Ulta Beauty warehouse and its 600 jobs appear destined for Fresno site

There has been no formal announcement, but indications are that Ulta Beauty has selected Fresno as the site of a large distribution center that will generate more than 600 jobs by the time the facility is in full operation.

Fresno city leaders identified Ulta Beauty, the largest beauty retailer in the nation, in November after the company deemed Fresno as its “preferred location” for a 670,500-square-foot warehouse from which it would fulfill orders from its growing online sales business.

Other Valley places under consideration by the company were Visalia and Bakersfield, as well as sites in Utah and western Nevada.

Ulta Inc. is the division of the company that deals with e-commerce and distribution centers.

Clayco, a Chicago-based construction firm, has set up an office trailer at the site at the northwest corner of East and Central avenues. The Clayco website includes among its current projects the large Fresno distribution center and identifies Ulta Beauty as the occupant. Prologis Inc., a San Francisco development company, is the client for whom Clayco is building the center, and Ulta will be a tenant of Prologis. “The project is expected to be completed in December of 2017,” according to the project page on the Clayco website.

 

Additionally, Ulta has posted a job opening for a human resources director for a Fresno distribution center on the “careers” page of its website.

Fresno officials could not confirm whether Ulta has chosen Fresno, and company representatives could not be reached.

Ulta is a prize that the city has pursued vigorously since last fall, when brokers for the company approached Fresno economic development leaders looking for a site.

In November, the Fresno City Council approved a 30-year package of sales tax rebates and other incentives worth up to $18 million to the company if Fresno was chosen for the $110 million warehouse project.

In addition to the city’s incentive package, the Governor’s Office of Business and Economic Development agreed to provide $8 million in California Competes state tax credits to the company if it opened the warehouse in California with a net increase of 542 full-time employees in the state.

To qualify for the city’s incentive package, Ulta must create the equivalent of at least 500 full-time jobs at the Fresno site; if the company fails to achieve that by the end of 2022, it would have to repay whatever rebates it had received to that point.

But in a report to the City Council last fall, the company estimated that its workforce would be about 642 full-time employees within five years, with up to 700 part-time employees at peak times of the year.

Ulta representatives told the state in November that the distribution center would serve almost 400 Ulta Beauty stores across the western U.S., as well as handling about 25 percent of the company’s e-commerce volume once the warehouse becomes fully operational. Ulta operates 974 retail stores across 48 states, including two stores in Fresno and one each in Clovis, Visalia, Hanford and Porterville.

Ulta will be a leasing tenant at the 38-acre site at Central and East avenues, in an industrial area at the south end of Fresno. The property is owned by G3 Development Co., which also developed the nearby North Pointe Business Park. The property was annexed into the Fresno city limits late last year.

Larry Westerlund, the city’s economic development director, told the city council last month that in addition to the city and state incentives, Ulta received approval from Pacific Gas & Electric Co. for discounted economic development utility rates and is engaged in talks with Fresno County for additional assistance.

“Most of the conditions the company had hoped to achieve prior to a final decision to create the proposed jobs … in Fresno have been completed,” Westerlund said.

“The company conservatively projects retail sales of $66 million in the first year (at the Fresno warehouse) and expects e-commerce sales to continue to grow each year starting with 20 percent growth in 2019 …” Westerlund said. “In the last two years, the company reported Internet sales growth at 40 to 70 percent.”

An economic analysis of the project commissioned by the city last fall estimated that even after paying the incentives, Fresno stands to realize about $42 million in additional sales and property tax revenue over the next 25 years.

That doesn’t include the economic ripples of wages earned and money spent by workers filling new jobs at the distribution center – employees that the analysis estimates would be paid an average of $34,000 at initial startup. Total wages paid to employees over 30 years could amount to more than $910 million, generating a total economic effect of $5.4 billion in sales and purchases in Fresno by Ulta employees.

Ulta Beauty, headquartered in Bolingbrook, Ill., is a publicly traded company listed on the Nasdaq exchange under the stock symbol ULTA.

This story was originally published March 6, 2017 at 11:29 AM with the headline "Ulta Beauty warehouse and its 600 jobs appear destined for Fresno site."