Amazon breaks ground on Fresno fulfillment center
Published On June 19, 2017
The Business Journal
Written By David Castellon
In case it wasn’t obvious to the dozens of city, county, state and Fresno-area business leaders gathered late this morning on the edge of a dirt field along Fresno’s southern tip, Kelvin Downes told them why they were there.
“Well, it’s official. Amazon’s coming to Fresno,” Downes, head of West Coast operations for Amazon’s fulfillment centers, told the crowd, repeating the announcement the online sales giant announced at the start of the month.
As for the crowd, it was gathered for the groundbreaking of the planned 855,000-square foot building that will house Amazon’s tenth California fulfillment center, where items purchased on Amazon.com are shipped out to customers.
Fresno was selected, in part, because of its location between Southern California and the Bay Area, as well as its proximity to major freeways to Northern California, Oregon and Washington, as well as parts of Nevada.
Because of the company’s focus on two-day shipping under its Amazon Prime program, Downes said most of the goods shipped from the Fresno Fulfillment Center will go to locales on West Coast, but it also will ship goods across the country.
“The support we’ve received from the city, the county and the state on this project has been phenomenal,” said Downes, who specifically thanked, among others, current Mayor Lee Brand — a city councilman for Fresno when the project first was proposed — and former mayor Ashley Swearengin, who was in the audience for the groundbreaking.
“Look around you. This is the future of Fresno, and it all begins with Amazon,” Brand told the crowd gathered under a tent and handed bottles of cold water, providing some relief from the day’s heat as it approached the triple digits.
“This is the game changer,” he said of Amazon locating a fulfillment center here, adding that “It changes the narrative for Fresno.”
The fulfillment center will be built in the 3500 block of Orange Avenue, on the edge an industrial park that includes the new 670,500-square-foot distribution center for Ulta Beauty, which is under construction next door to the planned Amazon site.
Ulta is expected to employ more than 500 people initially and possibly grow that number to about 1,000, while Downes said Amazon expects to employ more than 1,500 people here from the start.
He said that besides offering competitive pay, the employees’ compensation package will include stock options and a program that could pay up to 95 percent of their college tuitions.
Downes noted that the $150 million facility will be among Amazon’s largest fulfillment centers, and it will include a large contingent of robotic devices to pull and pack items, alongside the human “Amazonians” working there.
Brand has announced that he wants to parlay Amazon and Ulta choosing to build distribution centers here as selling points to help promote Fresno as a prime spot for distribution centers.
In fact, he said the city is will try to locate such businesses and other types of large industry to the “triangle” of vacant parcels near the junctions of highways 41 and 99, neighboring the Ulta and Amazon sites.
Both Downs and Brand praised the work of Swearingen for helping get the ball rolling to bring Amazon to Fresno.
For her part, Swearingen said it wasn’t as daunting a task as some might expect, because she and other city leaders had been preparing the parcel — which included connecting water and sewer lines and other infrastructure close by — for a group of other interested developers who ended up pulling out.
So the land was practically “shovel ready” for a large development when Amazon — “We didn’t know it was Amazon at the time. We only knew it was a large developer” — approached city officials with an interest in locating here in late 2015.
“We were really prepared and able to push this locale,” Swearingen said, adding that the city also had prepared tax incentives for the other developers and used them as a template for offering tax incentives to Amazon.
Those incentives will total $30 million over 30 years, part of that in the form of partial reimbursements for the city’s portion of property taxes Amazon will pay, along with 100 percent of the city taxes paid by developers when they purchase construction machinery and building material, said Larry Westerlund, Fresno’s economic development director.
But the deal will be contingent on Amazon employing at least 750 people — half of its planned workforce — here, he and Brand noted.
Brand said those tax incentives should be offset by the economic benefits from the people working at the Amazon Fulfillment Center, as will goods and services purchased locally by Amazon, adding more jobs and economic gains for the area.
During his speech, Downes said that Amazon tries to be a good neighbors wherever the company locates, and in that vein announced the donation of $10,000 to the Fresno County Library system to help fund its DigiBus, essentially a computer center in a bus offering computer classes and computers for the public to use in different locations.
Dermody Propeties, a New Jersey-based capital development firm that is partially funding the new Amazon facility and will lease it to Amazon once construction is complete, provided a matching $10,000 donation to DigiBus.