Could environmental concerns about future industrial sites in Fresno cost the area $1 billion in future wages and give the city of Visalia an even bigger leg up in the competition for new e-commerce sites?
The question is bubbling to the top because of increasing opposition to new distribution centers and manufacturing in south Fresno, long seen as the hub for such economic development.
And, with state Attorney General Rob Bonta backing stakeholders opposed to south-end industrial expansion, another question looms.
“(W)e believe that environmental justice and economic development can both occur at the same time. They are not mutually exclusive.” — California Attorney General Rob Bonta
Where, exactly, should these facilities — a longtime staple of Fresno’s economic development plans — be located? Some people suggest north Fresno. Others prefer west of Highway 99. Arriving at a consensus — and overcoming “Not in My Backyard” objections — is difficult to do.
Moreover, the question isn’t easily answered because planners and developers say that access to highways and the labor force are essential to attracting companies such as Amazon and Ulta.
Meanwhile, environmental justice groups say industrial sites with the required easy access to major Fresno highways disproportionately impact the poor and people of color. And, they add, these sites create unhealthy living conditions for nearby residents.
Bonta sent Fresno County a letter on March 29, warning that its draft general plan may violate fair housing laws and specifically mentioned two communities.
“Malaga and Calwa are among the most pollution-burdened communities in the state. Both communities are already surrounded by industrial uses,” Bonta wrote in the letter to the county’s public works director, Steven White.
Bonta said it is up to Fresno County to decide where to build, as long as it complies with state law.
“We were interested in sharing with them early on, on the front end, our view of their plan so that they can adjust it and change it … They have other parts of the county to consider, and we believe that environmental justice and economic development can both occur at the same time. They are not mutually exclusive,” Bonta said, answering GV Wire’s question during a recent news conference.
Welcoming Bonta’s Role
Environmental justice leaders embraced the attorney general’s involvement in Fresno.
But some officials and at least one Fresno developer also said that Bonta’s intervention is beneficial in identifying the right sites for distribution centers, warehouses, and manufacturing companies.
“Any comments about making our environmental and our general plan legally compliance — that is helpful,” said Bernard Jimenez, an official with the Fresno County Public Works department.
“I actually think the intervention by Rob Bonta will hopefully bring about good change, positive change.” — Developer Richard Caglia
Richard Caglia, whose family business develops properties including industrial sites, labeled Bonta’s letter a positive.
“If you get a representative from the state to the table, (that is) helping to represent a lot of other organizations and groups and nonprofits with their concerns,” Caglia said. “I actually think the intervention by Rob Bonta will hopefully bring about good change, positive change.”
Nayamin Martinez, director of the Central California Environmental Justice Network, said Bonta’s letter was “right on point.”
“These are communities that are overburdened by environmental problems and continuing to permit facilities there are not going to make any difference,” Martinez said. “There are no considerations on how to take into consideration the environmental justice element that all county plans should have.”
But the question remains, where should Fresno County plan for future industrial parks, and the jobs and tax revenue that come with it?
As greater Fresno loses out to communities north and south in attracting e-commerce distribution centers and manufacturing, an answer is needed.
High Demand, Big Obstacles in Fresno
One industry expert says Fresno is the “beachhead” for local industrial parks because of its central location, employee base, airport, and universities. The rise of e-commerce has increased the demand.
“The industrial users will follow the path of least resistance. If you shut them off in one place, they’ll go down the street.” — Industrial Property Broker Nick Audino
“Due to the store closures and the stay-at-home ordinances, shopping online became more popular and increased demand for warehouse space across the nation, not just in Fresno,” said Nick Audino, an industrial park real estate expert and senior vice president with Newmark Pearson Commercial.
Thus, there is strong demand for industrial parks in Fresno and Fresno County. But a lack of developed sites is causing builders to go elsewhere. Objections from environmental groups are not helping, Audino said.
“There’s not a lot of support from the community or the city,” Audino said. “Environmental justice activist groups come out against it on a regular basis. So it makes it tough to get entitlements to build new industrial buildings.”
“It takes support from government, whether it be the county Board of Supervisors … or City Hall and the community at large. If they desperately do not want it, then they’re having success in making sure that it doesn’t happen,” said Audino.
Visalia a Winner
Lee Ann Eager, president and CEO of the Fresno County Economic Development Corp., and Audino point to Visalia as capitalizing on Fresno’s industrial gridlock.
