The Amazon "FAT 1" distribution center in Fresno. Photo by Edward Smith
Written by Edward Smith
A settlement agreement advocates call the first-of-its-kind for the area between residents, the City of Fresno and developers will allow a second Amazon warehouse to be built near where a similar development failed several years ago.
The deal to allow Amazon to build a second distribution center also does not include sales tax incentives — also a first-of -its-kind, according to one member of the Fresno City Council.
The Fresno City Council voted Thursday to approve a development proposal by G4 Enterprises, owned by Dennis Parnagian, to build an additional 420,000 square feet to supplement an existing Amazon warehouse.
The development would add a prospective 1,000 new jobs.
The Fresno City Council approved building on the site at 3611 S. Northpointe Dr. The deal between the City of Fresno, G4 Enterprises, the South Fresno Community Alliance and the Leadership Council for Justice and Accountability creates a community benefit fund of $300,000 paid for by G4 that will finance improvements to nearby homes to help mitigate light, traffic, noise and air quality impacts, according to documents filed with the city.
Ivanka Saunders, policy advocate for the Leadership Council, said this was the first time for the City of Fresno that all parties involved were at the negotiating table.
“The residents know that this is a step in the right direction,” said Saunders. “This is in no way the end to the fight the community has with industrial development, but this is one of the most important acts the city has come up with.”
Approximately 150 homes in south Fresno have been impacted by industrial development in the area. Many were country homes not prepared for impacts created by their new neighbors — an Amazon and Ulta distribution center among them, Sauders said.
Windows shake as trucks pass and lights on the buildings shine bright into homes there, said Fresno City Councilmember Miguel Arias. Construction also creates a lot of dust in the area.
The deal will finance the installation of double-pane windows, insulation and upgrade air conditioning to approximately 100 homes.
An additional $250,000 will come from impact fees waived by the City of Fresno for the project, Arias said.
The city will also install crosswalks, sidewalks and lighting in the neighborhood, particularly at the intersection of East Central Avenue and South Orange Avenue. Arias said schools in the area don’t have safe pedestrian crossing even as trucks go by.
The city will also pursue federal and state funding to connect houses in the neighborhood to city water and sewage lines. Homes there are technically in the county and are still on septic tanks, Arias said.
These will address many of the concerns brought up by the Leadership Council on behalf of the Community Alliance about development in the area.
In 2019, developer Richard Caglia withdrew a request to develop nearly 2 million square feet of warehouse space on property directly adjacent to the future Amazon warehouse.
Residents in the South Fresno Community Alliance brought up many of the same concerns then.
The difference then was that residents were not included in the negotiations, said Saunders. She hopes getting the developer involved with the needs of the community could be a model for the future.
Arias, who was not on the council when the Caglia project was proposed, said if the same process was followed then, the development might have been approved.
“If the city would have taken a similar approach, which is work with the neighbors to address the impacts, we wouldn’t have ended up in litigation and pay out $150,000 in attorney fees,” Arias said. “The previous approach was that advocates were the enemy of job development.”
Arias said under this agreement, the city does not pay for upgrades.
What also makes this deal stand out is it doesn’t grant any sales tax incentives to Amazon.
Sales tax on online orders goes to the government over the warehouse of origin, providing a major boost to cities housing online retailers. In order to court those deals, cities across the nation offer lucrative sales tax breaks to companies to build distribution centers. Under the original agreement with Amazon, the City of Fresno agreed to forego the first $30 million of sales tax that would go to the city. No such deal exists for the expansion, says Arias.
“It just demonstrates that our city is a great place for distribution centers and we’re well positioned to attract more,” Arias said. “We don’t have to give away the house in order to attract an employer that’s going to provide 1,000 jobs.”
What Saunders wants to see is a South Central Fresno Specific Plan so that the guidelines are set in stone and legislators don’t have to “work backwards.”
“Without a specific plan that does not have the completed environmental justice component connected, you’re going to see continual challenges and concerns within the community.”