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June 21, 2017 By Jennifer E-Commerce • Logistics • Manufacturing • New Developments 0 Comments

CT Realty Acquires 345-Acre Industrial Parcel in Stockton, Plans $135MM Build Out

Central California

The Registry
Posted on May 25, 2017

CT Realty (CT) has acquired 345 acres of industrial land within the master-planned NorCal Logistics Center in Stockton, Calif., with plans to develop 4.4 million square feet of high-clearance distribution, e-commerce/logistics and advanced manufacturing buildings. The project, which breaks ground this month, includes an unprecedented amount of speculative construction for Northern California.

Valued at $135 million, the first phase of development includes approximately 1.7 million square feet in three buildings, including a 1,122,341-square-foot building that will be the single largest spec building developed in Northern California. Two additional buildings of 388,183 square feet and 186,944 square feet will complete Phase 1. Beyond the planned development, NorCal Logistics Center has sites available for build-to-suit developments ranging in size from 100,000 square feet to more than 1.9 million square feet.

“We view this as a long-term development opportunity to assemble a world-class logistics campus in one of the strongest markets in America,” said Carter Ewing, managing partner of CT Realty. “The dynamics of California’s Central Valley region, with an industrial base of more than 185 million square feet, mirror the favorable activity we have encountered over the last three years in Southern California and other major distribution markets in Dallas, Atlanta and Chicago.”

NorCal Logistics Center, which is already home to General Mills, Fresh & Easy and Fox Head, is located in the heart of California’s Central Valley industrial market and serves an extension of the global logistics supply chain infrastructure directly linked to West Coast ports in Oakland/Stockton, Los Angeles/Long Beach, Portland, Ore., and Seattle/Tacoma, Wash. The project is proximate to key intermodal facilities operated by Burlington Northern Santa Fe and Union Pacific railroads, and is accessible to SR-99, I-5, I-205 and I-580, linking to all major Northern California markets and strategic Western U.S. destinations.

“The evolution of modern logistics infrastructure, including inland ports, sea ports and commercial rail systems, has changed the dynamics of how containerized cargo is distributed nationwide and throughout the world,” added Ewing. “Investing in buildings that are strategically located near this infrastructure is integral to meeting the demands of today’s most progressive logistics users, and this is at the heart of our national strategy. The locational attributes of NorCal Logistics Center give us confidence that this will become one of the premier master planned logistics parks in the entire Northern California market,” added Ewing.

CT and related development partnerships are developing speculative and build-to-suit Class A logistics buildings for some of the largest industrial users in America. The company has acquired or developed 7 million square feet of industrial buildings in the U.S. over the last 36 months, experiencing strong leasing activity from projects that have been well received in their respective markets.

“NorCal Logistics Center represents the calculated expansion of an industrial logistics strategy we began implementing aggressively across the country five years ago,” said J.C. “Watty” Watson, managing partner of CT.

CT has capitalized much of its acquisition and development activity with Diamond Realty Investments (DRI) the U.S. real estate investment arm of Japan-based Mitsubishi Corporation. Both DRI and CT have 25-year histories in development and investment.

“We are delighted to again combine forces with DRI in this exciting new venture,” added Watson. “Together, we have almost 4 million square feet under construction and another 10 million square feet in our development pipeline on land that we own across America.”

The project is designed by Ware Malcomb, a premier architectural design firm with global experience in logistics and distribution facilities. Construction financing is provided by Cal Bank & Trust and Fifth Third Bank.

CT acquired the NorCal Logistics Center parcel from Arch Road, L.P., a partnership controlled by Minnesota-based Founders Properties and represented in the transaction by Darla Longo, Barbara Emmons Perrier, Rebecca Perlmutter, and Michael Kendall of CBRE National Partners. CT was represented by Cushman & Wakefield’s Kevin Dal Porto, Blake Rasmussen, John McManus and Tyler Vallenari, who will provide ongoing leasing, sales and market support services.

June 21, 2017 By Jennifer Logistics • New Location 0 Comments

Amazon breaks ground on Fresno fulfillment center

Central California

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.

