GAP SECURES $4.25M STATE TAX CREDIT FOR FRESNO EXPANSION

Published On April 12, 2018 – 2:12 PM
Written By Gabriel Dillard

The Gap, Inc. has been awarded a $4.25 million tax credit to support its expansion plans at its Fresno campus, where an e-commerce fulfillment center has been planned.

A committee of the Governor’s Office of Business and Economic Development, or GO-Biz, today approved a total of $76 million in tax credits for 63 companies as part of the California Competes program to help businesses create new jobs in the Golden State.

San Francisco-based Gap was awarded a tax credit for the expansion of its San Francisco headquarters as well as a new e-commerce fulfillment center planned near Fresno Yosemite International Airport. The retailer plans to invest $100 million in the expansion, according to its tax credit agreement, which would create an additional 698 jobs. According to the GO-Biz agreement, at least 75 percent of the net increase in full-time employees will work at least 75 percent of the time in Fresno.

The Gap indicates it will add 162 new full-time positions in the 2018 tax year, 502 for 2019 ramping up to 698 by 2021.

Panorea Avdis, GO-Biz director and chair of the California Competes Tax Credit Committee, said in a statement: “In the last four years, hundreds of companies have made commitments to expand in the state and GO-Biz will continue to host informational workshops and work with our regional and local partners to ensure companies of all sizes know about and apply for these tax credits.”

The City of Fresno announced last month that The Gap would relocate its e-commerce operation to Fresno, bringing at least 515 new full-time employees. Full operation will ramp up over a three-year period.

The agreement is made possible through a 30-year economic incentive agreement that will provide performance-based incentives based on the creation of at least 500 new net jobs, and possibly hundreds more for part-time and seasonal needs.

The agreement will also ensure continued sustainability for the 351 employees currently working at the Fresno Gap distribution center, which opened in 1999.

https://thebusinessjournal.com/gap-secures-4-25m-state-tax-credit-fresno-expansion/

Construction milestone reached at Manteca Commerce Center

 

Central Valley Business Times

April 13, 2018

  • Dermody Properties puts in first wall panels for industrial building
  • “We are excited to be expanding our investments in the Central Valley”

The tilt-up and placement of the first wall panels for a 286,072- square-foot building that could be used as a distribution center has been completed by Dermody Properties in the Manteca Commerce Center, the Reno, Nevada-based company says. Dermody builds and manages logistics real estate.

The new building will feature a total of 50 dock doors, two grade-level doors, a 36-foot clear height and 156 car parking spaces. Construction is expected to be complete in the second quarter.

“We are excited to be expanding our investments in the Central Valley,” says Douglas Kiersey Jr., president of Dermody Properties. “The development of Manteca Commerce Center is consistent with our strategy of investing in key distribution markets with a high demand for industrial facilities and a well established transportation infrastructure.”

Manteca Commerce Center is located directly off of Highway 120, about 15 minutes south from the Port of Stockton, with access to Highway 99 and Interstate 5. The developer says the location provides “an ideal” West Cost distribution link to Fresno, Reno, Los Angeles and Las Vegas.

“Manteca Commerce Center is our second property in the Central Valley,” says George Condon, West region partner, Dermody Properties. “Companies are continuing to move from the Bay Area to the Central Valley to expand their businesses and lease Class-A warehouse space at a significant discount to the cost of Bay Area warehouses. Companies new to Northern California are also setting up shop in the Central Valley to serve the businesses and residents of the Bay Area.”

JLL is marketing the property. The project was designed by HP, Inc., and BCM Construction is the general contractor.

http://files.constantcontact.com/2cb20f61601/12d85a0b-161b-4ef2-85f1-4802f7ddbfea.pdf

Ex-Fed Ex building sold for $10.45M in Stockton

By BusinessJournal

 

The property at 4730 FIte Court in Stockton, a one-time Fed Ex ground facility, has sold for $10.45 million to Dermody Properties.

An industrial building which once house a Fed Ex ground facility in Stockton has sold for $10.45 million.

