03:13 PM PDT on Friday, April 3, 2009

By AARON BURGIN
The Press-Enterprise

As the Inland area rises to near the top of lists on foreclosures and unemployment, officials in two southwestern Riverside County cities are courting new business by distancing themselves from the rest of the county.

Instead, officials in Murrieta and Temecula are pointing out in marketing materials and meetings with potential suitors how their cities' demographic profiles, unemployment numbers and commercial vacancy rates are more akin to San Diego County.

"Especially in the last 18 months, the Inland Empire has been getting racked with negative publicity on a national scale," Temecula Assistant City Manager Aaron Adams said. "You get the connotation that every second house is in foreclosure. We are trying to do our best to dispel those rumors and the connotation associated with that."

Adams says Temecula's favorable demographic similarities to San Diego played a key role in the $120 million addition to The Promenade mall, landing stalwarts like P.F. Chang's and Coldwater Creek women's clothing retailer.

"The demographics within 20 miles of Temecula are very compelling and make a good argument as to why they chose to locate here," Adams said.

Living at the border of San Diego and Riverside counties, Temecula and Murrieta residents have historically identified more with their southerly neighbors. Shopping choices are more likely to be Horton Plaza in downtown San Diego over the Galleria at Tyler mall in Riverside. To and from work, more take southbound Interstate 15 to work more than northbound I-15.

One regional economist said by marketing the area as more like San Diego than Riverside, the cities are trying to convince developers and businesses that they will emerge from the downturn faster than the rest of the Inland area.

"It's a reasonable assessment, and I tend to agree with that assumption," said Christopher Thornberg, of Los Angeles-based Beacon Economics.

No offense, none taken

Murrieta's Economic Development director, Bruce Coleman, said the strategy means no disrespect toward Riverside County.

"From a jurisdictional standpoint, we are very proud to be in Riverside County," he said. "But our economy is much more tied to San Diego County."

Riverside County officials said they don't take offense, likening it to the tourism strategy employed in the Palm Springs and Coachella Valley region for years. In the end, they said, the entire county benefits from the strategy's success.

"The eight (eastern Riverside County) cities have promoted themselves as a destination resort, and no one has raised an eyebrow," said Tom Freeman, spokesman for the Riverside County Economic Development Agency. "The end result is that entire county wins from the jobs that are created and the revenue that is generated."

Southern alliances

Coleman said marketing Murrieta in San Diego County was one of his first tasks when he was hired in April 2008.

Since then, Murrieta has been active in several San Diego-area trade groups, including the San Diego chapter of the National Association of Industrial and Office Park developers -- Coleman is on the group's advisory board -- and BIOCOM, a group that promotes the life-science industry in San Diego County.

Murrieta recently co-sponsored a tour of office parks in northern San Diego County, as Coleman personally handed out business cards to attendees and the city provided canvas bags with the city logofor those taking the tour.

Membership in the groups cost the city about $3,000. Coleman said it is a frugal -- but effective -- way to market Murrieta to the south.

"It is mostly to get our name out there, and let (developers) know that we are physically close to San Diego County and are the next logical location for San Diego's future," Coleman said.

"We may see some short-term benefits, but this is really part of the 20- to 30-year strategy of diversifying Murrieta's economy."

Temecula plans to use the information gathered from its local brokers and host meetings with San Diego County brokers associations as part of its marketing efforts.

Some San Diego developers have already started to see the area's potential.

On its Web site, San Diego-based Whitaker Investment Corp. indicates that most of its projects are in San Diego County. The firm has ventured north for at least two projects, in Murrieta and in Wildomar.

Whitaker Executive Vice President Eric Dye said he believes the area is a "future growth market."

Strong ties

Murrieta and Temecula have strong historical, social and economic ties to San Diego County.

The area that composes southwestern Riverside County was originally part of San Diego County until 1893, when Riverside County was formed. Until the early 1990s, southwestern Riverside County
residents used to get San Diego television station broadcasts.

During the 10-year housing boom that ended in 2007, Temecula and Murrieta's population more than doubled, mostly with San Diego County transplants who bought cheaper homes in Temecula and continued to work and recreate in the south.

About 67,000 people still commute from southwestern Riverside County into San Diego, according to statistics from the San Diego Association of Governments. Fifty-four percent of Temecula residents said in a recent survey commissioned by Temecula and the Western Riverside Council of Governments that they commuted to San Diego, compared to only 7 percent who said they commuted to Riverside and San Bernardino.

Coleman said the region is in San Diego County's growth path.

"San Diego's growth isn't going south, because that is the international border, and it isn't going east because that is the mountains," Coleman said, also adding that San Diego's western boundary is the Pacific Ocean. "The only way they can grow is north."

It's the lower unemployment rate and the higher median income and education of southwestern Riverside County residents that are touted by local officials at events such as the International Council of Shopping Centers annual convention, a gathering to lure developers to a specific community, Adams said.

Those presentations included maps showing how close the cities are to San Diego.

Reach Aaron Burgin at 951-375-3733 or aburgin@pe.com