June 21, 2017 By Jennifer Logistics • New Location 0 Comments

MRC Global Inc. opens distribution center in Shafter

Central California

THE BAKERSFIELD CALIFORNIAN

Published June 9, 2017

The U.S. subsidiary of MRC Global Inc. has opened a new regional distribution center in Shafter that will hold about $15 million in inventory to support the company’s operations on the West Coast and Alaska, officials announced Friday.

The new facility at 4000 Fanucchi Way includes about 80,000 square feet of warehouse space, including a 5,000-square-foot valve and engineering center, a 15-acre pipe yard that has a state-of-the-art pipe cutting facility, and a two-story, 11,000-square-foot office building, MRC Global said in the release.

“This new RDC is a demonstration of our commitment to our customers in this region,” MRC Global President & CEO Andrew R. Lane said in the release. “As the energy industry enters into a recovery, we are well positioned to support our customers.”

January 17, 2017 By Jennifer Economy • Food Processing Central Valley 0 Comments

Valley food producers land nearly $850,000 in USDA grants

Central Valley

Valley food producers land nearly $850,000 in USDA grants

Published on 10/28/2016 – 11:09 am

San Joaquin Valley food producers are on the receiving end of nearly $850,000 in grants meant to help small rural businesses develop new products.

The U.S. Department of Agriculture announced a total of $45 million in Value-Added Producer Grants Thursday, going to 325 projects across the U.S.

Local recipients include:
Top o’ the Morn Farms, Tulare
$250,000 to expand farm fresh milk sold in recyclable glass bottles into new geographic markets in Southern California. Funds will be used for increased processing, distribution, promotion and sales support.

Barbara and Tony Martin, Dairy Goddess, Lemoore
$49,000 to provide working capital to expand sales of bottled, non-homogenized/vat pasteurized whole chocolate milk, fromage blanc cheese and curds. Funds will be used for marketing, website development, attendance at the San Francisco Fancy Food Show and signage.

San Joaquin Figs, Fresno
$49,999 to design, package and market organic dried figs and to purchase additional inventory for new markets.

Top Line Milk Co., Winton, Merced County
$245,000 to process whole milk into farm bottled low and slow pasteurized milk.

Blue Diamond, Sacramento
$250,000 to provide working capital to expand marketing and promotional support for the sale of flavored almonds in China and Japan.

“Value-Added Producer Grants are one of USDA’s most sought-after funding sources for veteran and beginning farmers, and rural-based businesses,” said USDA Secretary Tom Vilsack, in a statement. “These grants provide a much-needed source of financing to help producers develop new product lines and increase their income, and keep that income in their communities. Economic development initiatives like this one are working – the unemployment rate in rural America is at an eight-year low and incomes rose 3.4 percent last year. Small business entrepreneurship, which Value-Added Producer Grants support, is a major reason why rural America is a making a comeback.”

State controller: Central Valley could become tech hub for water-saving technology

Central Valley

State controller: Central Valley could become tech hub for water-saving technology

NOVEMBER 3, 2016 4:43 PM
BY BONHIA LEE

California State Controller Betty Yee was in Fresno on Thursday encouraging Central Valley entrepreneurs to build a healthy business community in the Fresno area that would rival other well-known technology and science hubs in the state.

“You don’t need to be Silicon Valley to look for opportunities,” Yee said as the keynote speaker for the Central Valley Venture Forum, an annual conference for businesses and investors that was held at the Clovis Veterans Memorial District.

The event is a collaboration between the Lyles Center for Innovation and Entrepreneurship, the Fresno State Craig School of Business and the Central Valley Fund. It allows entrepreneurs an opportunity to network and learn from angel investors, venture capitalists, business and banking leaders, and elected officials.

Five start-ups also made presentations at the event to a panel of investors in bids for the title of best in show and prospective investments in their businesses.

Yee, whose job is to manage the state’s money and to make sure its bills are paid, shared with attendees a positive report on California’s economic recovery and its future, which is projected to have some job growth, wage increases and increased consumer confidence next year.

But some factors stand in the way of building healthy business communities, she warned, such as the lack of affordable housing in relation to jobs and the lack of access in some communities to the internet, which is considered a tool people need to be successful in the local economy.

The Valley, however, is a desirable place to live because home prices and land prices remain low and the possibility of creating partnerships between businesses, schools and government agencies is high. And the agricultural resources of the region set it apart from the rest of the state, she said.

