“The Inland Empire is arguably the most dynamic industrial market in the country,” said Patrick Daniels, co-founder/Chief Executive Officer, CapRock Partners LLC, during a session at NAIOP’s I.CON West in Long Beach, California. He and John Condas, partner, Allen Matkins, discussed how industrial developments can coexist with suburban residential neighborhoods.
Daniels presented an industrial entitlement and development case study on Palomino Ranch Business Park, a 110-acre master-planned industrial park in Norco, California, about 75 miles east of the Port of Long Beach. The site provided a premier location for last-mile logistics.
CapRock Partners, founded in 2009, is a fully integrated real estate private equity firm focused on acquiring and developing logistics assets in the Western and Central U.S. Among the company’s core values are “people before profit” – demonstrating empathy and care for the community – and “strive for excellence” – researching and presenting realistic economic benefits for the city generated by the project. CapRock Partners hoped that by using this values-driven approach they could succeed in this location where other developers had previously been unsuccessful.
“We approach things with integrity and along with that, humility. We’re going to be honest about what we can and cannot do,” said Daniels. “This was a unique community of less than 30,000 people with very strong local support and pride in their activities.” Norco goes by the nickname “HorseTown USA,” reflecting its vibrant history as an equestrian-oriented community that features more horse trails than sidewalks. The site under consideration by CapRock Partners was a former egg ranch started in the 1950s.
“Industrial real estate is a team sport,” said Daniels. “We knew we had to have the best-in-class; a great land use attorney along with architects and engineers,” as well as a public relations professional who would be key in connecting with the local community.
They found that in Kathy Azevedo. A Norco resident for over 50 years, Azevedo had served as the mayor multiple times, served on city council for 12 years, volunteered throughout the community and was a prominent equestrian. She met with the CapRock Partners team and introduced them to the community.
In 2018, CapRock Partners held three different community meetings to present the project. At that time, they presented a blank slate, emphasizing that they were interested in hearing from members of the community. The Norco Streets, Trails and Utility Commission required that CapRock add horse trails around all four sides of the majority of the property. The company met with the city council, the planning commission, Norco Horsemen’s Association, the Norco Area Chamber of Commerce, and many, many others at the local level. In addition, they met with federal groups including the California Department of Fish and Wildlife, U.S. Army Corps of Engineers, Santa Ana Regional Water Quality Control Board, and other groups.
In California, “CEQA [California Environmental Quality Act] is going to drive the process because you can’t get an approval without them being involved,” said Condas. CEQA regulations apply to all private and public (non-federal) projects. “CEQA is intended to inform government decisionmakers and the public about the potential environmental effects of proposed activities and to prevent significant, avoidable environmental damage,” according to the Governor’s Office of Planning and Research.
Another CapRock Partners value is a commitment to contribute 10% of the firm’s net profits to established and credible nonprofit groups focused on supporting children and families throughout California, Arizona, Nevada, Texas and beyond. As an extension of that, the company’s foundation established The Kathy Azevedo Endowed Scholarship in recognition of the extraordinary woman they had gotten to know so well.
CapRock Partners signed a letter of intent in the fourth quarter of 2016; all entitlements were approved by the second quarter of 2020. It was a long, multifaceted process from start to finish, and one made possible through conversations and connections with the local community.