UPS & Amazon offer huge boost to Visalia Industrial Park

-September 9,2020-

After 2 years of construction activity United Parcel Service (UPS) plans to open their new 450,000sf distribution hub on Plaza at Riggin in the Visalia Industrial Park early next month. UPS spokesperson Kim Krebs says when it opens the “new Visalia package sortation and distribution center will create more than 625 new full-and part-time well-paying jobs.”

Contractors are packing up now after erecting the 88 acre complex that includes several outbuildings, a truck maintenance facility, fuel center, customer service center and entrance station besides the main tilt-up concrete building with its advanced package sorting conveyor system. UPS bought the land in summer of 2017 from CapRock Partners adding 30 acres last fall from the same party. But wait,as they say ..there’s more.

Right next door to UPS there is some surprise news from another mega-shipper. Amazon is the unnamed mystery logistics center that is now under construction with a 1.3 million square ft distribution center of their own – one of their “fulfillment centers” that typically employ 1000 or more. Amazon has not announced the Visalia project but the contractor on the job Gray Construction based in Kentucky is an Amazon contractor and at the job site today.The company secured the city building permit.

Blake Steel with Gray Construction says this will be the third Amazon center he has worked on and says they will be complete in 11 months. Some 300 construction workers will be needed during the busiest months of the Visalia project.

A typical scenario played out in Fresno with the distribution center built and open in less than a year. In Fresno’s case “During peak times, the fulfillment center ships over 1 million packages per day and has created over 3,500 jobs within the immediate area” says a report. If Fresno has one, Bakersfield too now has seen completion of a 4-story Amazon complex near their airport, expected to open September 6,according to the Bakersfield Californian.

The new general manager told the press there “This is one of the most advanced buildings that Amazon has,” he said, adding that the building — four stories, each about the size of 11 football fields — is the company’s 26th “fulfillment center” in California.” Make that the 27th – counting Visalia. Like UPS, Amazon is not just hiring robots to do the work. Amazon has more than 110 active fulfillment centers in the US and more than 185 centers globally. Now we are on the map

Property owner Newport-based CapRock Partners has been working on this 1.3 million “spec building” for over a year and just received City of Visalia approval to begin construction with grading of the empty site starting last week. Electric power to the site for construction is being added this week to the new address- 3315 N Kelsey.The building has a million sf at ground level and a 300,000sf mezzanine.

CapRocks’ President Patrick Daniels said he could not comment who the tenant was for the big building, what will be by far Visalia’s largest – almost 10 Costcos for comparison. Daniels has been working on their 640 acre industrial park – they call it the Visalia Logistics Center – since 2006 when he first visited Visalia drawn by developer Richard Allen and his successful effort to bring in VF Corp to Visalia in 2005. VF, a major local employer, is another big UPS customer who came to town because UPS ships by ground from Visalia to most of California in less time than almost all other competitive locations. Scores of other firms have suggested that is why, they too, chose Visalia.

With the coming of these two new shippers, the City of Visalia already is planning to widen Riggin from Plaza to Shirk in coming months as well as punching Kelsey north that will allow Amazon street access.The Riggin and Kelsey intersection will now be signaled. Riggin is already busy with truck traffic with the new connection to Highway 99 ( Betty Drive Interchange) that fully opened in the past year.

As for jobs at Amazon the Bakersfield location is a close model, offering warehousing jobs paying $15 to start, the company says, and full-time employees immediately qualify for comprehensive health benefits as well as a 401(k) program with a 50 percent company match. Amazon also offers to pay 95 percent of tuition for college courses in in-demand fields, regardless of whether that education relates to their current job with Amazon.

Amazon.com also said last week it received federal approval to establish a fleet of drones and will begin limited tests of package deliveries to customers in the U.S., although a number of key steps remain before widespread use of the technology will be allowed. Besides drones, both UPS and Amazon promises a green fleet of delivery vehicles based in the Visalia Industrial Park.