Dermody Properties, a company owning distribution, e-commerce and manufacturing sites throughout the U.S., purchased the location at 4730 Fite Court, which is 143,888 square feet off Arch Road, east of Highway 99 in Stockton.

“Dermody Properties has made significant strides at growing their footprint in the Central Valley and proved to be the best buyer to bring in, figure out this somewhat complicated transaction given the existing tenant, underlying sublease and other property related matters, and close on this well-located, quality asset,” said Jim Martin, SIOR, of Lee & Associates Stockton, who represented Dermody Properties in the transaction.

“This is further testament to how our Lee offices are able to execute assignments and work in partnership to provide excellent service to our customers,” Martin went on to say.

The seller was Stockton MAG, LLC., who was represented by Martin and Craig Hagglund, SIOR, of  Lee & Associates Oakland.

https://cvbj.biz/2018/04/05/ex-fed-ex-building-sold-for-10-45m-in-stockton/

Gap bringing fulfillment center to Fresno, expected to add more than 500 jobs

VISALIA INDUSTRIAL PARK UNDERGOING REMARKABLE GROWTH

Robert Rodriguez, region manager for West Coast distribution for Hilti, Inc., a European maker of industrial tools, stands in one of two distribution centers his company has in the Visalia Industrial Park, along with a separate repair building. He said the park is a sweet spot for transporting goods within a day across California and to much of Arizona and Nevada. Photo by David Castellon

Published On March 14, 2018 – 1:50 PM

With work underway to build Amazon and Ulta fulfillment centers in south Fresno, and plans to convert a former tire plant in Hanford into an electric car plant, three new buildings totaling more than 400,000 square feet in the Visalia Industrial Park didn’t grab a lot of attention from the general public.

But among people involved in manufacturing, warehousing and other businesses needing large spaces, the buildings commissioned by Diversified Development Group in Fresno, which has been developing and leasing commercial structures here for more than two decades, has drawn a lot of attention.

So much so that DDG, which built the buildings on spec, had two of the buildings leased or were negotiating leases on them with multiple tenants before construction was done. DDG Vice President Marcus Pignotti said he believes a lease deal for a single business to entirely occupy the 166,000-square foot third building is close at hand.

With that kind of interest among businesses to get into the Visalia Industrial Park, “That explains why we’re in site plan review for our next four buildings,” that would comprise another 689,000 square feet of combined industrial space on a separate, 33-acre parcel in the Industrial Park in northwest Visalia, Pignotti said.

Beyond that, DDG purchased last year another 150 acres of undeveloped land in the Industrial Park, where the company plans to build up to three million more square feet of industrial space, which could include a single, 1 million-square foot building, he said.

DDG isn’t the only business looking to develop or expand in the Visalia Industrial Park.

From 2016-2017, Visalia issued permits for more than 804,000 square feet of new buildings in the Industrial Park. In fact, in terms of new industrial development and expansions, experts say the Visalia Industrial Park and the neighboring Visalia Business Research Park are some the most active commercial real estate spots in the Valley after south Fresno.

Beside what DDG has in store, the former Heller Performance Polymers plant on Doe Avenue has been demolished, the ground leveled and now the owners are planning to build two 400,000 and more than 300,000 square-foot buildings there once they line up tenants, said Marty Zeeb, a Visalia commercial real estate broker.

In addition, UPS, which has had a distribution center in the Industrial Park for decades, has gotten so busy shipping packages that it recently purchased 58 acres, with plans to build a second state-of-the-art distribution center in the Industrial Park, while Golden State Overnight — a regional shipping service — has outgrown its facility, and is building a new, nearly 63,000-square-foot-facility.

Meanwhile, Perfection Pet Food — a division of Goshen’s Western Milling — is building a nearly 152,000-square-foot office and distribution center, while Hydrite Chemical Co. recently completed a more than $16.1 million expansion and capital improvement project.

That doesn’t include the 100-acre Research Park, where a 94-room Marriott Residence Inn and an Arco AM/PM convenience store and gas station are being built near the Fresno Pacific University satellite campus and two car dealerships already on the mostly vacant set of parcels.

