Land grab: What happens when warehouses move in next door?

Ana Carlos still remembers the day last November when the letter came in the mail. 

"I get inside the kitchen, I open it up, and it basically looks like an escrow contract," she recalls.

An Orange County developer was offering her $440,000 for her house. She paid less than half that six years ago. The offer still stands.

"I wouldn’t even considering selling," she says, looking out at her property. It spans two acres, with a barn, horses and goats. "They could have come here with an offer of $1 million, and I would have said, no thank you."

Nine-year-old Ernie Carlos plays tetherball on Tuesday, Sept. 19, 2017 in the backyard of his Bloomington home. In November 2016, the Carlos family received a letter in the mail. An Orange County developer was offering her $440,000 for their house.

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Carlos lives in Bloomington, an unincorporated area in San Bernardino county about four miles southwest of the city of San Bernardino. A drive through reveals custom homes spaced far apart and the occasional roadside stand selling eggs.

"We have three young children, so for us it was exciting for them to grow up and be outside with animals, in the garden," she says. "We liked the feel of this rustic town."

But developers have other plans for Bloomington. The community is nestled deep in the Inland Empire, which has become a mecca for the logistics and e-commerce industries. Over the past decade, warehouses have become a common sight in this part of Southern California.

As E-commerce and Prime Shipping have become a way of life, the counties of Riverside and San Bernardino have become a mecca for logistics warehouses. Inside are mountains of online inventory.

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As Americans buy more of their merchandise online, the industry is in a frenzy to build more warehouses to keep up with demand. But land in San Bernardino and Riverside counties isn’t as easy to find these days. Much of it has been built out or bought up.

So some developers are getting creative – buying up patches of neighborhoods so they can demolish the homes and squeeze warehouses into the open space.

"I see it when I go to south Fontana," Carlos says. "To the left are homes, and to the right are these massive warehouses that don’t end. They keep going and going, miles and miles of warehouse."

In some areas, it’s clear that a few homeowners simply refused to sell.

A sign against commercial vehicles in residential areas is posted in Mira Loma, Calif. on Tuesday, Sept. 19, 2017. Longterm studies of the Inland Empire show there are higher incidences of asthma and other health problems, especially with children.

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"[The warehouses] have them caged in. An itty bitty house with these huge warehouse walls [around it]," says Carlos.

She mentions a family she knows in Fontana who refused to sell, even as the developers offered them more money. But as the months passed, more of the neighbors took the offers. 

"And little by little, they started seeing the land leveled behind them, to the right and left of them," she says. 

Then the warehouses were built. The offer from the developer increased to more than $1 million.

"With the walls going up, and the warehouses, and the traffic from all these workers coming in, the trucks, they caved, they said, fine, have our house," Carlos says.

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She worries it could happen to her. The letter she received makes it clear that the developer, Howard Industrial Partners, is trying to acquire 30 adjoining acres. It’s unclear what the company intends to build, but its website shows mostly logistics and distribution centers in its portfolio.

Carlos says it would be strange to have a big white building overlooking her horse stable, or to feel "caged in" by warehouses on either side of her. And then there's the traffic, the noise of heavy trucks, and the pollution, she says, her voice trailing off.

Long-term studies of the Inland Empire show that pollution is high in communities with high concentrations of warehouses and diesel trucks. There are also higher incidences of asthma and other health problems, especially with children.

"These developers know that once the neighbors start seeing the community go, we’re going to budge," says Carlos. "We’re going to throw in the towel and say, fine. Would we really want to be enclosed in walls of warehouses with our kids? This is not what we signed up for."

A vicious cycle

Rigoberto Diaz owns a home up the street from Carlos. He’s lived here for 17 years.

He got the same letter from the developer, and he's already accepted the offer. A few other neighbors did too, he said.

"They’re afraid to say it, because [some neighbors] may get mad," says Diaz. "But the reality is, they already signed up. I know quite a few of those. They’re keeping it to themselves."

Proponents of warehouse development in Bloomington, Calif. say it would generate enough tax revenue and therefore the county could provide more services to its residents.

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Diaz won't say how much money he was offered – just that it was more money than he could make in a traditional sale, and it’s money he can give his kids someday.

He doesn’t have it yet, or even a guarantee from the developer. The deal is contingent on whether the neighbors living closest to him also agree to sell. One hold out would block it from happening.
 

A warehouse stands behind a residential community at Hadley Drive and Oak Bark Lane in Mira Loma on Tuesday, Sept. 19, 2017. In Mira Loma, warehouses are already encroaching on residential neighborhoods.

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But Diaz thinks most people in the neighborhood actually want out. He says this area has its share of problems, which the county can't fix. 

To explain, he pulls out some photos of his backyard after it rained last year. 

"It's a lake," he groans, pointing at the sizeable body of water that he says forms every time it rains. Water streams in from several other properties. Diaz has asked the county to fix it many times over the years.

