SAN BERNARDINO, CA-In one of the Inland Empire’s largest and most important real estate transactions in years, Dallas-based Hillwood Investments says it has sold a 60-acre parcel on the grounds of the former Norton Air Force Base here to department-store giant Kohl’s Corp. to build a 651,880-sf distribution center that could eventually employ nearly 1,000 local residents.

The value of the transaction goes far beyond the jobs it will create or the $25 million that Kohl’s plans to spend on its new project. More important, experts say, is that the deal is the first major milestone in the hard-fought effort by both San Bernardino officials and the private sector to convert the closed military base into an engine that will help power the local economy for years to come.

Wisconsin-based Kohl’s plans to build a large distribution center on the site is also a sign that the department-store chain has big plans to expand in Southern California, a move that would provide a much-needed boost to the retail property market across the five-county Southland.

Though Kohl’s officials have consistently refused to discuss details about their expansion efforts in the region, reported earlier this year that the chain has told SoCal brokers and officials in different cities that it wants to open as many as 35 stores in the area over the next two years. Its first store is already under construction in Orange County.

“Through the diligent efforts of the people at Hillwood, the mayor and other community officials, Kohl’s is looking forward to establishing a long and productive relationship with the people of San Bernardino,” says Ken Bonning, senior vice president of logistics for Kohl’s.

The US Defense Department closed the 2,000-acre Norton Air Force Base in the wake of major military spending cutbacks in the 1980s and early ‘90s. Control of the property was officially turned over in 1994 to the City of San Bernardino, which began marketing the project as the San Bernardino International Airport and Trade Center.

The city chose Dallas-based Hillwood as the project’s master developer. Hillwood, which is headed by the son of billionaire and former presidential candidate H. Ross Perot, is perhaps best known for its 9,600-acre Alliance Airport in Fort Worth that has attracted more than 100 companies and created more than 20,000 jobs since construction began about 10 years ago.

Initially, says Hillwood Investments SVP John Magness, Kohl’s will employ 300 associates at its new San Bernardino center but another 600 could be added to the payroll as its Southland business grows. Part of Hillwood’s deal with Kohl’s allows the retailer to expand by 200,000 sf over the next five years, Magness adds.

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