It’s a far cry from the area’s modest beginnings in the mid 1960s, when businessmen Al Blain, Dana Clancy and Lloyd Pendergraft spearheaded an effort to widen Visalia’s mostly ag-based economy by creating sites zoned for various sorts of industrial businesses and purchased “not the best farmland” from Florence Doe, recalled Harry Tow, who was city manager at the time.

“They thought we needed an industrial park where industry didn’t have to think about putting in utilities and streets. It was done for them,” he said, adding that Blain, Clancy and Pendergraft had Visalia’s best interests at heart — so much so that as far as Tow knows, Blain, Clancy ad Pendergraft “didn’t make a dime off it.”

In the five decades or so since, the Business Park has grown from a handful of businesses to 379 — from Far West Distributors, which employs just five people, to VF Outdoor, a clothing distribution center employing about 1,200.

It isn’t just your usual industrial park with one big building or several comparable buildings and warehouses occupying one parcel. Instead, the Visalia Industrial Park is like a city in a city comprised of more than 16.6 million square feet of buildings occupying 381 acres spread over multiple blocks, with different buildings constructed in their own, particular styles.

Based on 2015 U.S. Census estimates, the latest figure Visalia officials could provide, 6,932 people worked at the Industrial Park, a third of them Visalia residents. Considering the expansions and new developments since then, the number likely has grown.

Before the recession, new developments were active in the Industrial Park but lulled in the years the economy spiraled, Zeeb said. But as that period passed and the economy improved, developers started actively planning again in 2013 and 2014, and over the last two or three years a lot construction and permitting has followed, he said.

The Industrial Park has several tenants with national and international reach, mostly involved in manufacturing, warehousing and distribution, including Jo-Ann Stores, Inc., VF and VWR — the latter a global supplier of lab and pharmaceutical supplies.

One of the main reasons is that Visalia is a “sweet spot” for most businesses with customers on the West Coast, whether they’re individuals ordering items via the web or department stores and other business selling those goods, said Robert Rodriguez, region manager for West Coast distribution for Hilti, Inc., a European maker of industrial tools which operates two distribution buildings and a separate repair center in the Visalia Industrial Park.

“Its a great spot for transit time,” he said.

Of course, Fresno can make the same claim, and Amazon officials have acknowledged that’s a big part of why it’s locating its 855,000-square-foot fulfillment center there.

The Visalia Industrial Park was in consideration for the Amazon and Ulta facilities, as well as a fulfillment center for Nordstrom department stores in 2016, but they all went elsewhere.

“We’re not chasing the big fish only,” said Devon Jones, Visalia’s economic development manager, noting that leasing several 25,000-squre foot buildings can create as many jobs locally as a single “big fish” tenant.

He noted that if an Amazon-sized business or a larger one ever wants to locate here, there remains about 1,000 acres of undeveloped pre-zoned land in the Industrial Park still available, all with sewage and other utilities close by to connect.

In fact, the City of Visalia last year submitted a proposal for Amazon to build its second headquarters in the city, along with numerous other U.S. cities that included Fresno.

Though the ecommerce giant opted not to consider any California sites, Mayor Warren Gubler said Amazon officials indicated they were “surprised” in a positive way by Visalia’s proposal, “and we weren’t even in their radar, and [now] we’re on their radar.

Among the selling points for the Industrial Park that several of the people interviewed noted is its close access to Highways 99 and 198.

In addition, “UPS is our best salesman, because you’ll have large companies that have locations on the East Coast and the South, the Indiana-Ohio area, Dallas. And when they need West Coast, UPS just looks at our area, Visalia being the perfect spot,” and recommends it, said Pignotti, noting that businesses increasingly rely on next-day delivery, and having a UPS hub literally blocks away in the Industrial Park is a big plus, as is having other next-day shippers there, including FedEx, Golden State Overnight and OnTrac.

Pignotti also credited Visalia’s government, which in recent years has streamlined the processes for permitting construction to the point that Jones said some permit applications can be approved within 30 days.

“Sometimes, less than that,” he said. “Because that’s the last thing somebody wants, being in some municipality where it takes forever to get a permit and get started, and they’ve had a delay, and they don’t want to do that again,” Pignotti said.