“Right now, (companies) are going to Visalia. They’re going to Tulare, they’re going to Kings County…” — Lee Ann Eager, CEO of Fresno County EDC
“Right now, they’re going to Visalia. They’re going to Tulare, they’re going to Kings County and, certainly, they’re going up north near the Bay Area,” said Eager. “We’re not getting any of those that are looking at where to put those particular businesses because we just don’t have any space for them.”
Said Audino: “(Visalia) landed several million square foot deals that looked around and probably would have considered Fresno otherwise.”
Ace Hardware, Amazon, and Sunrun are recent examples of industrial sites headed to the Tulare County city with a population of 138,000.
“The industrial users will follow the path of least resistance. If you shut them off in one place, they’ll go down the street,” Audino said.
Audino said Visalia has had “more foresight” in planning for industrial parks. And, he said, “There doesn’t seem to be the drastic opposition from activist groups, government agencies at the state level, and others to those types of businesses locating in Visalia.”
Losing business to Visalia frustrates Fresno County Supervisor Steve Brandau.
“It’s ludicrous that just 45 minutes away, they’re able to pull this off with great efficiency and we struggle here in our community. So we’re trying to address that. It’s terrible. We’ve lost jobs, we’re losing jobs in state and out of state,” Brandau said.
“It’s ludicrous that just 45 minutes away, they’re able to pull this off with great efficiency and we struggle here in our community.” — Fresno County Supervisor Steve Brandau
Caglia warns that businesses are already foregoing Fresno County.
“They have been going out of state to Nevada. They have been going out of state to Arizona. They’ve been going to other locations in the south Central Valley. That’s where we’ve seen a lot of these opportunities go,” Caglia said.
Eager says there are a few developers looking at some new Fresno projects, but nothing is in the building stage.
“It’s few and far between,” Eager said. “We really want to bring back manufacturing to Fresno County. It is still growing, but it does take industrial land to be able to bring those manufacturers here.”
She said a recent project went to Tulare County and took 2,000 jobs with it. Neither Eager nor her counterpart with the Tulare County EDC identified the business.
How do south Valley sites overcome environmental concerns that stall projects in Fresno?
“Maybe the city of Fresno and the county of Fresno haven’t been vocal enough about some of the things that they already are doing,” Eager said.
What the Numbers Show
A 2022 economic forecast from Ethan Smith of Newmark Pearson Commercial, estimates that 1.1 million square feet of new industrial space are under construction in the metro Fresno area as of 2021’s fourth quarter.
That lags the 13.5 million square feet being built in the northern Central Valley, 3.3 million in Visalia, and 36 million in the Inland Empire. Out-of-state locations like Las Vegas, Reno, Phoenix, and Dallas also dwarf Fresno.
The study shows that the metro Fresno area has a total of 71 million square feet of industrial space, but a vacancy rate of less than 3%.
Where Should New Industrial Parks Go?
Both Malaga and Calwa are unincorporated communities. Calwa is about four miles east of downtown Fresno. Malaga, with an approximate population of 1,200, is further south along Highway 99, bordered roughly by North, American, Minnewawa avenues, and the railroad tracks along Golden State Boulevard
Jimenez said that ideal locations for industrial parks include access to highways, public utilities (electricity, water), and a workforce.
“There is a lot of land out there, west of (Highway) 99, a lot of the farmland up there that folks are wanting to change.” — Fresno County Supervisor Sal Quintero
Caglia says building near existing distribution centers is an advantage.
“It’s always good to be near the Amazons of the world. They’ve got multiple Amazon infrastructure buildings … it seems to me that that’s the best place to coexist,” Caglia said.
Facilities such as Amazon and Ulta are technically within the city of Fresno but just blocks away from unincorporated Calwa and other industrial-zoned sites.
If not Calwa or Malaga, where should industrial areas go?
“There is a lot of land out there, west of (Highway) 99, a lot of the farmland up there that folks are wanting to change,” Supervisor Sal Quintero said.
Planning for industrial parks in less populated areas also has its trouble points, Jimenez said.
“Our general plan is founded on directing growth to the urban areas. To look at the rural areas would likely create problems from other state directives, such as reducing the number of vehicle miles traveled and lessening the reliance on groundwater. So ideally, you’re putting job-generating uses next to population areas,” Jimenez said.
Balancing those environmental concerns is “our challenge,” Jimenez said.
