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Will Demand for Union Labor Pact Kill $100 Million, 1,000 Job Fresno Project?
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Published 4 months ago on
December 15, 2023

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Just north of Highway 180, on Marks Avenue, an international developer wants to build a $100 million industrial complex. The four-building project wouldn’t be built near any homes and has quick freeway access for trucks. The company went through a full environmental analysis on impacts the project may have.

“We’re coming in with a $100 million investment asking for nothing in return other than approval. It boils down to … does the city of Fresno want to see $100 million, thousands of jobs, or are they not interested?” — Alex Tavlian, project adviser, Park West Associates

Brokers say when completed, it would provide 1,000 long-term industrial jobs. Building it would employ 1,000 people. What’s even rarer is the project developers aren’t asking for any tax breaks.

But project adviser Alex Tavlian of Park West Associates said two city councilmembers are demanding a project labor agreement. During a presentation to the Fresno Chamber of Commerce this week, Tavlian said councilmembers Miguel Arias and Luis Chavez opposed the project because developers did not agree to a PLA.

Arias and Chavez declined to comment for this story when approached by GV Wire in council chambers on Thursday. Both are running for the same seat on the Fresno County Board of Supervisors against incumbent Sal Quintero.

Tavlian said the union job requirement would double the price per square foot. And, without a tenant secured, building at that price makes the project financially infeasible.

Tavlian said leveraging a PLA to capture a project is a litmus test for future development. The item was pulled for discussion from Thursday’s city council meeting, but the applicants requested to be reheard in January.

“We’re coming in with a $100 million investment asking for nothing in return other than approval,” said Tavlian. “It boils down to, you know, at the end of the day, does the city of Fresno want to see $100 million, thousands of jobs, or are they not interested?”

Scannell Properties wants to build more than 900,000 square feet of industrial space in southwest Fresno near Marks and Nielsen avenues. (City of Fresno)

Project’s Use, Location, and Compliance Rare in Fresno

Indiana-based Scannell Properties has built projects throughout North America and Europe. On the 48-acre parcel in southwest Fresno, Scannell wants to build four buildings ranging from 90,000 square feet to 400,000 square feet. They do not have any tenants.

Uses could range from heavy manufacturing to logistics. Zoning allows for these uses.

Kelly Trevino, director of the city’s Economic Development Department, said at a Fresno Planning Commission meeting that she was excited about the jobs the project would bring, especially considering how little available space the city has for industry.

“We’re excited about this development and the further opportunities it will give us to market the city of Fresno, especially right now at a time when … our available industrial inventory is quite low,” Trevino said. “So, we’re excited about the jobs that this project could bring to the city of Fresno, the increased tax revenue for the city of Fresno.”

The land previously was a cotton processing facility, according to Scannell representative Paul Starn. Other industrial uses buffer the property from rural residential.

Proposed truck routes would avoid homes, Tavlian said.

The company underwent a years-long environmental review called an EIR — environmental impact report. The report found no environmental issues that couldn’t be mitigated, according to Steven Martinez, a planner with the city.

However, a coalition of labor groups and individuals — under the Fresno Residents for Responsible Development banner — opposed the project during the EIR. They called on planning commissioners to not approve the document.

Kevin Carmichael, a representative of Fresno Residents, said the project could create health hazards for construction workers.

No website exists for the Fresno Residents organization.

“A project like this one with significant adverse impacts, in combination with other poorly planned projects can degrade the environment and overtax public services,” Carmichael said at the planning commission meeting.

The four industrial buildings at Marks and Nielsen avenues would vary in size, primed for advanced manufacturing or logistics. (City of Fresno)

Available Industrial Space Near Zero

Will Oliver, president and CEO of the Fresno County Economic Development Corporation, said when they first met with Scannell three years ago, available industrial space was around 6%. Today, it’s closer to 1%.

Industrial real estate broker Nick Audino, senior vice president with Newmark Pearson and chairman of the EDC board, said there is one 50,000-square-foot space he has to show clients.

“We literally have nothing to show them,” Audino said.

Manufacturers look to Fresno first for available labor, but a lack of available space drives them to Tulare and Madera counties.

“The need for this 900,000 square feet of new industrial space almost goes without saying,” Audino said. “Since we’ve been in this situation here we’ve had such low vacancy. We’ve lost thousands of jobs and I am not kidding — thousands of jobs to neighboring counties.”

Tavlian said he is hopeful to get council approval at the January meeting.

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