Wal-Mart likely to delay Merced distribution center

tmiller@mercedsunstar.comDecember 10, 2013 

— Wal-Mart is expected to announce a delay in construction of a major distribution center in Merced, city officials confirmed Tuesday.

“I’m anxious to see what it has to say,” City Manager John Bramble said of Wal-Mart’s plans. “They made it pretty clear it wasn’t going to (happen) in 2014.”

Wal-Mart, the world’s largest retailer, proposed in 2005 to build a 1.2-million-square-foot distribution center on a 230-acre site at the northwest corner of Gerard Avenue and Tower Road. The center could employ as many as 1,200 people and operate 24 hours a day.

Bramble said he met with officials from the retail giant last week in Merced.

“They own the property,” he said. “They’re very interested in developing the property.”

The officials promised Bramble some kind of announcement, he said, which he hopes to have by the end of the week.

The center would include a 17,000-square-foot truck maintenance building with two underground oil storage tanks and a fueling station with two 20,000-gallon diesel fuel storage tanks. The distribution center is expected to see about 450 truck trips every day.

“Obviously, it’s a disappointment that it’s not going to happen next year,” Mayor Stan Thurston said. “According to what I’ve heard, they’re still committed to do it, it’s just the time has slipped 12 months or so.”

Thurston said the city will have to begin to move forward as though the project will never come to fruition. “I don’t think we can continue to put other things on hold or have staff budgeted for something that we’re not sure is going to occur in the near future,” he said.

The center was mired in a court battle that lasted longer than three years, brought by Merced Alliance for Responsible Growth, which tried to block the project. The California Supreme Court declined to hear the case in March, effectively killing an appeal from the group.

The alliance filed its first legal challenge in 2009, the same year the center was approved by Merced City Council The group claimed the city’s environmental review of the project didn’t adequately address the facility’s impacts on the city.

A Merced Superior Court judge and the 5th District Court of Appeal in Fresno disagreed, leading the group to appeal to the high court. The alliance consisted of several area residents and was represented by Lippe Gaffney Wagner LLP, a law firm based in San Francisco.

Kyle Stockard, a member of Alliance, said he questioned the feasibility of the project and its potential negative impacts on neighboring homeowners. He added that Wal-Mart workers are “underpaid and under-appreciated.”

“They’re going to delay it a year – as far as I’m concerned it’s good news,” Stockard said. “I’m not a big Wal-Mart fan.”

Stockard said his celebration would be short-lived. He believes the retailer will eventually move forward with the project.

Wal-Mart proposed the center to the city in 2005, pledging to create 900 full-time jobs with an average wage of $17.50. The county has struggled with unemployment as a result of the Great Recession and the housing market collapse. As of October, the county had a 12.1 percent unemployment rate.

In a statement, Rachel Wall, Wal-Mart’s senior manager of communications, said the combination of a difficult economy and an improved transportation system – what she called “logistics” – has delayed construction on the project. She declined to estimate how long the delay would last.

“It is not a matter of ‘if’ but rather when we will build a distribution center in Merced,” Wall said. “We are committed to this community, this project and the hundreds of logistics jobs it will bring.”

Sun-Star staff writer Thaddeus Miller can be reached at (209) 385-2453 or tmiller@mercedsunstar.com.

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