLEY FOR INDUSTRIAL SURGE; SEVERAL NEW BUILDINGS PLANNED.

Byline: Douglas Clark Daily News Staff Writer

While the arrival of high-profile stores like Trader Joe's, Wal-Mart and Home Depot is good news for Simi Valley consumers, the current expansion of the industrial sector is equally important to the city's growth.

Developers have taken notice of the shortage of industrial space in the city and are building now and hoping for profits later, said Don Penman, assistant city manager.

``The speculative buildings are a good thing. There's not a ton of inventory they have to compete with,'' he said.

The vacancy rate for industrial space is less than 5 percent in the city and the indirect benefits of attracting businesses to those new spaces include the jobs they provide and the salaries those employees eventually would spend in the community, Penman said.

The tax revenue generated from new businesses is also a boon.

``Sometimes you get one that's a real winner,'' he said. ``It's cheaper to do business here than in Los Angeles County. But by locating here, you can still retain contacts with Los Angeles,'' Penman said.

Several industrial buildings are in the planning review process and there could be more soon, say developers who see a big need for industrial space.

In fact, with so little industrial space available in Simi Valley, developer Ed Ball said ``speculation'' is not a word he would apply to this market.

``If you've got the right building at the right location for the right price, I wouldn't call it speculative. There just aren't any buildings out there,'' he said.

Ball's development group, Ball Properties, owns more than 30 acres in the Tapo Canyon Business Park, south of Los Angeles Avenue on Tapo Canyon Road. He is working with Wohl Properties on two buildings of 184,000 square feet and 122,000 square feet. He hopes to begin construction in about two months.

But he said there has been a lot of interest in the remaining acreage he owns in the area, and expects more development partnerships to materialize soon.

``It will either be us or other developers,'' he said.

The shortage of industrial space is the result of the recession in the early 1990s that put many developers on the shelf.

``It weeded out a lot of us,'' Ball said.

Since no new buildings went up when money was tight, opportunity now knocks for those who survived the recession, Ball said.

Mid Valley Properties is building two 40,000-square-foot industrial spaces on Flower Glen, near the Radisson Hotel on Enchanted Way.

Maggie Kestly, Mid Valley leasing-property manager, said she anticipates the buildings will be available for occupancy by Dec. 1. Though the company would prefer one tenant in each building, Kestly said the buildings could be divided in half.

``Right now is a good time for this kind of speculative building,'' said Kestly. ``We heard there was a shortage of industrial space so we built these buildings with 28-foot ceilings.''

On Los Angeles Avenue near Angus Avenue, developer Frank Butter is building a multitenant, 4,600-square-foot space. He could not be reached for comment.

The speculative industrial development comes as Simi Valley residents are seeing an influx of quality retail chains.

Trader Joe's announced last month it would open a 6,800-square-foot store in September. And Wal-Mart is near the end of a long review process of a 128,000-square-foot store that would be one of three buildings in a shopping plaza southeast of the 118 Freeway and Madera Road.

That plaza will include a 105,000-square-foot Home Depot and a 74,000-square-foot building that would house three tenants, said Sam Freed, Simi Valley senior planner.

Despite the popularity of those stores, Penman said that it is the industrial space that holds a special place in the city's growth.

``The long-term picture is there will be more industrial space available - and more than neighboring communities can offer,'' he said.