What will be the impact on government of a new Amazon logistic center here? A summary of Amazon’s 2019 U.S. taxes they reported includes:

•Over $1 billion in federal income tax expense.
•More than $2.4 billion in other federal taxes, including payroll taxes and customs duties.
•More than $1.6 billion in state and local taxes, including payroll taxes, property taxes, state income taxes, and gross receipts taxes.
•Last year alone, Amazon collected and remitted nearly $9 billion in sales and use taxes to states and localities throughout the U.S. The recent enactment of “marketplace laws” by 40 states allows Amazon to legally collect state and local sales and use taxes on behalf of third-party sellers who sell their goods on their platform.

If Amazon is the golden boy company, UPS and their stock has been on a tear recently as well, propelled by a surge in e-commerce activity this year as a result of COVID. UPS stock has doubled since May.

UPS is developing more so-called super-hubs across the US handling more shipments using highly automated technology.The trend is continuing as demand for same-day service accelerates fueled by more internet shopping and door-to-door delivery. The company is gearing up for the holiday shipping season 2020 in Visalia a year earlier than Amazon will do here – for the holiday season of 2021. With all those internet orders a recent analysis expects that e-commerce will require more than 3x the logistics space of brick-and-mortar sales, according to 2019 data.

Global e-commerce sales are projected to more than double to $6.5 trillion by 2023, according to Statista. The Boston Consulting Group estimates U.S. e-commerce sales will double too, to $1 trillion, growing at six times the rate of all retail transactions.

Those projections came before the coronavirus pandemic, which has prompted an explosion in online shopping by people avoiding brick-and-mortar stores because of stay-home orders or fear of being infected by the virus. Best Buy recently reported that e-commerce sales grew 242% from the year-ago quarter and now represent 53% of total sales. VF Corp recently posted e-commerce earnings enjoying a surge as well.

The side-by-side locations of UPS and Amazon in Visalia may encourage a mutual feeding frenzy in our future. Amazon is UPS’ largest customer, accounting for almost 12% of UPS’ $74 billion in revenue last year. Besides taxes, payroll and the job impacts of the double powerhouses of UPS and Amazon, the developments will clearly draw more companies to Visalia say officials. Already 5 more spec buildings are nearing completion within a country block of the two centers.

CapRock itself has 300 more acres just to the north of the Amazon/UPS sites and Fresno developer John Brelsford ,who already has a dozen tenant-filled big buildings in the industrial park, has 150 acres at the NWC of Plaza and Riggin. CapRock too has plans to build another 500,000sf spec building just north of Amazon.

The coming of all this new industry along the city’s northern edge is going to further juice homebuilding in this area and spur other development along Riggin that now ties to Hwy 99 – a continuous 4-lane artery.To the west of Plaza, Brelsford plans several million square feet of new industrial space and sources say Tevelde has long range plans to annex land not yet in the city north of Riggin,plenty more land almost to Hwy 99.

http://sierra2thesea.net/central-valley/double-double-combo-in-visalia

Overton Moore Properties Buys 118,056 SF Industrial Building in Lathrop, California

LATHROP, CALIF. — Overton Moore Properties, in a joint venture with Invesco Real Estate, has acquired a single-tenant industrial facility located at 18231 Murphy Parkway in Lathrop. Terms of the transaction were not released.

Situated on 11 acres, the 118,056-square-foot property is fully leased to Simwon America Corp., a Tier 1 supplier of Tesla. The buyer plans to expand the current building by approximately 80,000 square feet for Simwon’s growing manufacturing demands. Mike Goldstein and Ryan McShane of Colliers International, Stockton/Central Valley office, represented the buyer and undisclosed seller in the deal.

https://rebusinessonline.com/overton-moore-properties-buys-118056-sf-industrial-building-in-lathrop-california/?oly_enc_id=0462I5076934B9U

Blue Diamond Completes Turlock Expansion

Less than 15 months after breaking ground on the project, Blue Diamond Growers recently announced the expansion of its Turlock manufacturing plant is complete. The 52,000 square foot addition to the existing 200,000 square foot facility in town is one of two major expansions for Blue Diamond, a nonprofit grower-owned cooperative and the world’s leading processor and marketer of almonds. The other, in Salida, will be completed in May. The new Turlock expansion increases Blue Diamond’s value-added almond processing capabilities with an automated factory that features state-of-the-art handling, processing and packaging equipment and also provides space for a future manufacturing line to support both current business or new innovations.

