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California Cities Resist Industrial Development, Theater Climate Squeezes Regal Cinemas Parent, Construction Equipment Sales Decline

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California and New Jersey are among states considering development moratoriums and other limits on large industrial facilities. (James Hooker/CoStar)
California and New Jersey are among states considering development moratoriums and other limits on large industrial facilities. (James Hooker/CoStar)
CoStar News
August 19, 2022 | 9:46 P.M.

California Cities Resist Industrial Development


Several cities in Southern California’s Inland Empire, among the nation’s most active regions for warehouse purchases and leasing, are now pushing back against development in a bid to curb pollution, traffic congestion and other effects of what some have described as industrial sprawl.

In just the past week, city officials in Norco enacted a 45-day moratorium on the construction of warehouses and other industrial facilities, and Pomona officials extended a similar existing freeze for another 10 months. Those moves followed pauses enacted or reviewed in the past few years by other cities in the busy region east of Los Angeles, including Riverside, Redlands, Chino and Colton.

“We’re trying to strike a reasonable balance between advocates for change and advocates to support the industry,” Mark Tomich, Colton’s development services director, told Bloomberg last week after that city's recent extension of an existing warehouse development moratorium through May 2023. “It’s not an easy road to ensure that all parties are satisfied.”

Concerns among residents and some urban planners have been echoed by members of the California Legislature, where lawmakers are considering a measure that would require developers to build warehouses at least 1,000 feet from houses, apartments and other “sensitive uses” in Riverside and San Bernardino counties. The proposal, covering most of the Inland Empire, faces massive opposition from businesses, and some analysts consider it unlikely to pass in its current form.

Several other U.S. cities and states are dealing with how to balance residents’ needs with those of a growing industrial ecosystem still struggling to recover from the pandemic. Some cities have outright banned certain proposed projects.

In New Jersey, planning officials issued guidelines to help the state’s more than 500 municipalities update zoning rules in a bid to prevent industrial sprawl, as state lawmakers consider development limits and community input requirements among other measures.

Pandemic Fallout Squeezes Regal Cinemas Parent


Pandemic-related financial hangovers have placed U.K.-based Cineworld Group, the world’s second-largest movie theater operator, on the verge of filing for bankruptcy restructuring, according to a Wall Street Journal report citing sources familiar with the matter.

Cineworld is the parent of Regal Cinemas, which reports 505 U.S. locations and is America’s second-largest movie theater chain by location count after AMC Theatres. The Journal reported that Cineworld has engaged lawyers and consultants to advise it on the bankruptcy process in the U.S. and the U.K., as the theater industry struggles to fully recover from mass global closures of the pandemic’s first year.

Cineworld has reported a gradual recovery in attendance during the past year but has so far not been able to restructure its finances in response to lagging attendance and revenue that some analysts project won’t return to pre-pandemic levels for another two years.

That’s in contrast to Leawood, Kansas-based AMC Theatres, the world’s largest cinema chain, which has raised more than $2 billion in equity and debt financing since the start of the pandemic to shore up its balance sheet. The three largest theater chains have yet to return to profitability, though losses have narrowed in the past year.

Among other financial challenges, the big chains still owe considerable amounts to landlords for rents that were deferred after theaters were closed for most of the pandemic’s first year. Cineworld was dealt a blow last month when a British court ruled the company and a rival operator cannot be excused from paying rents that were owed but not paid after the pandemic forced cinema shutdowns in early 2020.

Construction Equipment Sales Decline


Declining sales of excavators, those earth-moving machines that are crucial to most construction projects, could be another sign of slowing real estate demand in a volatile U.S. economy.

Canada-based Ritchie Bros., a global asset management firm specializing in heavy equipment and trucks used in multiple industries, reported U.S. sales volumes and pricing for excavators declining over the past three months from year-earlier levels.

The firm’s monthly trends report for August found prices for large excavators down 9% from year-earlier levels, with mini-excavator prices down 5%. The opposite is happening in Canada, with prices up 12% year over year for large earth-movers and up 31% for the smaller versions.

The picture is different for some transportation equipment. The firm said U.S. truck tractor prices are 27% higher than year-earlier levels, with Canada’s up 25%.