Among the reasons DDG builds in Visalia is “They’ve always met their timelines, they work with you, they get things going quickly. They don’t just sit around, so it has been good,” Pignotti said, adding that some cities can be extra attentive for Amazon-sized projects but are much less to smaller ones.

Rodriguez agreed, adding that “In the Hilti world — and we are global — Visalia is in discussions, mainly because of the support by the city and the [Visalia] Economic Development Corp.”

So much so that Hilti — which landed in the industrial park in the 1990s; moved later to a larger, 45,000-square-foot distribution center; opened a second, 20,000-sqare-foot distribution center; and opened a separate tool repair shop — is eyeing the industrial park to expand further, possibly tripling the current size of its distribution operations there, he said.

“My own personal perspective is Visalia has an excellent business park, and it’s known and it’s growing. There are warehouses and businesses going up left and right.”

Merced County Hopes A Deal With Port Of L.A. Turns Former Air Force Base Into Manufacturing Hub

  MAR 6, 2018

Just outside the city of Merced, slightly east of Highway 99 is what used to be Castle Air Force Base. Like most areas of the Valley, it’s rural. Across the road from the center are train tracks, and you can hear the railroad crossing signals ding. This unincorporated area of Merced County will soon become an inland port.

Now, there isn’t any water around; we’re still in the Central Valley. It won’t be the kind of port that serves ships and boats. It will be a place for products to be built and materials consolidated, and then sent to the Port of Los Angeles.

Today, two-thirds of the nearly-2,000 acre base is still an airfield, but the rest of it is the Castle Commerce Center.

“This is a site that has roughly about 75 tenants, about a 100 different lease holds,” says Mark Hendrickson, directory of community and economic development for Merced County. “We generate about $2.9 million in lease revenue.”

Merced County is hoping to use a portion of the former Castle Air Force Base as a hub for manufacturing and distribution in the Central Valley.
CREDIT MERCED COUNTY COMMUNITY AND ECONOMIC DEVELOPMENT DEPARTMENT

  Hendrickson says their goal is to redevelop Castle “to really turn it into a site where we can focus some solid attention on manufacturing. We a want to be a place where things are made because when things are made people are working.”

Back in October, Merced County’s Board of Supervisors developed an agreement with the Port of L.A. formalizing what Hendrickson calls a “hub and spokes” development. Merced will become a place of manufacturing and distribution, and use the nearby rail line and freeways to bring goods to L.A. to be shipped around the world. In kind, Castle may also become a place where the Port can send products for distribution.

Merced County isn’t the only Valley county building ties with the Port of L.A. Kern County recently got approval to expand their Foreign Trade Zone at TejonRanch. They also will move the zone’s affiliation to the U.S. Customs and Border Protection at the Port of L.A. The expansion means all of the industrial areas of Tejon Ranch are now within their foreign trade zone. Companies operating there will receive a break on import duties and fees. Tejon Ranch has announced the expansion will bring jobs to Kern County.

Hendrickson says the same could happen in Merced, when it comes to job creation.

“Using today’s workforce numbers, about one out of every nine jobs would be right here at Castle in about twenty years.”

There is one drawback though. More shipping could mean more air pollution.

Dean Florez is a member of the California Air Resources Board and a former state senator from Kern County.

“The kinds of jobs and economic growth this brings are very large diesel trucks that are running a lot of things that make the air a lot worse,” says Florez. “You know, that balance is really important between jobs, growth, and air mitigation.”

One issue is that companies send their trucks full of goods to a port, and then the truck typically returns to the distribution center, empty. If that truck is coming to Merced’s inland port, that could mean hundreds of miles driven just to return the truck.

“Companies need to figure out how to send items to wherever, but that these cargo trucks not come back empty.”

Florez says the Air Resources Board should come up with ways to incentivize companies to share their trucks, and reduce the total number on the road. He also says this is really an opportunity for outside groups to develop something like an Uber for trucks, where they share cargo going to the port and returning to the Valley.