The completion of the expansion comes as Blue Diamond celebrates its 110th anniversary and just seven years after its Turlock facility opened. Since 2013, Turlock’s Blue Diamond facility has received a number of accolades, including Food Engineering Magazine’s title of the 2014 Plant of the Year, as well as being named to Boston Consulting Group’s list of the fastest-growing midsize companies in the nation. The company is no stranger to building facilities quickly — Blue Diamond was able to move from groundbreaking to startup for the original plant in just 13 months. At the expansion’s groundbreaking ceremony in January 2019, Blue Diamond President and CEO Mark Jansen said they hoped to get the additional space built quickly due to the company’s rapid growth. Just over a year later, that goal was accomplished.

The new facility will be used specifically to create an integrated almond beverage base line, where, for the first time, everything needed for the product will be manufactured in the same facility. The base for Blue Diamond’s beverage line, Almond Breeze, will be created at the Turlock expansion through a process of blanching, splitting, roasting and grinding the almonds into a buttery paste, which will then be shipped all over the world to be mixed with water and sold as almond milk. Blue Diamond’s Almond Breeze production has experienced double digit growth over the last 20 years. In 2018, the brand grew by 14 percent. The original Turlock Blue Diamond facility is already processing about 25 percent more almonds than the company originally thought possible for the plant’s capacity after the company recently added an almond flour line to the mix.

The expansion comes as phase two in a three-phase, 15-year project that began when Blue Diamond purchased 88 acres at the intersection of North Washington and Fulkerth Road in late 2011. Since then, companies like Hilmar Cheese and Valley Milk have made their way into the Turlock Regional Industrial Park, while already-established facilities like United States Cold Storage and Sunnyside Farms are also currently in expansion mode. The second expansion in Salida is the new Bulk 8 Warehouse at the Salida facility that originally opened as an almond receiving station in 1969. Today the 675,000 square foot facility sits on 44 acres and includes a retail nut and gift shop. The new 58,000 square foot bulk storage facility is on schedule to be completed by the end of May, providing an additional 50 million pounds of in-house bulk almond storage capacity in time to receive the 2020 almond harvest. The 65-foot-tall building includes advanced design with an automated gravity fed spiral conveyance system that improves grower delivery efficiency and reduces damage to the almonds. “It is particularly meaningful for Blue Diamond to be able to commemorate our Founders Day today by not only recognizing our humble beginnings 110 years ago, but also celebrating two key growth milestones that help secure our future,” Jansen said. “I couldn’t be more proud that, despite the unprecedented challenges businesses around the world have faced over the past two months, our incredible team has been able to sustain operations as an essential food supplier, while completing these critical expansion projects ahead of schedule to meet customer needs.”

To celebrate the expansions and give back during the coronavirus pandemic, Blue Diamond, along with partners Union Pacific and Sun-Maid Growers of California, committed to a donation match of $50,000 to help support three food banks in northern and central California that are struggling to meet significant demand from local families in need.

https://www.turlockjournal.com/news/local/blue-diamond-completes-turlock-expansion/

Supply Chain Breaks Put New Spotlight on Central Valley’s Potential

Supply chains being spread thin or broken entirely by the coronavirus pandemic have brought new scrutiny to inland California’s industrial market. Along with other inland hub markets like the Inland Empire and the Pennsylvania I-78/81 corridor, the Central Valley may benefit from a surge in business inventories and re-shoring spurred by companies’ reactions to the coronavirus, CBRE concluded in a recent report. Courtesy of CBRE Eastgate Business Park in Tracy, Calif. As more manufacturers, wholesalers and retailers opt to store materials and inventories closer to consumers, space for all those goods is in high demand.

Suppliers will likely gravitate toward inland markets as opposed to space-limited and expensive seaport-adjacent markets, according to CBRE, which also points to e-commerce’s continued growth as another likely boon for the sector. “It’s really securitization of the supply chain and avoiding supply chain disruption,” said CBRE Executive Vice President Thomas Davis, who leads the company’s Central Valley Industrial Practice group.  “It has performed very well, and we expect it to perform very well going forward,” Davis said of the Central Valley’s industrial CRE market. In its report, CBRE said the pandemic has highlighted how quickly issues can arise with just-in-time production networks, reversing a decades-long downward trend in inventory-to-sales ratios. Such a reversal could cause industrial demand to surge in inland hub markets, CBRE Research said, projecting a 5% increase in business inventories that require 400M to 500M more SF of warehouse space.