"They say they don't collect enough money from taxes," he says. "They don't have the resources, so they won’t be able to fix it."

The Carlos family owns two acres of land in Bloomington, Calif. with horses, goats and chickens.

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As Diaz sees it, Bloomington is stuck in a vicious cycle. The community generates very little tax revenue because the residents pay low property taxes. So the county provides only basic services. There are few sidewalks, no sewer and a limited law enforcement presence.

With such minimal county services, the community can't attract traditional businesses, such as restaurants, stores and office buildings. And without those companies, the community can't generate more tax revenue.

For the past three years, the Rocha family been fighting to keep a warehouse from being built behind their home. The project is still in the planning approval process.

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Diaz believes warehouse development could generate enough tax revenue to break that cycle.

Others agree. Gary Grosich is a longtime businessman and city planner in the Inland Empire. He also chairs the Bloomington Municipal Advisory Council, a county-appointed board that represents residents. Locals call it the MAC.

"There are several things we need, and the public has been asking for it – more public safety, we need an additional sheriff, we need to provide more services in the way of parks, we need infrastructure improvements," Grosich says.

He insists that Bloomington isn’t going to allow warehouses to "hopscotch" all over the community. The MAC recently recommended that three small sections of town be designated for future industrial development. That would keep most of the warehouses clustered together, away from the central part of town. Ana Carlos and Rigoberto Diaz live in one of the designated areas. 

Nine-year-old Ernie Carlos plays in the backyard of his Bloomington home on Tuesday, Sept. 19, 2017. Some developers are buying up patches of neighborhoods so they can demolish the homes and squeeze warehouses into the open space.

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Developers would still be required to go through the same county approval process, which includes an environmental review and a vote from the board of supervisors. Projects in the designated areas would be more likely to receive the required zoning changes.

"The areas identified by the council for rezoning were selected because of their proximity to the I-10 and 60 freeways, the railroad tracks, existing industrial areas and truck routes," said Lee and Associates, the real estate firm that sent the offer letters to Carlos and Diaz. "We have been in contact with property owners in those areas, and most have told us that they support the council’s proposal," the firm said in an emailed statement.

Grosich says the MAC spent months gathering public feedback from residents as it developed Bloomington's updated community plan, and that most residents support the idea of limited warehouse development in exchange for enhanced public services. 

But others in the community say the MAC has turned a deaf ear to their concerns, and they don’t believe a plan like this will limit warehouse development.

Tommy and Kim Rocha formed the Concerned Neighbors of Bloomington and collected 1,000 signatures from residents who oppose warehouses.

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A community divided

Kim and Thomas Rocha live a few blocks east of Rigoberto Diaz.

For the past three years, they’ve been fighting to keep a warehouse from being built behind their home (it’s still in the planning approval process).

In that span of time, several other warehouse projects have been proposed around town. 

"We realized that, 'Oh my God, they’re going to surround us.' So it doesn’t [matter] if I win [the fight against] this warehouse here, I’m still going to have one right there," says Kim Rocha. "So I’m going to have the trucks anyway. Smog, pollution, the quality of my life...and our community, it’s a poor community, and a lot of poor people sometimes don’t have a voice."

Earlier this year, the Rochas formed a group called Concerned Neighbors of Bloomington. Kim says they’ve collected more than 1,000 signatures from residents who oppose warehouses, so they find it hard to believe the MAC’s claim that most residents support this kind of development.

"It's like, where are these people?," she asks, growing frustrated. "We don't find these people saying they want the warehouses. To me, it's like, who is telling you this? Because we are in this community too."

Bloomington residents don't often attend county meetings to protest the warehouses, says Kim Rocha. They work long hours, some are elderly and don’t speak or read English, she says. So when the county sends a postcard to inform them of a future warehouse project, many people don’t see it or understand what it says, adds Rocha.

Residents may not find out what's going on until a project is about to break ground. That's similar to what happened this summer after the San Bernardino County Board of Supervisors approved a warehouse project near an elementary school. Many parents were shocked that they weren’t informed beforehand.

"It’s like David and Goliath," Kim Rocha sighs. "Like, we’re fighting big business, big money, and we’re just little people."

The Rochas have been to many of the MAC meetings, and they know about Bloomington's tax revenue problem. They don't think warehouses are the way to solve it.

Ultimately, Kim Rocha says, if they can’t get county leaders to see it their way, it’ll be up to residents to hold the line.

For the past three years, the Rocha family been fighting to keep a warehouse from being built behind their home. The project is still in the planning approval process.

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"If you don’t sell, you may be the major block that’s stopping them. Just don’t sell, don’t give in," Thomas Rocha says, recounting the advice he recently gave a retiree who lives nearby.

He and his wife also realize the developers have deep pockets, and that worries them.

"Remember the lady who lived over there?" Kim Rocha says, gesturing over her head.

Her husband nods.

"Her house value came in at $375,000, and they offered her $800,000."

The woman took the offer.