“We have a number of mandates that don’t always align when you try to implement them,” Jimenez said.
Martinez, with CCEJN, does not want more industrial sites in or near Calwa and Malaga. She says to look to the northern part of the county to build industrial sites.
“In the north part of (Fresno County), you only see beautiful malls, like the intersection of 99 and Herndon. There’s an area where, for example, warehouses could be located.” — Nayamin Martinez, Central California Environmental Justice Network
“It’s not balanced. In the north part of the county, you only see beautiful malls, like the intersection of (Highway) 99 and Herndon, Martinez said. “There’s an area where, for example, warehouses could be located. But the reason why they don’t do it is because there’s going to be significant opposition from their wealthy neighbors.”
The county area around Herndon Avenue and Highway 99 is mostly zoned as rural residential, with pockets of general commercial and light manufacturing. The shopping center Martinez referenced is within the city of Fresno limits.
Eager said the city and county of Fresno continue to scout potential industrial spaces.
“It’s difficult. You want to make sure that you don’t put any of these industrial parks right next door to residential areas. You want to be far enough out to be able to take into effect the air quality issues, the traffic issues,” Eager said.
Bonta’s letter comes as the county continues to develop its general plan — the blueprint on where and how to build everything from homes to industrial projects. Several state laws guide how the plans should be crafted, especially with environmental concerns.
Bonta Challenges County on Calwa, Malaga
The attorney general took issue with one particular aspect, ED-A.7, locating industrial sites.
“The County shall encourage the location of new and expanding industry within Fresno County. The County shall identify circumstances and criteria for locating new industrial locations and uses in the unincorporated areas consistent with the County’s economic development strategies. Initial focus of potential new or redeveloped industrial areas shall include Malaga, Calwa, and the Golden State Industrial Corridor,” the draft general plan says on page 38 of a 320-page document.
Bonta wrote that “this pollution, along with the health and quality of life impacts it will cause, are discriminatory effects.”
Jimenez, with Fresno County Public Works, says areas mentioned in Bonta’s letter, are already zoned for industrial.
The concern, as the county interpreted the letter, is expanding the zoned areas. Jimenez says the county is undertaking a feasibility study of more industrial zoning for 2,900 acres east of Malaga.
“(The county is) trying to get a handle and understand what are the infrastructure and utility needs to undertake such a project. And I guess I must emphasize that the board has not acted on that project,” Jimenez said.
While Bonta had issues with Calwa and Malaga, his letter said there is no “general objection” to the Golden State Industrial Corridor.
Great Jobs? Not for Some
Caglia said the high demand for labor benefits the economy.
“These facilities have the opportunity for many folks to get good-paying jobs with great competitive benefits,” Caglia said.
Ethan Smith’s forecast estimates that Fresno’s average hourly industrial wage is $24.68.
“Over $1 billion in wages can be attributed to industrial businesses in South Fresno,” Smith writes.
Environmental activist Martinez has her doubts.
“We just can’t say, ‘Hey, we’re going to go build an industrial park there.’ It doesn’t work that way.” — Fresno County Supervisor Buddy Mendes
“That’s what they say. We are here smelling and breathing the diesel from all these trucks that come to our neighborhoods, but the jobs are not ours,” Martinez says.
She estimates that only 1% of the warehouse jobs go to local Calwa and Malaga residents.
“The jobs are not even generated for those communities. And yet they are the ones with the air pollution and other potential pollution that are coming to their communities. The job-generating strategy is just the excuse that they used to try to justify (industrial expansion),” Martinez said.
At the very least, Martinez wants to see environmental mitigation strategies such as electric trucks. She also wants more trees planted.
Supervisors Question Bonta’s Letter
Some Fresno County supervisors characterized Bonta’s letter as premature.
Supervisor Buddy Mendes pointed out that there are still “hoops that the county’s going to have to jump through” before approving new industrial zoning.
“We just can’t say, ‘Hey, we’re going to go build an industrial park there.’ It doesn’t work that way. So I don’t know where the hell this letter coming from,” Mendes said.
“For the Attorney General’s Office to kind of jump to conclusions … I found that to be a little premature.” — Fresno County Supervisor Nathan Magsig
Supervisor Nathan Magsig said the county is still doing the environmental work for a proposed Malaga industrial park.
“For the Attorney General’s Office to kind of jump to conclusions about pollutants, essentially that could be emitted from that business park, I found that to be a little premature,” Magsig said.
