1

Redeveloping the Cal Compact Landfill2016 University of Southern California MPL Comprehensive Exam || Janice Guzon || Economic Development

2

EXECUTIVE SUMMARY

BACKGROUNDThe City of Carson lies at the center of a changing South Bay. The population of South Bay is growing and employment opportunities are both growing and transitioning toward the service sector. As regional incomes increase, so too does Carson experience the positive trend in median incomes.

This has resulted in a demand for more housing and more amenities in Carson. In response to this demand, Carson looks to develop the former Cal Compact Landfill Site into a retail, entertainment, and hospitality center that will revitalize the local economy and highlight Carson as a regional destination. However, local and regional forces offer a series of challenges for the development site, including a faltering real estate market for retail spaces and steep competition from other retail and hospitality centers around the area.

MARKET OPPORTUNITIESNevertheless, the project site has a number of open opportunities including a sparse existing retail market in Carson, a high demand for residential units, proximity to the coast and LAX, and adjacency to regional attractions. Increasing incomes in the area as well as the presence of affluent communities within a 10-mile radius of the project site also fuel a market that could potentially support the success of the project.

RECOMMENDATIONSThe City of Carson must create a project that has both regional appeal and the support of the local community. Though the city hopes to create a premier retail and entertainment destination, many of its residents do not have the incomes to support luxury retail and residential options. Furthermore, the market that Carson looks to attract is faced with similar, competitive retail and entertainment developments, the most notable of which is Hollywood Park in Inglewood.

Therefore, the City of Carson must achieve a balance of regional attractiveness and support from the local community. Given the increasing demand for housing in Carson and the high rates of non-resident worker inflow, this report recommends dedicating more of the project site for residential use. This would allow for an expansion of the local market that could support the city through both local employment and local consumption. This report also recommends creating greater synergy between existing institutions in Carson and the project site.

3

QUESTION 1: CONTEXT & OVERVIEW

The City of CarsonThe City of Carson is a relatively young city, having only been incorporated in 1968.1 Neighboring cities include other South Bay communities such as Gardena, Torrance, and Lomita, as well as the 16 other cities of the South Bay Cities Council of Governments.2

Carson’s location within the South Bay puts it at the heart of a recent boom in the regional economy. In 2014, employment in the South Bay surpassed its 2008 pre-recession peak with a total of 552,886 jobs, up by 8.42% since 2004 and up by 2.14% since 2008.3 This places the South Bay region just below San Francisco as the fastest-growing labor market in the State of California.4

While Carson’s Economic Development Element of its General Plan indicates a 122.3% increase in total unemployment within Carson’s civilian labor force from 2000-2010, this statistic does not account for the impacts of the 2008 global economic recession, the greater impacts of which can be seen in the comparable increase in unemployment throughout Los Angeles County and the State of California, which experienced 75.9% and 114.6% increases in unemployment respectively within the same time period. A more accurate reflection of the impacts of South Bay’s economic boom can be seen in data showing the 1-year percentage change in monthly unemployment rates within Carson from April 2011 to April 2012. During that year alone, Carson’s unemployment rate experienced a percent change of -3.5%.5

1 City of Carson, 2016.2 SouthBayCitiesCouncilofGovernments,2016.3 California State University, Dominguez Hills, 2015.4 Beacon Economics, 2016.5 City of Carson, 2013.

AerialperspectiveoftheCityofCarson.Source:Proffer,2010.

EXAM PART ONE

4

However, not all of Carson’s workforce are residents of the city, and many of the city’s residents are employed outside of Carson. Specifically, only 2,889 of Carson’s workforce both live and work within the city. 37,121 residents of the city work outside of Carson, while 49,582 of the individuals working in Carson do not reside in the city.6

The residential real estate market within Carson has also been experiencing an upward trend in growth. The total housing stock within Carson, inclusive of both owner-occupied and renter-occupied units, increased by 3.2% from 2000 to 2010. However, the percent change in owner-occupied units grew at a more moderate rate of 1.7% over the ten years than did the rental-occupied units, which increased by 8.5%—double the percentage increase of renter-occupied units in all of Los Angeles County during that decade.7

Conversely, the market for retail and office space in Carson has been trending downward. Vacancies are on the rise for retail and office spaces, and low real estate demand for both has resulted in negative absorption rates from 2015-2016.8

Carson’s location also places it within close proximity to four major freeways. The city is adjacent to I-110 and I-710 and is intersected by SR-91 and I-405. Additionally, Carson is conveniently located approximately 13 miles from the Los Angeles International Airport (LAX) and five miles from the ocean front.9

These regional trends and the City of Carson’s location within Los Angeles County provide a unique set of opportunities and challenges for the redevelopment of the former Cal Compact Landfill.

