Wal-Mart scuttles plans for Merced distribution center
March 15, 2017
• Nearly 15 years of planning, talking, finally end
• “This project could have been a big economic shot-in-the-arm for our residents”
Wal-Mart Stores Inc. will not be building a distribution center in Merced after all, the city says Wednesday.
The news comes almost exactly four years after the state Supreme Court ruled in favor of the company in a lawsuit alleging that the project did not have a valid environmental impact report. It marks the end of a nearly 15-year time line that saw the company first approach the city in the summer of 2002.
“We are extremely disappointed by the news,” says Merced City Manager Steve Carrigan. “This project could have been a big economic shot-in-the-arm for our residents. Certainly, the Great Recession and the drawn-out lawsuit didn’t help the project.”
Mr. Carrigan says the city has other big projects in the works. He points to the University of California, Merced, is spending $1.3 billion on its “2020 Project” that is expected to mean hundreds of jobs.
“We have major Downtown projects going on. We have housing developments popping up in our city like daffodils. We really would have liked the Wal-Mart project, we are going to move on and look for other opportunities,” he says.
Wal-Mart had proposed building a 1.2 million square-foot regional distribution center on Childs Avenue in the University Industrial Park. The project – initially valued at $66 million – would have started with 600 employees, rising to 1,200 workers in the state-of-the-art facility.
Merced City Council approved the project in 2009, but it was immediately tied up in the courts for four years until the state Supreme Court ruled all the environmental documents were correct.
The site sat idle until this February when the company began drilling test bores on the land. In March company officials said their plans had changed.
“More and more retailers are moving towards e-commerce and online fulfillment centers,” says Economic Development Director Frank Quintero. “Look at Macy’s and Nordstrom’s’ web sales and even Target is following the online model. Wal-Mart has a huge online presence that changes the need and nature of their warehousing operations.”
Since Wal-Mart originally announced plans to open the warehouse/distribution center, the industrial and retail sectors in Merced have been busy. Mr. Quintero says some of the highlights include the expansion of Scholle and Label Tech, and the addition of White Oak Frozen Foods, Rotoplas, California Fiber Drum, Olam, Kohls, Sephora, Merced Venture Lab and Harbor Freight.
“Look at the building going on and you can see we haven’t stood around waiting for Wal-Mart,” says Mr. Carrigan.