Magsig also questioned Bonta’s support of groups he advocates for.
“I think it’s a little bit disingenuous to say that you support disadvantaged communities. But then, on the other hand, that you oppose areas that potentially could create jobs for them,” Magsig said.
Eager, with Fresno County EDC, says her group has worked with city and county planners to take into consideration Bonta’s concerns.
One solution, Eager said, is to build commercial areas first to act as a “buffer” between residential and industrial.
“We’re certainly always mindful of (environmental concerns). Yes, we want to bring in new business, not just industrial, all kinds of businesses, but we also want to make sure that we’re doing it responsibly,” Eager said.
Malaga Leaders Welcome Industrial, With Mitigation
Charles Garabedian Jr. and Salvador Cerrillo Jr. serve on the Malaga County Water District board. They call Malaga “The City of Industry” and say they welcome industrial sites but want environmental mitigation measures.
“We’re pro-development, but we’re also understanding that while the plan is general, so to speak, it did lack the specifics in regards to mitigating the pollution, traffic, and odor,” Garabedian said.
“(W)hile the plan is general, so to speak, it did lack the specifics in regards to mitigating the pollution, traffic, and odor.” — Charles Garabedian, Jr., Malaga County Water District
Cerrillo wants to see the roads improved before more industrial parks are considered. He calls it putting “the cart before the horse.”
A specific mitigation member Garabedian wants is for one acre designated as residential for a given number of acres zoned as industrial.
“Malaga Elementary School has a drop in enrollment. If the school gets closed, then it’s just matter of time for the community. The elementary school holds the community together in the surrounding area,” Garabedian said.
Other mitigation ideas include Malaga having more local control in planning, guaranteed local hiring at the industrial parks, and financial help to retrofit homes with better insulation and windows.
Both Garabedian and Cerrillo are floating the idea of incorporating Malaga as a city. Such a move would allow Malaga to collect tax revenue from industrial sites. They cited an old estimate that pegged that number at $3 million a year.
State Senator Anna Caballero, D-Merced, is proposing a bill, SB 1449, that would help fund the annexation of unincorporated areas into an adjoining city — similar, but not quite what Garabedian and Cerrillo are seeking.
AG Cites New Environmental Justice Law
In his letter, Attorney General Rob Bonta cites SB 1000, an environmental justice bill signed into law in 2016. As Bonta explains on the state’s website, the law requires “local governments to identify environmental justice communities (called “disadvantaged communities”) in their jurisdictions and address environmental justice in their general plans.”
The goal is to make planning decisions more transparent and include mitigation measures for pollutants.
“We are not saying you cannot build, but we are saying there are laws in the state of California that support and uplift and promote environmental justice. The proposal that we saw — we want to be very clear — to have industrial development does not comply with that law,” Bonta said at a recent news conference.
Bonta’s office says this is the first time the attorney general has made a comment on a draft general plan. The state recently settled with the city of Huntington Park last December over violations of its 2030 general plan.
Jimenez, with county public works, says they are aware of SB 1000 and the goal is a “fully compliant general plan.”
Working on Next General Plan
The county’s last fully developed general plan came in 2000. The county has been working on the latest revisions since 2018, with completion expected by the fall. The county has held community meetings and hearings during Board of Supervisors meetings.
The next community gathering is scheduled for Tuesday, April 19, in Shaver Lake and Del Rey. A meeting is scheduled for Biola in May.
Martinez criticized previous meetings held in the daytime.
“The voices of the disadvantaged communities have not been heard, because some of these meetings are happening on Tuesday morning and they’re happening in other areas, not in Malaga or Calwa,” Martinez said. “If you have them during the day, during the morning when most people are working, how are you going to expect to have a robust participation?”
A county spokeswoman said the county held a meeting on March 28 in Calwa during the evening. The Del Rey meeting is scheduled for 6 p.m. at the Del Rey Community Services District Hall.
Jimenez, with the county public works department, says that while smaller changes have been made to the general plan since 2000, this is a comprehensive undertaking. He said general plans usually cover a 20-to-25 year period.
“We’re right at the tail end of that,” Jimenez said. “There are some (changes) that are still pending in terms of new legislation that we’ve incorporated into this process.”
Said Magsig: “Our Board of Supervisors is committed to make sure that not only we follow the law, but that also where community input is required, that we go through the proper processes to make sure that all voices can be heard.”