“I’ve always considered the Central Valley as the heart of the state of California,” Yee said. When you look at “what makes California thrive, there’s so much that comes out of this region, and so much promise that can still come out of this region.”

Yee contends that the Valley could lead the creation of more water-saving technology.

She offered some ways to achieve success. First, is to focus on what Yee calls “our human capital.” That means to “train and attract top talent” for your company. Second is to invest in school science and technology programs and apprenticeships to fill the green jobs of tomorrow.

The Central Valley “has shown to have the guts, the drive and the desire to put in place the structures needed for success.”

Madera almond processor to break ground on $10 million plant

Madera

Madera almond processor to break ground on $10 million plant

NOVEMBER 7, 2016 12:20 PM

A $10 million almond processing plant is being built in Madera to meet the growing demand for nut processing services in the region.

A groundbreaking ceremony will take place at 11 a.m. Thursday at 2725 Falcon Drive in Madera. The plant will be owned and operated by California Custom Processing.

The owners of the company, Grant Willits and Sonya Trevino, have more than 75 years of experience, collectively, in the fruit and nut processing industry. Span Construction and Engineering will be the general contractor of the 83,000-square-foot building on 8.5 acres.

California Custom Processing has 40 employees and that number is expected to double with the opening of the new plant.

Founded in 2012, the processing company is one of the San Joaquin Valley’s leading almond processors and is a certified organic processor. Earlier this year, the company installed a $1 million cool steam pasteurization system that allows the company to naturally pasteurize 10,000 pounds an hour of almonds and other nuts.

Rubber recycling plant coming to Stockton

STOCKTON

Rubber recycling plant coming to Stockton

Nov 11, 2016
By Joe Goldeen

STOCKTON — A national producer of crumb rubber made from recycled tires and used for rubberized asphalt and sports fields is in the process of converting its Stockton warehouse into a full-fledged manufacturing facility that eventually could employ 20 workers or more.

Newport Beach-based CRM Rubber credited a $286,000 sales tax exemption made possible by AB199, authored by Assemblywoman Susan Talamantes Eggman, D-Stockton, and signed by the governor in 2015, in part for its choice to expand its presence at the Port of Stockton.

“Assemblymember Eggman’s bill was extremely helpful in bringing our company to the Stockton area. We had been considering an additional tire recycling plant in Northern California for some time and the promise of a sales tax exemption in AB199 was important in that decision,” said Brian Wong, CRM Rubber’s chief financial officer.

Eggman said creating new jobs in the recycling industry “is the point of the whole bill. This has been and will continue to be one of my legislative focuses.”

She said CRM Rubber had been getting ready to go to Canada before the tax exemption was made possible.

“We feel like this program will be pumping $200 million into the local economy. Everybody who applies (for the exemption) must demonstrate that it will be a net gain for the state of California,” Eggman said. To date this year, more than $16 million in tax exemptions has been granted statewide. By the end of the year, that could rise to between $18 and $20 million.

Wong said CRM Rubber’s current Stockton warehouse at 1404 S. Fresno Ave. — site of the former Hormel Foods processing plant — is currently being used as a transit station with three employees. No manufacturing is going on there yet.

January 17, 2017 By Jennifer New Developments • Top Stories Fresno 0 Comments

Fresno looks to win cosmetics company’s distribution center – and jobs that go with it.

Fresno

Fresno looks to win cosmetics company’s distribution center – and jobs that go with it.

NOVEMBER 15, 2016 3:12 PM
BY TIM SHEEHAN

ULTA Salon, Cosmetics & Fragrance Inc., a major retailer of cosmetics and fragrances, is eying Fresno as the site for a 670,000-square-foot distribution center that could employ as many as 1,300 workers and fulfill internet sales orders throughout the West.

And on Thursday, the Fresno City Council is being asked to approve up to $18 million in economic incentives over the next 30 years to help seal the deal with the Illinois-based company.

A 38-acre patch of vacant land at the northeast corner of East and Central avenues, in southern Fresno’s industrial fringe, is under consideration for the project, said Larry Westerlund, Fresno’s economic development director.