“I doubt it will be state government that comes up with that,” Florez says. “But I do think it will be some outside force that will come in and say, ‘This is the way, really trucks should be running in California, we have this sharing mechanism and it actually would work very, very well.’”

Florez says he plans to bring this up with CARB later this year.

In Merced County, Hendrickson says they plan to use trains to mitigate truck pollution.

“We see our using our rail connectivity on-site to get trucks off the road, improve air quality, open up shipping opportunities for folks not only through Merced County and really throughout the entire San Joaquin Valley to places all over the world,” says Hendrickson.

Finding the best shipping practices from an inland port will take time. And developing an inland port in the first place has been a long time coming.

Mike Dozier is the former Community and Economic Development Director for the city of Clovis. He says that these sorts of deals don’t just happen overnight.

“What happens is you have this vision, and it might be ten years before that vision starts to materialize,” says Dozier.

Dozier says it takes time for infrastructure to develop, and to convince groups to believe in the project’s potential.

“You know, you just build on it, you just have to have things ready for when the time is right.”

For Merced County, officials hope that time is now.

http://kvpr.org/post/merced-county-hopes-deal-port-la-turns-former-air-force-base-manufacturing-hub

 

381,600 SQFT Industrial Sale In Tracy Could Attract Record Price For New Industrial Project

Ridgeline Property Group, Central Valley, Tracy Pescadero Distribution Center, LaSalle Investment Management, Tracy Pescadero Distribution Center, Prologis, DCT Industrial Trust, DHL Supply Chain entity,
Rendering courtesy of Ridgeline Property Group

By Jon Peterson

Atlanta-based Ridgeline Property Group could attract a record price on a per square foot and cap rate basis for brand new industrial product in the Central Valley for its planned sale of the Class A, 381,600 square foot Tracy Pescadero Distribution Center in Tracy, according to sources that track the sale of industrial assets in the region.

Ridgeline and its capital source, Chicago-based LaSalle Investment Management, had developed the property together, which was completed in 2017. The 19.46-acre site is less than one mile from Interstate 205, an east-west route connecting to Oakland and San Francisco, and it provides easy access to the regional transportation corridors serving the major markets of the Western U.S., according the company’s statement.

“Tracy, California, is the best distribution location in the Central Valley, and the Tracy Pescadero Distribution Center will provide much-needed Class A space for modern distribution operations,” said Greg Thurman, CEO of Ridgeline Property Group in July of 2015, when the company announced that it was commencing construction of the speculative development. “There is virtually no availability of Class A space greater than 200,000 square feet in the Central Valley. In addition to providing bulk space, this 381,600-square-foot facility will offer the option of either a rear-load or front-load configuration, depending on the needs of the tenant. The flexible design also enables the building to be divided into three separate spaces with front offices.”

The sellers are bringing the asset to market for sale on Monday, and they have hired CBRE as the listing agents on the sale. Two people involved are Darla Longo, vice chairman/managing director and Rebecca Perlmutter, senior vice president. CBRE declined to comment when contacted for this story.

Its rare for new industrial product in Tracy to come up for sale so soon after the property was developed. Most property owners in Tracy are major institutional owners. Two such examples would be Prologis and DCT Industrial Trust. These companies and others are more interested in holding on to their assets for a long period of time.

The Pescadero Center is a single building property. The asset is now 100 percent leased to Excel, which is a DHL Supply Chain entity, and Pactra USA. Both of these companies are considered to be high-credit tenants. The average lease term on these two tenants is 5.6 years.

This investment opportunity offers strong cash flow with significant upside to rents given the steady demand and lack of available inventory driving future rent growth. In-place rents are approximately 5 percent below market, offering the new owner future NOI increases upon lease rollover.

Located at 1700 East Pescadero Avenue, the distribution facility features 32-foot clear heights, 57 dock-high doors, two drive-in doors, a 185-foot truck court, 92 trailer parking spaces, 317 auto parking spaces and Early Suppression Fast Response (ESFR) fire sprinklers. The asset also has an office component inside the property, which is 9,470 square feet, or approximately 2.5 percent of the total building.