Last month, Colliers International Senior Vice President Gregory Healy, an expert in location strategy and supply chains, said he expects a push for supply chain resilience to result in demands for 750M SF to 1B SF of industrial space in the U.S. alone. Central Valley industrial CRE is likely moving forward from an already strong starting point. As in Southern California’s industrial markets, the region has continued to see deal flow despite the pandemic, Lee & Associates Senior Vice President and Central Valley industrial broker Jim Martin said.  Leasing and investment sales have stayed on track, according to Martin, who said he thinks there will probably be an increase in warehouse and distribution in the region as companies look to increase inventories. “The Central Valley will continue to see migration/expansion from the Bay Area given the availability of land, labor and transportation,” Martin said in an email. Martin, who just worked with Nearon Enterprises on acquiring the 155K SF Eastgate Business Park in Tracy, California, said deals like that one represent a telling commitment to the Central Valley. That industrial purchase was Nearon’s first in the Central Valley, according to Martin, though Nearon didn’t immediately respond to a request for confirmation.

https://www.bisnow.com/san-jose/news/industrial/californias-sprawling-central-valley-poised-for-industrial-boom-from-new-supply-chain-needs-104763

Fresno State engineering students help make protective gear for health workers

Engineering students, faculty and alumni from Fresno State’s Lyles College of Engineering have been working up to 10 hours a day in recent weeks to design and produce personal protective equipment (PPE) for Central Valley health care workers. They plan to donate about 1,000 face shields to Community Regional Medical Center in downtown Fresno. Last week during Fresno State’s spring break, the team completed the final design and began production of the face shields — the first part of a three-phase, innovative project to support the community at a time when protective equipment is scarce for doctors, nurses and other health care providers.

https://files.constantcontact.com/2cb20f61601/682ecac7-bbb8-4d8e-80e1-8808a64214e8.pdf

VALLEY VENTURES COMPANY RAISES $6M IN NEW FUNDING

Madera County named one of the fastest growing communities in the West

A recent study by the U.S. Department of Commerce Bureau of Economic analysis showed Madera County saw the fastest growth in the West in a medium-sized community with a 6.6% increase for its gross domestic product, which is the value of goods and services produced within the county. The study highlighted growth areas in agriculture and forestry, especially in the mountains where trees have died.

A Brave New World: Latest in agriculture at Expo in Tulare

Traditionally the Farmer’s Almanac predicts rainy weather during early to middle February said Lt. Boatman from the Tulare Police Department, who was helping on the first day of the 2020 World Ag Expo on Tuesday, at the International Agri-Center in Tulare. But it was a clear, bright, and beautifully sunny day, and at least 30,000 people or more were expected to attend the show. And over the three days, Tuesday, today and Thursday, Feb. 13, there could be anywhere from 90,000 to more than  100,000 people attending from all over the world. When the gates opened and hundreds of people were lined up to enter, at about 9:30 the Star Spangled Banner was sung, and people respectfully sang with their hands over their hearts.

https://www.recorderonline.com/news/a-brave-new-world-latest-in-agriculture-at-expo/article_4c7de574-4dc0-11ea-b9ba-a3d1742c88a5.html

THE 53RD WORLD AG EXPO® COMES TO A CLOSE

Sunny skies, large crowds and optimistic attendees defined the 53rd edition of World Ag Expo®. The world’s largest annual outdoor agricultural exposition came to a close on Thursday, February 13 and boasted 1,442 exhibitors on 2.6 million square feet of exhibit space. The three-day show hosted 106,357 attendees representing 46 states, the District of Columbia and 56 countries. Exhibitors reported high traffic, quality leads and a well-organized event. First year exhibitor Agland Management Consulting, Inc. was in the Hemp Education & Marketing Pavilion and their team was pleased with their first trip to World Ag Expo®.

https://www.worldagexpo.com/the-53rd-world-ag-expo-comes-to-a-close