Written by The Business Journal Staff
The City of Fresno announced today that Ulta Beauty has officially chosen Fresno for its western U.S. distribution center, creating an initial full-time workforce of 542, and potentially up to 1,000 new jobs.
The 670,000 square-foot distribution center to be built at the northeast corner of East and Central avenues will be Ulta Beauty’s sixth distribution center and its first facility in California.
An economic analysis from the city estimates that after paying Ulta a package of incentives worth up to $18 million, Fresno stands to realize $42 million in additional sales and property taxes over the next 25 years.
Carolyn Sutphen, an Ulta spokesperson, said plans call for a summer 2018 start to operations.
“This is exactly the shot in the arm that Fresno needs to energize our economy and keep our momentum headed in a positive direction,” said Fresno Mayor Lee Brand in a statement. “It’s also a direct result of the Economic Expansion Act that I wrote to make our city more attractive to business. We’re pleased that Ulta Beauty recognizes the value of our location, and we look forward to their continued success in Fresno.”
The incentives will be based on the number of workers hired at the distribution center, and the funding will originate from rebates of sales, use and property taxes over the next 30 years.
The company anticipates retail sales of up to $66 million in the first year at the Fresno site, with more e-commerce sales growth in the coming years, according to a City of Fresno staff report.
Ulta plans to spend upwards of $110 million to build the facility.
Mark Standriff, director of communication for the City of Fresno, said construction of the building’s shell could begin imminently, and could possibly be completed by the end of the year. Ulta Beauty, which will rent the space, could possibly begin on the interior of the building by December, he added.
The effort to get Ulta Beauty to build a cosmetics e-commerce fulfillment center in Fresno also received $8-million boost from the state. In November 2016, the Governor’s Office of Business and Economic Development (GO-Biz) voted to award Ulta $8 million as part of the state’s California Competes Tax Credit.
“We are pleased to be expanding in Fresno with a new distribution center that supports our company’s growth strategy and brings additional jobs to the community,” said Mary Dillon, CEO of Ulta Beauty, in a statement. “This will allow us to continue to grow our stores and e-commerce business and help us meet the evolving needs of our guests.”
Ulta Beauty is the largest beauty retailer in the nation with more than 900 stores in 48 states and the District of Columbia. The company’s stock is publicly traded on Nasdaq under the stock symbol ULTA and its net sales in 2015 totaled almost $4 billion.
The City of Fresno is also going after an Amazon distribution center that could create up to 2,000 new jobs, approving in December a $30 million incentive package. Mayor Brand last week took a trip to Amazon’s Seattle headquarters to discuss the project with officials with the online retailer. Standriff said he couldn’t reveal the substance of the talks, but said Fresno is Amazon’s preferred site for the distribution center.
Standriff added there is no word on when Amazon might make that decision.