Internet retail behemoth Amazon has chosen Fresno as the site where it will open an order filling center that is expected to employ about 1,500 workers when it opens and eventually build up to 2,500 employees.
The announcement early Friday comes nearly six months after the Fresno City Council adopted a generous package of tax rebates and other incentives as an enticement to the Seattle-based company.
Golden State FC LLC, a wholly-owned subsidiary of Amazon, identified property at Orange and Central avenues – part of the North Pointe Business Park industrial complex at the southern edge of Fresno – as its “preferred site” for an 855,000-square-foot warehouse. A development team for the company first approached the city in September 2016.
Earlier this year, Mayor Lee Brand and other Fresno leaders traveled to Seattle to personally make the city’s case to the company.
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Our expectation is that in the next 30 days they’ll start construction, and it will probably take about a year to build.
Fresno Mayor Lee Brand
“We’ve been working behind the scenes very feverishly, making sure to get all the permits in order and the plan checks, getting to the point where we’ll be ready for a ground-breaking ceremony with shovels in the next couple of weeks,” Brand said Friday. “Our expectation is that in the next 30 days they’ll start construction, and it will probably take about a year to build.”
Brand added, “By next year, we expect them to open initially with 1,500 employees. We think they have the capacity for about 2,500 employees over time.”
Akash Chauhan, Amazon’s vice president of North American operations, said Fresno represents a significant expansion of Amazon’s network in the Central Valley. This will be its fifth fulfillment center in the region; it has three warehouses in Patterson and Tracy, and another under construction in Sacramento. Elsewhere in California, Amazon has fulfillment centers in San Bernardino, Redlands, Moreno Valley, Rialto, Eastvale and Newark.
“There are several factors we consider when deciding on where to place a new fulfillment center,” Chauhan said. “Most importantly, we look to see where we can improve Prime benefits with faster shipping speeds for customers and where there is a dedicated workforce that can raise the bar of our operational excellence.”
Amazon said the Fresno center will handle orders for smaller-sized items such as books, electronic devices and children’s toys. The centers make ample use of robots to ferry bins of products to workers who pull items to assemble customer orders for shipping. A company spokeswoman said a few of Amazon’s order-fulfillment centers processed more than 1 million orders in a single day during the 2016 holiday season.
As of Friday, the company has not yet posted jobs to be filled at the Fresno site. Amazon lists its available jobs on its website: www.amazon.jobs/en.
The warehouse will represent a capital investment of about $200 million in construction, robotics, fixtures and furniture, according to city leaders. Seefried Industrial Properties, an Atlanta-based development company that has built at least two other large fulfillment warehouses for Amazon, has reportedly already filed plans with the city in apparent anticipation of the site selection.
Seefried Industrial and Dermody Properties, based in Reno, are the developers of the center. Upon completion, Amazon will lease the property from Dermody.
We look to see where we can improve Prime benefits with faster shipping speeds for customers and where there is a dedicated workforce that can raise the bar of our operational excellence.
Akash Chauhan, Amazon’s vice president of North American operations
The incentive package approved by the City Council in December for Amazon calls for Fresno to rebate 90 percent of the city’s share of property taxes that Golden State FC would pay on the increased value of the developed site for the next 30 years. The city would also rebate Fresno’s entire share of sales and use taxes paid by the company on purchases it makes for goods and services in Fresno.
The incentives are dependent upon Amazon creating at least 750 new jobs at the center, and there is a hard cap of $30 million on the total benefits to the company. An economic analysis of the project by the city estimates that the actual property tax rebates will amount to about $15.3 million over 30 years, plus about $750,000 in sales tax rebates. But the analysis anticipates that Fresno and the surrounding area stand to benefit from more people earning wages who are then spending their money at local businesses – an economic “ripple effect” through the community.
That same analysis forecast that the average initial wage for workers at the center would be about $26,000 a year, or just under $15 an hour based on 1,750 work hours in a year.
At 855,000 square feet, the Amazon building will cover nearly 20 acres. By comparison, the Save Mart Center arena at Fresno State covers a footprint of about 200,000 square feet – less than a quarter of the size of the Amazon facility. Retailer The Gap has a distribution center near the Fresno Yosemite International Airport that covers a total of about 1.5 million square feet between its two large buildings.
The Amazon site in Fresno is the same property that was under consideration in 2015 by clothing retailer Nordstrom as a distribution center. Nordstrom later put its plans for a distribution center in the Valley on hold. The property is about a half-mile from the location where Ulta Beauty, the nation’s largest retailer of cosmetics, will occupy a 670,500-square-foot distribution warehouse.
Ulta announced in March its choice of Fresno as the site for its facility that will initially employ more than 500 workers and could swell to more than 1,000 during peak seasonal periods.
855,000 square feet: size of the proposed Amazon order filling center in Fresno
200,000 square feet: size of Save Mart Center
Both Ulta and Amazon are receiving state tax credits for the Fresno projects from GO-Biz, the Governor’s Office of Business and Economic Development to open operations in California.
“This is exactly what I wanted,” said Brand, who as a City Council member wrote the ordinance that provides for economic incentives for companies that generate significant numbers of jobs by locating or expanding in Fresno. “This is a huge shot in the arm for the city. It’s consistent with my vision to transform Fresno.”
Brand’s long-term goal is to attract logistics and light-industrial businesses to an area of south Fresno called the “industrial triangle” bounded generally by Highway 99, Highway 41 and Central Avenue. In a meeting Wednesday with The Bee’s editorial board, Brand said “the major challenge has been to build up infrastructure over time in that area,” including water and sewer lines, to make the area more or less shovel ready for development for businesses like Amazon, Ulta and others.
His hope is that an influx of businesses into the triangle may generate as many as 10,000 jobs over the next eight to 10 years. That would be a major step toward reducing Fresno’s unemployment rate – chronically several percentage points above the state and national averages – to 5 percent or less and put a significant dent in the city’s family poverty rate of almost 25 percent. “I want to get Fresno to a point where one-quarter of the population is not perpetually in poverty,” Brand said.
The Fresno announcement is one more step in Amazon’s plan announced in January to add 100,000 employees nationwide to its ranks by mid-2018, bringing the company’s total workforce to more than 280,000. Since 2012, the company’s Amazon Operations has created more than 14,000 jobs in California.
Amazon lists its available jobs on its website: www.amazon.jobs/en. As of Friday, the company has not yet posted jobs to be filled at the Fresno order-fulfillment center that is expected to open in 2018.