The financial incentives would be in the form of partial rebates of property taxes paid by ULTA Inc. on the improved site, as well as partial rebates of sales taxes on goods sold through the center. But the package is contingent upon ULTA not only developing the site at an estimated $110 million, but also making good on creating new, long-term, full-time jobs for workers at the site.

ULTA Inc. is the division of the company that deals with distribution centers and e-commerce. To qualify for the incentives, ULTA would have to create the equivalent of at least 500 full-time jobs; if the company fails to reach that mark by the end of 2022, ULTA would have to repay whatever rebates it had received to that point.

“The company estimates that their initial workforce would consist of 642 full-time employees with up to 700 part-time employees at peak times of the year,” according to a staff report to the City Council.

ULTA SALON, COSMETICS AND FRAGRANCE INC. IS THE LARGEST BEAUTY RETAILER IN THE NATION WITH MORE THAN 900 STORES IN 48 STATES.

The property is currently just outside the Fresno city limits. But Fresno County’s Local Agency Formation Commission last week approved Fresno’s application to annex the site, clearing the way for the city to offer the economic incentives.

An economic analysis commissioned by the city estimates that even after paying the incentives, Fresno stands to realize $42 million in additional sales and property taxes over the next 25 years.

“The thing that sometimes gets lost in the mix is that currently that property provides very little economic benefit to the county or to the city,” Westerlund said. “It’s an empty field. Everything we’re doing is contingent on having that property built up with a $100 million facility.”

“If we don’t do the project, the amount (of tax revenue) is still almost zero,” he added. “All of this is on a net-gain basis.”

The property is owned by G3 Development Co., which also built the nearby North Pointe Business Park, which was being pitched by the city as the site for Nordstrom to operate a much-sought-after e-commerce fulfillment center. But in June, Nordstrom cited “the pace of change in retail” in delaying its plans for at least four years.

Westerlund said the city has been working with the Parnagian family, owners of G3 Development, on the annexation plans. Earlier this year, the City Council approved “pre-zoning” the site from its agricultural designation under the county’s zoning rules to industrial purposes in anticipation of bringing the property into the city’s jurisdiction.

Consultants for ULTA reached out to the city several months ago to inquire about available sites, but Westerlund said officials didn’t learn who the potential client was until this fall. Of several sites that were examined throughout the western U.S., Fresno has now been deemed ULTA’s preferred site, setting the stage for the company’s request for the incentives.

“We’re first up,” Westerlund said. “If some of the contingencies don’t hit, they could go to a second or third site.” Among those other contingencies are coming to terms on a deal for the property; approval by Pacific Gas & Electric Co. for discounted energy rates for new or expanding businesses; and approval of $8 million in CalCompetes state tax credits by the Governor’s Office of Business and Economic Development. The CalCompetes committee is expected to approve those tax credits at a meeting in Sacramento on Thursday afternoon.

ULTA Salon, Cosmetics and Fragrance Inc. is the largest beauty retailer in the nation with more than 900 stores in 48 states. The company’s stock is publicly traded on Nasdaq under the stock symbol ULTA. Its net sales through the first six months of 2016 were more than $2.1 billion, a 22.8 percent increase from 2015’s first half. ULTA operates distribution centers in Illinois, Arizona, Pennsylvania, Indiana and Texas. Its net profit for the first half of 2016 was $181.9 million, compared to $141.1 million in the first half of 2015.

The company’s second-quarter earnings report also included ULTA’s projected outlook to grow its e-commerce sales by about 40 percent.

“When you look at them, you realize they’re pretty big, and they’re growing like crazy,” Westerlund said. “And one of the big things they’re working on is growing their internet business.”

The company told the city it expected sales through a Fresno e-commerce and distribution center to amount to about $66 million in the first year of operation in 2018, according to a staff report to the City Council.

The ULTA proposal is the first big project to come through the city’s development pipeline since the City Council approved Councilman Lee Brand’s Economic Expansion Act, which includes the tax rebates and other economic incentives for major job-creating projects that are being considered for ULTA.

The $18 million cap on incentives for ULTA shows just how far Fresno has come in the types of inducements it wields for big-time developments that hold the potential for creating hundreds, if not thousa
nds, of jobs.

About 20 years ago, when Fresno was fighting to lure Gap Inc.

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