Fresno courting Amazon for e-commerce site and 2,000 new jobs

DECEMBER 13, 2016 6:24 PM

BY TIM SHEEHAN

A potential e-commerce warehouse for clothing retailer Nordstrom fell by the wayside earlier this year, but the city of Fresno may offer a hefty financial lure to another potential suitor with a bigger name for the same southwest Fresno site.

The Fresno City Council on Thursday will consider a package of economic incentives worth up to $30 million over the next 30 years to persuade Golden State FC LLC – a wholly owned subsidiary of internet retail giant Amazon.com, according to the Governor’s Office for Business and Economic Development – to build an 855,000-square-foot order-fulfillment center at Orange and Central avenues. The site is considered “the preferred site” for Golden State FC, according to a staff report by economic development director Larry Westerlund.

An economic analysis of the project, dubbed with the code name “Project Cougar” by the city, indicates it could initially hire 2,000 or more full-time employees; that workforce would be augmented by a significant number of seasonal employees at peak times of the year. Future expansion of the center could boost the number of employees by several thousand.

The economic incentives being recommended to the council include a rebate of 90 percent of the city’s share of property taxes for the site for 30 years. The proposal also calls for a rebate of 100 percent of sales and use taxes paid by the company on purchases it makes within the city. But the incentives are dependent on Golden State FC creating at least 750 new jobs at the center, valued at $15,000 for each direct, full-time job. The financial lures are less for on-call or seasonal jobs at the center.

Westerlund said the city was approached by a development team working on behalf of Golden State to evaluate the site, which is part of the North Pointe Business Park, an industrial-zoned complex developed by the Parnagian family’s G3 Development. “Golden State FC LLC has requested that an incentive agreement be approved so that they can move forward on their analysis of this location and ultimately make a final decision,” he reported. “The city’s approval of this incentive agreement is a key step in the selection process.”

The city’s analysis suggests that between real estate, construction and investments in robotics and picking equipment, Golden State FC would likely invest $200 million to get the warehouse up and running by 2018. “They want to be operational for their peak period in 2018,” Westerlund said Tuesday. “It’ll take about a year for construction, or maybe a little bit faster than that, but they’ve got a very aggressive timeline” if the company opts to move forward with the Fresno location.

Westerlund said the rebates represent no out-of-pocket investment by the city; instead, it’s based on money the city would realize from the increased value of the land once the company builds and equips the fulfillment center. “It’s a net gain basis,” he said. “If that land stays empty for 10 years, we don’t realize any increase of property taxes. We’re only sharing the net growth of that property value over 30 years.”

The $30 million value is also a hard cap on the potential incentives; the city’s economic analysis estimates the actual property tax rebate over 30 years at about $15.3 million, along with about $750,000 rebated from sales taxes paid by the company.

Beyond the rebates, the city would expect to reap the benefits of about 2,000 new jobs at the center at an estimated average wage of $26,000 per year, creating a potential payroll of more than $2.2 billion over 30 years – money that would circulate within the community as employees spend at local businesses, buy homes and pay sales and property taxes.

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