-May 1,2021-
Fresno factor may play a part
A long tradition of investment
In 2018 the City of Visalia described what was happening in the industrial park as “a city in a city” growing to 16.6 million square feet on 381 acres, block after block of concrete tilt-up buildings of all sizes in the northwest part of town.
Today, three years later, new development including UPS and Amazon are now open or nearly so – adding 1700 jobs and another 1.7 million square feet between the two of them. Now it seems clear that these 2 high-profile industries are just the start of a continuing boom, a virtual explosion of development fueled by the popularity of e-commerce. Visalia’s competitive advantage vs Fresno may play a part, as well.
The latest map of players building huge logistics warehouses in Visalia’s Industrial Park, mostly on the city’s open space northern tier. Spurred on by construction of a new 88-acre regional UPS hub (625 jobs) at Plaza and Riggin and a 1.3 mil sf Amazon fulfillment center adding 1000 jobs, developers are filing new plans this month in what will be a city of warehouses. On the drawing board is an incredible 9.2 milion square feet,some of which will break ground this year.
The players on map besides UPS and Amazon are Fresno’s Diversified Development Group (DDG),CapRock Partners of Newport Beach (CAPR),Larry Ritchie and partners -Visalia landowners,YS Industries-based in Los Angeles and Seefried Industrial Properties of Phoenix.
It took 60 years, 1958-2018, for the Visalia Industrial Park to get to 16.6 million square feet. But it may take just a few years – say 2018 to 2024 to double that square feet with all the million square foot warehouses on tap. Looking at land, the district had 381 acres in 2018 and we have already doubled that acreage today.
Not unlike the expansion of retail on Mooney Blvd from 1980 to 2000 – where we saw a steady move to open land to the south – the Visalia Industrial Park has seen a steady move north to more open land and adding larger parcels.
Consider the latest news just this week.
Plans filed with the city and heard Wednesday April 28, propose a new industrial park, another “city-in-a-city” – adding 280 acres and an amazing 3.7 million square feet at the NW corner of Shirk and Riggin. The project was filed by a local partnership headed by Larry Ritchie.The proposed development would include two, side-by-side 1 million square foot industries and dozens of smaller buildings along its eastern side.
The Ritchie family along with Doe family have had long-standing land holdings on relatively low-value field crop land in this part of Tulare County. Larry is president of Shannon and Ritchie, an old-time farming and development group. Larry is the son of legendary Visalia farmer,cowboy and land owner Clarence Ritchie whose holdings also cover the Westside of the Valley – now full of solar farms. Clarence and Dick Shannon were best of friends and partners. Larry is also a partner with John Vidovich on a number of projects including some land holdings in the industrial park being sold off now, totaling around 100 acres. The land for the new Millipore building at 120,000sf was purchased from this partnership.
But wait, there’s more.
Also this week, Phoenix-based Seefried Industrial Properties filed a plan on another parcel of vacant land right across Plaza Dr from California Dairies and Sequoia Beverage at the southwest corner of Plaza and Ferguson for another 1.27 million square feet on 80 acres. In their filing Seefried says this unnamed industry will employ 400.
The 114-acre, open parcel of land ( see here) has been for sale for years, owned by the DeJong family. It is the largest vacant parcel in the existing industrial park.
Also,LA-based YS Industries, who built two 300,000sf buildings on Riggin and is looking to lease them, already plans to build four more, says agent Freddie Molina.Several other parcels next to the development are in escrow, he says, being purchased from Ritchie-Vidovich. “Amazon and UPS are driving up demand” he says.
Fresno factor
So where is all this demand coming from? Well, look in the mirror, first of all! Package delivery to homes exploded during COVID and is not slowing down now.
If prospective tenants are being pulled-in by the new Visalia 450,000sf UPS hub, they are being pushed-out of Fresno as an alternative location.The two cities have been vying for tenants for years and Fresno has won their share of big catches like Ulta Beauty and Amazon before they picked Visalia . The conventional wisdom was that Fresno is a bigger market with a major airport and sporting a larger labor force. Visalia has taken a back seat in the mind of some industrial site selectors.
Today it is no longer seen as a second choice. Visalia may now be in the “catbird seat” in this Central Valley competition.
Both cities brag that their UPS hubs, in the middle of California- can reach 95% of California with overnight ground shipping.Visalia points to slight edge reaching more Western states in fewer days.The UPS complex in Fresno is boxed-in however, by Downtown development all around.The place is crowded.
