The developer of the Southern California Logistics Centre in Victorville is close to naming a tenant for the largest warehouse-distribution building in the project's first phase, a structure that will cover 1 million square feet.

Negotiations continue and the tenant's identity will be withheld until those talks are finished, probably in about 30 days, said Brian Parno, vice president of real estate development for Stirling Capital Investments LLC in Foothill Ranch.

Parno described the would-be tenant as a Fortune 500 company that will use the entire structure at the 2,500-acre logistics center as its U.S. distribution headquarters.

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Photos By Larry Rose

Brian Parno, vice president of real estate development for Stirling Capital Investments LLC at the Southern California Logistics Centre.

"They're kind of an under-the-radar operation," Parno said April 28, a day before he spoke to about 125 High Desert business and government officials about the latest industrial development at the former George Air Force Base. "But we're going to be glad to have them as a tenant."

Finding one tenant for such a large building is a sign that the region, despite its economic downturn is still a hot logistics market, Parno said.

"There aren't very many places in the Inland Empire where you can put a warehouse/distribution center this large anymore," Parno said. "But we aren't surprised we found one tenant. That was our goal all along."

Atlanta-based Newell Rubbermaid moved into a 407,612-square-foot warehouse/distribution center at the logistics center in October. The company, which manufactures and distributes food storage, home organization and refuse disposal products, employs about 80 people there.

Two other logistics buildings, of 123,000 and 100,000 square feet, are finished and are being marketed by CB Richard Ellis Ontario. Stirling Capital is working on two other logistics structures, a 690,000-square-foot and a 445,000-square-foot building that are expected to be ready by mid-2009.

A 296,000-square-foot warehouse-distribution center is expected to be ready in two weeks, Parno said.

Those six buildings, along with the soon-to-be-filled 1 million-square-foot structure, represent about half of the logistics center's first phase, Parno said.

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A Fortune 500 company will use a 1 million-square-foot structure in Victorville as its U.S. distribution headquarters.

All seven structures will represent about half of the center's first phase. Collectively, those seven buildings are expected to employ 750 to 800 people, Parno said.

So far, Stirling Capital - which developed the city of Lake Forest in South Orange County but has never redeveloped a former military installation until now -- has spent about $100 million on the logistics center

The project is about three miles west of Interstate 15, one of the busiest freight corridors in the United States. Victorville officials have said they expect the entire renovation project to create about 24,000 jobs and pump $3 billion a year into the economy.

"There are about 8,500 acres up here that we can develop," Parno said. "There's so much space to develop, there's no way we can see to the end of this thing."

Stirling Capital is responsible for the non-airport part of the base restoration. Stirling Enterprises, its parent company, is the entire project's master developer.

The logistics airport is an aviation and air cargo facility that serves international and domestic needs. It includes hangars, warehouses, two intercontinental runways, and it can handle commercial and military aircraft 24 hours a day.

The logistics center - the part of the base redevelopment project Stirling Capital is responsible for - includes a corporate office complex, international air cargo facilities and aviation maintenance facilities.

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Part of the first phase of construction of the Global Access project by the old George AFB in Victorville.

The airport and logistics center will be served by the Southern California Rail Complex, a 3,500-acre intermodal facility that will feature 20 million square feet of distribution and manufacturing space.

Burlington Northern Santa Fe Railway and Victorville officials are currently negotiating to bring that project to the logistics center.

"The intermodal will make the High Desert a lot more attractive for logistics operations, and it will be great for the environment because it will get a lot of trucks off the road," Parno said. "It will help, but we don't need it to be successful. We got Newell Rubbermaid without it."

Converting a former military base to civilian and commercial use has been difficult, Parno said.

"We've made some mistakes, but we've learned from them. But there have been a lot of environmental and technical issues, and it's been a lot of hard work."

Signing tenants for the remaining industrial building won't be difficult, said Jay Dick, senior vice president with CB Richard Ellis Ontario.

"Where in the Inland Empire are you going to build a project this large?" said Dick, one of two brokers in charge of finding tenants for the logistics center. "Even with the price of gas as high as it is it's still cheaper to go to the High Desert. Perris and Moreno Valley are about as far away from the Los Angeles and Long Beach ports as the High Desert, and they're running out of space."

"I know we're in a recession, but I'm still bullish on the High Desert market," Dick said. "I think everyone agrees we'll come out of this eventually."

Stirling Capital signed on to the airport redevelopment project in 1999.

Victorville agreed to contribute up to $40 million in infrastructure improvementsfunded by redevelopment dollars and federal and state grants.