The overall 95 million square foot industrial market in the Central Valley remains very strong. The region recorded its 19th consecutive quarter of positive absorption with 2.8 million square feet of net absorption year-to-date bringing the vacancy rate down to 2.2 percent at the end of the third quarter.

The Tracy industrial market has also shown strong operating fundamentals. At the end of 2017, Tracy’s average asking lease rate of $0.45 triple-net had increased 15 percent over the past two years.

Ridgeline is known in the industrial sector as a merchant developer. The company does have a regional office located in Northern California in Roseville.

381,600 SQFT Industrial Sale In Tracy Could Attract Record Price For New Industrial Project

Ulta Beauty’s first distribution center in California now calling Fresno home

The walls are up at Ulta Beauty’s new distribution center in Southwest Fresno. But it’s taken months to turn Ag land into a commercial business that will soon house hundreds of employees, sending beauty products around the country.

Fresno Mayor Lee Brand said, “We had the right business elements. The right geographical location in California, the right weather, a big enough urban base to have a substantial labor supply, the cost of the building. All of that works in our favor.”

Brand likes the progress he’s seeing, he said the area in Southwest Fresno, known as the “Reverse Triangle”, features an e-commerce business boom with Amazon and Ulta going up. The nearby 41 and 99 will help drivers goods get shipped far north to Canada and as far south as Mexico.

Both Ulta and Amazon combined are expected to fill about 3,000 positions for their new centers.

Brand said, “The bad news is we have a lot of underemployed people. The good news is, now we have solutions to fill these slots. These people are working with social services and other agency sought to get them trained.”

The city is working to get people trained and ready. Ulta has hired its leadership positions to work in the new 670,000 square foot distribution center at the Northeast corner of East and Central Avenues.

Recently they started hiring mechanics and clerks. Online, people can start applying for material handlers or associate positions.

Brand said, “The orders come in, the computerized labels, they’re sorted, probably electronically and robotically– but there’s always humans there making sure those things get out and are done properly.”

The city offered companies a tax incentive per job, which they say will in turn, over a long period of time, will bring a $40-million to $50-million impact to our area.

Now other companies are looking at expanding.

“I think we are on the forefront here in Fresno on this new type of economy, and we’re hoping to really capitalize on it,” said Brand.

Ulta will be hiring during the next six months. They plan to begin shipping to stores and online guests in July.

http://abc30.com/2959548/?sf179533845=1

Hundreds come for an Amazon job.

BY TIM SHEEHAN

Updated January 16, 2018 03:00 PM

Supply-chain management company offers fulfillment center capabilities

LATHROP—Many smaller companies need the capabilities of a large-scale fulfillment distribution center, but don’t have the space or capital of Amazon or other mega-shippers. Many supply-chain management companies help with business conundrum.

One company with local centers just might have the ecommerce solution for many valley businesses without resources.

Dearborn, Michigan-based Hollingsworth is an end-to-end supply chain management company with 28 distribution facilities located throughout the U.S. and two such locations in Tracy and Lathrop.

In 1991, Hollingsworth began by shipping parts for the Ford Motor Company, a relationship that continues to this day. They are the primary packager for the automotive giant.

By taking on multiple clients, Hollingsworth is able to parse out warehouse space, bringing shipping costs down.

“In the Lathrop area we are very much focused on ecommerce and retail and direct-to-consumer,” said Brian Sheehan, sales and marketing manager for Hollingsworth in this region. “We have local companies and companies that are overseas. It depends on the port of entry for their goods.”

Sheehan said many of their customers are manufacturers, and multiple facilities may be used for one client. Increased facilities also helps Hollingsworth offer same day shipping on behalf of its clients to most areas.

“In a shared warehouse, there’s shared costs,” Sheehan said, allowing for the cost savings to be passed onto the client.

Hollingsworth offers solutions to warehousing, fulfillment, packaging, inventory and program management and more, allowing those who use their services to scale their businesses easily without the hassle of dealing with expansion costs.

With the holiday season estimated to be the peak time for sales, Hollingsworth is preparing for the increased traffic. It’s estimated that the holiday rush accounts for 30 percent of annual sales for many retailers.