May 11, 2014

National retailer eyeing Patterson for warehouse-distribution center

A nationally known retailer is finalizing plans to build a gigantic 1.5 million-square-foot warehouse and distribution center in west Patterson.

A nationally known retailer is finalizing plans to build a gigantic 1.5 million-square-foot warehouse and distribution center in west Patterson.

The company’s name is being kept secret until the deal is signed, but an announcement is expected in two to three weeks.

“All the approvals are done,” said Joe Hollowell, project manager for the Arambel Business Park where the massive structure is planned. He said the 90-acre complex is for a big-name brand everyone will know. “This is going to make a difference in our community and for the entire county, and we’re proud of that.”

The Patterson Planning Commission has approved the proposal’s architectural and site plans, which were presented using the code name Project XX.

If built as currently designed, it would be Stanislaus County’s largest building.

The Amazon fulfillment center that opened last fall in Patterson has 1 million square feet, but Project XX would be 50 percent larger than that. It’s the equivalent of 750 2,000-square-foot houses all under one roof.

Amazon has hired more than 300 employees, but no one involved with this new deal is publicly speculating about how many jobs it might create.

But here’s a clue: It’s being designed with 371 parking stalls.

Hollowell said how many people those parking spaces could accommodate would depend on the number of shifts the distribution center operates. He said “the majority of what’s coming with this project will be new jobs,” rather than jobs transferred from a facility somewhere else.

The sheer size of Project XX is triggering optimistic speculation about who it could be.

“That is a world-class-size building,” assured Ronald Jackson, president of the Beard Land Improvement Co. By comparison, he said, the biggest building in Beard’s southeast Modesto industrial district has 800,000 square feet.

Jackson said that for a structure the size of Project XX to make financial sense, it likely would run around the clock, with employees on staggered shifts.

“I’ve heard Wal-Mart is in the market for a giant new distribution center,” said Jackson, who doesn’t know whether that is what’s being proposed here. “That would be a big win for Patterson and for the county.”

Others suggest home furnishings retailer Ikea is the one behind Project XX.

Whoever it is wants to keep its identity confidential for now, so Patterson officials are accommodating, just as they did a couple of years ago when Amazon sought approval to build there.

Patterson has attracted several giant distribution centers in the past decade; combined, those new employers have created more than 1,000 jobs for the county.

Kohl’s clothing and Longs Drugs (which became CVS Caremark) kicked things off in 2006, followed by Grainger industrial supply and Affinia automotive parts in 2011, then Amazon in 2013.

Those five Patterson companies occupy buildings with more than 3.7 million square feet of warehouse and distribution space, with dozens of docking ports for big-rig trucks.

Having successful distribution centers already operating helps Patterson draw more to town.

“Think of it like the more bees, the more honey,” quipped Hollowell. He said Patterson’s location near California’s primary north-south freeway also is key. “Being on the Interstate 5 corridor is a big, big deal.”

But there’s more behind Patterson’s success in luring big new employers, according to Mark Reckers, a Lee & Associates Commercial Real Estate broker who helped pull together the land deal for Amazon’s fulfillment center in Patterson.

Reckers said Patterson succeeds because it makes large parcels of land available for new industries, and it has “a very favorable building fee structure.”

The city’s main competitor for distribution centers is Tracy, where Reckers said the West Tracy Business Park and Cordes Ranch are located.

“A lot of announcements (about new companies) will be coming out of that Tracy area soon, too,” Reckers assured.

Numerous companies are seeking new large distribution centers these days, Reckers explained, because there has been so much consolidation in the retail sector.

Hollowell said that demand was a big reason the 825-acre Arambel Business Park was formed. It started seeking development approval a couple of years ago, as part of the West Patterson Business Park Expansion Project.

That property, which is a peach orchard owned by Jeffery Arambel, was annexed into Patterson in December.

“We had heard there were companies looking (to build big new distribution centers), but at the time we did not know who they were,” Hollowell told The Modesto Bee on Friday. He said he didn’t find out who was behind Project XX until late March. “Everything’s gone very fast.”

Architectural renderings and site plans showing how the very long 40-foot-high building will look were presented to the planning commission during a special meeting May 2.

The developer’s name on city documents is WR Griffin Patterson LLC, but its contact information is listed as Weeks Robinson, an Atlanta firm that develops big industrial properties.

GDR Engineering of Ceres produced the project’s site plan, and the building architect is listed as Russell, Gallaway Associates of Chico.

Hollowell, who is based inside GDR Engineering’s office, assured “a first-class-looking building” is planned.

“Nothing is closed yet, but the company is serious about our community,” Hollowell said. “It’s going to be a huge investment, just for the real estate.”

Building a distribution center of that size could create lots of construction jobs initially, and then boost Stanislaus’ employment prospects with hundreds of new permanent positions.

“The Northern San Joaquin Valley is the perfect spot” for warehouses and distribution centers, according to Jeffrey Michael, director of the Business Forecasting Center at the University of the Pacific in Stockton.

Michael said such centers have been leaving the East Bay Area “because of traffic congestion and land costs.” But in Stanislaus and San Joaquin counties, he said, transportation and warehousing has become “the fastest-growing job sector.”

“They fit the employment skills profile of the workforce here,” Michael explained. “And those jobs are a good fit for a significant portion of our population.”

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