Lately, a community movement against large industrial projects in Fresno’s southwest quadrant has reduced availability of new parcels ready for development. This spring, a Fresno community group is opposing new plans to masterplan a 92-acre park in this part of the city. While some California communities welcome logistics jobs, others are pushing back against expected traffic congestion, noise and air pollution from the increased truck traffic
Fresno commercial broker Nick Audino says opposition from groups concerned about environmental justice in Fresno has slowed development plans there and that may be benefiting Visalia. Opponents right now are calling for more mixed use, office and commercial uses in the Southwest part of Fresno. “The challenges to the CEQA process has had a chilling effect”, suggests Audino.
Meanwhile,Audino says the Visalia boom “is a result of the extremely low vacancy factor here” and the impressive pace of development has “no end in sight.”
So we have seen the industrial park move north of the Goshen Ave rail line to the open spaces and closer to the new 4-lane connection to Highway 99 – the $36 million Betty Drive interchange only minutes to the east on Riggin. Then there is the on-going widening of Highway 99 to 6 lanes heading south from Goshen and next through the City of Tulare scheduled over the next few years to the Kern County line.
The UPS boom is not just in Visalia where they recently put out the word – they needed 60 more truck drivers here. The company also released their sales report for the 1st quarter of 2021 and sales were up 27%.
So what does a boom look like? Before Amazon was built, there were no buildings in Visalia over one million square feet. VF Corp is 820,000sf and by the way, the fully leased building is for sale now. When it was approved back in 2005, the size was compared to 11 football fields. But today, at least on paper, there are proposals for 5 new one-million square foot buildings with two of them expected to break ground later his summer.
Construction of ‘spec’ buildings in Visalia has storied history.
Arguably, the new logistics era started here around the year 1986, when Imperial Cup- headed by Richard Allen- came to town. Allen later sold his growing disposable cup business to International Paper – they are still here churning out millions of coffee cups- and founded the Allen Group. The new company built so-called speculative buildings on land assembled into logistic parks, ahead of commitments to lease – a trend that has only accelerated since.He started in Visalia but moved on to Shafter and then to Dallas.
In 2005 Allen was able to snag clothing giant VF Corp to lease a new 820,000sf building in Visalia to be constructed at Riggin and Plaza. At the time, VF promised to hire at least 350.It employs 1000 today. Visalia beat out several rival locations including a Nevada site that was ruled out because of snowy winter roads. No snow here.
Richard Allen’s success, later attracted Newport developer Pat Daniels to take a drive up to Visalia and a few years later, his company bought 320 acres at the NE corner north of Riggin and Plaza. That land did not develop for a decade until 2017 when he sold 50 acres,later another 38 to UPS.
The package delivery company was ripe for expansion sandwiched into a tiny 32,000sf building on Goshen Ave fitting for the 1960s era.Then Daniels snagged Amazon, right next to the new UPS complex and that 1.2mil sf building will be completed this summer adding 1000 more jobs here.
Daniels is not through – submitting plans early this year for twin industrial buildings that add up to 2.5 million square feet.he says it will break ground this summer. We are not sure how many football fields that adds up to.
Looking back,Richard Allen also developed the MidState 99 industrial park north of the Goshen rail line.MidState now has more than 3 million square feet spanning 11 buildings. After Allen declared bankruptcy it was Fresno’s John Brelsford whose company, Diversified Development Group (DDG), who picked up the pieces and continued the spec building tradition here.
Brelsford has more recently built five large warehouses and filled all of them and is soon breaking ground on 2 more – nearly 400,000sf at the SE corner of Plaza and Riggin. He also bought 157 acre from Russ Doe at the NW corner of Plaza and Riggin and had the large parcel annexed into the city.This will be next on his march to the north.
While all this demand has driven up land prices recently competition has kept space still available for lease at a bargain rate of 50 cents per square ft -half of what it costs in Los Angeles.
Open your eyes
All these happenings has Jo Ann Stores distribution center manager Bruce Nicotero both excited and concerned about jobs. Nicotero has been involved in training programs for logistics jobs in Visalia with players like COS.”All you have to do is open your eyes to see all the construction activity that is helping lots of local subs” he suggests.
But he is also watching the competition for the labor supply along with neighbor VF Corp, with both UPS and Amazon and others ramping up demand for workers.”We will be monitoring recruitment for the holidays ,the busiest time of the year, he cautions.