Project InformationThe project site is a former landfill located alongside the Interstate 405. To its West, the site is bounded by Main Street; to its north, Del Amo Boulevard; and to its south, the Torrance Lateral (Figure 1). The site is approximately 157 acres and has remained undeveloped since the halting of the site’s landfill operation in 1968.

6 Kosmont Companies, 2016.7 City of Carson, 2013.8 Kosmont Companies, 2016.9 Google Maps, 2016.

Figure 1: Site Map of the former Cal Compact Landfill. Source: The Planning Center, 2006.

5

Figure 2: Context surrounding project site. Source: Google Maps, 2016While the area surrounding the project site does not offer extensive options for commercial amenities, the upcoming Porsche Experience Center to the north of the site and the South Bay Pavilion to the east of the project are anticipated to offer a symbiotic relationship with retail uses within the project site (Figure 2).10 The Porsche Experience Center and the Ikea at the South Bay Pavilion are especially expected to have a regional draw that can support retail on the project site.

However, the project site is located only 14 miles from the Hollywood Park and Stadium development in Inglewood. Despite Carson’s proximity to LAX, the project site may receive competition from retail, residential, and hotel uses within the Hollywood Park development, which is only 3.5 miles from the airport.11

Challenges and OpportunitiesEach of these regional and local forces will shape the outcomes and sucess of the project site. As such, it would be best to account for the the following challenges and opportunities that each of these forces present in developing a redevelopment strategy for the former landfill:

10 Carson Reclamation Authority, personal communication, April 26, 201611 Kosmont Companies, 2016.

Challenges

• Faltering local real estate market for retail and office spaces

• Competition from Hollywood Park

Opportunities

• Area prime for more retail options• Presence of Porsche Experience Center and

South Bay Pavilion as regional attractions• Proximity to coast and LAX• Booming residential real estate market• Decreasing unemployment in South Bay

6

Despite the City of Carson’s likely favored development pattern of heavy retail, entertainment, and hotel use for the project site, the project would benefit strongly from dedicating significant additional square footage to mixed-use residential. As the population in South Bay trends upward

and as emloyment opportunities, particularly in high-wage management and professional services, increase, the development of more residential units is likely to attract highly educated human capital from the South Bay with high earning and spending potential. This is the market that can support the cost of development through consumer acivity both within the project site and Carson at large.

Certain conditions inherent to the land, namely the parcel contamination, may make the City of Carson more hesitant to develop large numbers of housing units on the site. The EIR for the project site found that risks of lifetime cancer and other health hazards were greatest for permanent

QUESTION 1: ALTERNATIVE USE PROPOSALEXAM PART TWO

Figure 6: Alternative Site Proposal. Source: Student ID 28, Document 1, n.d.

7

housing built at grade. However, the EIR also found that health hazards from long-term commercial or industrial use would not incrementally add to the risks already common in the Los Angeles area.

Given the the city’s hesitation, it is important to emphasize that significant health risks were found primarily for residential units built on the site at grade. However, mixed-use residential with ground-floor retail would alleviate this hazard.

The city also has an additional objective of boosting the local economy and defining the identity of Carson as a regional destination through a large commercial project. This can be accomplished even with a significant reduction of the retail space, which currently encompasses nearly 2 million square feet of the site. Given the high vacancy rates for retail spaces, the project may not meet its leasing goals for retail spaces with a heavy development of retail and entertainment uses, but under the current residential real estate market, the project is more likely to meet its rental goals. Additionally, hotel space is not likely to return high profits for the area given the relatively low competitive room rates in Carson and should be foregone as a development option.12

Figure 6 shows an alternative use proposal for the former landfill site in which the retail and entertainment segments from the original The Boulevards at South Bay proposal have been significantly scaled down. Mixed-use residential is recommended along Development District 1 and the southern portion of Development District 2. This is to increase the amount of housing supply this project would provide for the City of Carson as well as create a more fluid integration into the surrounding low-density residential land uses on the western and southern borders of hte project site. Furthermore, mixed-use residential buildings with ground floor retail are recommended to mitigate the potential health hazards of constructing at grade residential spaces.

Outlet retail is recommended as the primary use for Development District 3. This will allow the outlet retail to serve as a complementary use to the commercial land use just north of the project site and can potentially act as a noise buffer from the Porsche Experience Center for the mixed-used residential units. Similarly, the outlet retail and entertainment retail uses can act as a buffer for freeway noise and debris from the I-405 for both the power retail and mixed-use residential segments of the project.

This layout also allows for the organization of access points to best serve different needs. For residents, the best entry point would be from Lenardo Drive on Main Street while off-site visitors can access the retail and entertainment portions of the site primarily from the Avalon Boulevard Exit. This allows for less off-site traffic around the residential portions of the development.

12 Kosmont Companies, 2016.