Inland Empire business leaders are looking to the region’s airports and travel destinations to keep the local economy flying high in 2023. For the fifth straight year, Ontario International Airport (ONT) is the fastest- growing airport in the United States, according to a leading industry publication. The ranking is based on a survey of frequent travelers by Global Traveler, a magazine for business and luxury fliers who travel extensively in the U.S. and abroad. ONT is now reaching its highest annual passenger volumes since 2008, serving approximately quarter of a million more passengers in 2022 than the 5.6 million recorded during the last pre-pandemic year of 2019, making it one of the fastest-recovering airports in the United States. San Bernardino International Airport, located on the site of the former Norton Air Force Base, welcomed scheduled passenger service in August with the debut of Breeze Airways.
Based in Salt Lake City, Breeze is a low-cost carrier launched by David Neeleman, who previously founded JetBlue, WestJet, Azul, and Morris Air. Reaction has been favorable so far, says Mark Gibbs, SBD’s director of aviation. “The Inland Empire needs more choice in air travel, and based on early indications, residents appear eager to avoid long car trips on crowded freeways by booking their travel plans closer to home.” He notes that “SBD’s primary market includes IE residents living east of I-15 stretching from Victorville to Temecula who will be able to avoid long drive times to LA-based airports.” “With nearly five million residents in the Inland Empire, the region is the 12th most populous in the United States. However, the IE also ranks last in the nation’s top 30 for airline service,” Gibbs says. “SBD has increased its workforce by more than 20 percent over the past year” as the airport was preparing for the Breeze flights, adds Gibbs.
Other transportation milestones include the recent opening of the Redlands Passenger Rail Project, known as Arrow. Operated by Metrolink, the 9-mile route between downtown Redlands and downtown San Bernardino includes five stations and connects residents to Metrolink lines in other Southern California counties. Besides local commuter service, there is also daily round trip express service to Los Angeles. Redlands residents are looking forward to the 2023 opening of a new downtown food hall, Redlands Public Market, in the renovated Mutual Orange Company Packing House. Meanwhile, Janice Penner, executive director of Riverside Downtown Partnership, notes that “downtown Riverside gained 64 new businesses in 2021 and 59 in the first ten months of 2022, drawn in part by the favorable economic outlook for the city, and the growth in downtown residents.
The Riverside Downtown Partnership looks forward to continuing growth in new businesses in 2023 with the opening of new residential developments such as The Mark and new mixed-use developments like Riverside Alive on the horizon.” The coming year should also see more visitors to the Inland Empire’s largest city. “The Riverside Convention & Visitors Bureau, Riverside Sports Commission and Riverside Convention Center is excited for 2023-2024,” says Shaheen Roostai, executive director of Riverside Convention & Visitors Bureau/Riverside Sports Commission. “Comparing tentative and confirmed events on the books during the same time last year, the Riverside Convention Center has seen an 11.5 percent increase in projected events, indicating growing demand for conventions, meetings, and events. We are looking forward to hosting more visitors in downtown Riverside.”
Temecula is becoming an increasingly sophisticated destination, drawing visitors with its distinctive restaurants, wineries and resorts. Visitors can also find breweries, locally distilled spirits, and creations like “Kompoocha,” a flavored, fermented tea beverage that gives a portion of its kombucha sales to dog rescue organizations. Owners Victoria Monroy and Christian Larsen plan to expand into their own brewery space this year. While several cities are seeing more downtown boutiques and eateries, area shopping centers are also adding tenants. The Agave Room, Punch Bowl Social’s 90-seat mezcal and tequila lounge, recently opened at Victoria Gardens in Rancho Cucamonga. South Coast Plaza in Costa Mesa plans to welcome Italian designer Missoni this spring to its extensive lineup of luxury shops. The Greater Palm Springs area continues to add hotels, restaurants and resorts.
Famed restaurateurs Mary Sue Milliken and Susan Feniger plan to open “Alice B.,” their Palm Springs restaurant and bar, this spring. Later in the year Tommy Bahama launches its first resort project, Tommy Bahama Miramonte Resort & Spa, located in Indian Wells. Tommy Bahama, which already has restaurants in Palm Springs and Palm Desert, plans to debut a new concept for an indoor/outdoor restaurant at Miramonte, transform the bar experience, and open a retail boutique for its clothing, accessories and home goods. Villa suites will be redone with Tommy Bahama furnishings. The property’s luxury spa, The Well, will feature Tommy Bahama products. Overall, the Inland Empire job market recovered faster than anywhere in Southern California, with payrolls and a labor force climbing above pre- pandemic levels, according to a new economic report.
The Southern California Association of Governments report documents San Bernardino and Riverside counties’ growth as a global supply chain hub, adding 63,700 jobs in transportation, warehousing and wholesale trade since shortly before the pandemic. Other major employment gains have been in leisure and hospitality, which has fully recovered from its early pandemic losses and is up 17,600 jobs year-over-year, and the government sector, up 9,400 jobs year-over-year. “Barring a recession, Inland Empire labor markets will continue to perform well,” says Dr. Manfred Keil, chief economist for the Inland Empire Economic Partnership. “Clearly, the two-county region’s role in the supply chain is driving much of this, though sustaining growth in the long-term would benefit from prioritizing a diverse range of industries.” However, housing affordability and rising interest rates are among the biggest challenges.
Even as home sales have fallen for the past 15 months, higher prices and mortgage rates have reduced affordability by one-third, Keil says. “Housing affordability becomes an even bigger issue as more and more people move to the IE, forcing prices up even higher,” Keil says, noting studies that have shown the Inland Empire among the fastest-growing population centers in the country. The good news for Inland Empire homebuyers is that prices have decreased slightly in some locations, and there are fewer bidding wars for properties, which are spending more days on the market. The not-so-good news is that increased mortgage interest rates mean housing payments will be higher than in recent years. “More homes for sale, less competition, and fewer homes selling above asking price all point to a more favorable market environment for those who were outbid or sat out during the past two years when the market was fiercely competitive,” according to the California Association of Realtors.
But rising mortgage rates have many home shoppers concerned about affordability these days, so lenders are looking for ways to make the numbers work. “Bank of America has some very helpful programs and resources for first-time buyers in the Inland Empire,” says Colleen Haggerty, senior vice president of media relations. “For example, we have the Affordable Loan Solution, which is a fixed-rate loan with a down payment as low as 3% and lower mortgage insurance requirements. This can be coupled with two grants that we offer to Inland Empire borrowers to help cover upfront costs, which many buyers cite as the biggest hurdle to owning a home. Neither grant needs to be repaid back—it is free to the borrower. America’s Home Grant offers up to $7,500 to put towards non-recurring closing costs. Down Payment Grant offers up to $10,000 towards the down payment or 3% of the purchase price, whichever is less.” During UC Riverside’s Oct. 5 Inland Empire Economic Forecast Conference, economist Christopher Thornberg noted that higher interest rates mean potential move-up buyers may decide to stay put for the time being, not wanting to give up the low mortgage rate on their current home.
That means their starter homes won’t be coming on the market in the near future. Overall, California needs to build more housing to deal with affordability as well as labor issues, he told business executives during his presentation at the Riverside Convention Center. “Lack of workers has everything to do with lack of housing.” According to Thornberg, a 2023 economic downturn isn’t likely unless the Federal Reserve continues to raise interest rates. He describes current economic conditions as a “recalibration—we need to recognize that and not panic.”
