Council discusses impact of AB 98 warehouse restrictions

By Doug Spoon, Editor

In a Menifee 24/7 news article published on May 20, it was reported that Menifee City Council members this week would consider possible changes to zoning laws regarding warehouses in the Northern Gateway Economic Development Corridor.

Actually, as council members discussed the issue Wednesday night, it became clear that some measure of restrictions regarding warehouses in the northern EDC has already been done for them. The question is, are those restrictions sufficient?

Orlando Hernandez, Acting Community Development Director, explained to council members the basic requirements of Assembly Bill 98, which went into effect Jan. 1. It “imposes minimum distance between logistics facilities and sensitive uses,” as Hernandez stated in the staff report. It was also reported that AB 98 specifically targets Inland Empire regions such as Perris and Moreno Valley, where a proliferation of warehouses has caused public concern about air quality, noise and traffic.

Hernandez told council members that the impact of AB 98 on Menifee’s Northern Gateway EDC will be significant enough to result in a reduction of applications for warehouses and logistics facilities. Changes in EDC zoning regulations due to AB 98, he said, include loading bay setbacks ranging from 300 feet to 500 feet from the property line of the “nearest receptor to the nearest truck loading bay opening.” It also requires a buffer area including a landscaped berm of a minimum of 10 feet high.

Such changes, designed to separate warehouses from residences and open space, “will increase development costs and could prevent redevelopment,” Hernandez said.

Hernandez said he believed that the influx of warehouse applications from businesses pushed south because of overcrowding in Perris would slow. No warehouses have been built in the northern EDC at this point, but some applications are in process and have beaten the deadline imposed by AB 98. Residents may consider AB 98 a good thing, but City officials indicated they will take a wait-and-see attitude as they monitor possible changes in applications for development in that area.

There have always been many other types of permitted uses in the Northern Gateway EDC, including general retail, medical, hotels, professional offices, restaurants and theaters as well as warehouses. But as Mayor Pro Tem Bob Karwin noted, almost all of the applications in that area in recent years have been for warehouses.

“That area has been looked at as only a warehouse district, but there are three pages of permitted uses,” said Karwin, who then asked Hernandez, “How has this become a warehouse district? Are there any changes we need to make to facilitate this new bill?”

“Commerce changed,” Hernandez replied. “People shop differently now; they buy their stuff on the internet and more storage is needed for these items. That kind of property is no longer available in other cities, so they started coming south. If community development was the hot market now, we probably would see increases in that as well.”

After Karwin asked both Hernandez and Economic Development Manager Kayla Charters whether they felt changes were needed to create more diversity in the EDC, Hernandez said this:

“That (AB 98) alone will facilitate changes in other types of development there.”

As the discussion continued, some council members indicated they believed the best course of action was simply to accept the AB 98-imposed restrictions, with the belief that diversity would eventually come to the area. They seemed to be in agreement with Hernandez and City Manager Armando Villa, who suggested that some warehouse construction will still be needed so those developers could fund the infrastructure that is badly needed in the area south of Ethanac Road.

“That whole area has no infrastructure,” Villa said. “It’s over 600 acres. We wanted to capitalize on the market that was presented to us. That will free up more areas for other types of development. Unless we spend 60 or 70 million on infrastructure, we won’t be able to capitalize on these opportunities.

“We never intended to plaster this whole area with buildings. We’re just taking advantage of the current market.”

“Development of the infrastructure there is critical,” Hernandez said. “There are no streets, sewer or storm drains. This type [industrial] of development assists in that process.”

Mayor Ricky Estrada wasn’t buying it.

“I have concerns that we’re being left vulnerable to distribution centers that provide no tax revenue, that just move boxes around,” he said. “I have concerns about the type of labor these bring to the city.”

Estrada then displayed charts suggesting that only 1.2 percent of warehouse jobs provide one a living wage above the minimum wage for a family of four. “We need to be more protective of them,” he said about the residents. "I don’t want to leave our people vulnerable to low paying jobs.

“I don’t think AB 98 goes far enough to protect our EDC. I don’t want to leave it up to Sacramento to protect that area. And what if AB 98 is overturned?”

In response, Karwin said he was “a little confused by your message.”

“AB puts limits on warehouses,” he said. “When you say we need to take control away from Sacramento … it seems like Sacramento is doing exactly what you want done. That’s the whole purpose of this bill – to limit warehouses.”

Karwin continued his argument by saying data shows that a large percentage of working adults in Menifee have no Bachelor’s degree and that “there’s a lot of labor individuals here looking for work. We want the city to be a complete universe of jobs so everything is available here.”

At one point, Estrada said he would rather see restaurants and entertainment venues in that area than warehouses. Karwin responded that most workers in those type of businesses make no more than the warehouse laborers, and that most of those types of businesses would not pay for the infrastructure needed.

“None of the jobs you’re mentioning are higher paying jobs,” Karwin said. “And there are already opportunities for those kinds of businesses there. If an amusement park wanted to come here right now, they are allowed to. So why don’t we have that now?”

Council member Dan Temple agreed with Karwin, saying that “the EDC was created with a lot of deliberation. It’s a diversity of businesses that will bring the other things; other amenities will come. It would be nice to attract things other than warehouses, but remember, Ethanac Road is meant eventually to transport commerce from the 15 Freeway to the 215.”

“This (bill) is self-curing,” council member Ben Diederich said. “We won’t get a blight of warehouses. But if we don’t let some of those in, it will be decades before any of those commercial businesses can come in. I don’t see anything we need to change tonight.”

There was no request to take any action on this matter. Discussions will continue as the situation develops.