Nordstrom Close to Decision

On April 14 California Competes Tax Credit Committee approved an $11 million dollar tax credit to Nordstrom if the company decides to locate its new distribution center in either Fresno or Visalia. The vote by the tax credit committee is considered a sealing of the deal for California’s getting the distribution center. Visalia mayor Steve Nelsen said that until then, it was believed that Nevada and Arizona were in the running.

According to the Governor’s Office of Business and Economic Development website, also known as Go-Biz, “the California Competes Tax Credit is an income tax credit available to businesses that want to come to California or stay and grow in California.” Tax credit agreements are negotiated by Go-Biz and approved by California Competes Tax Credit Committee.

Visalia Mayor Steve Nelsen and Fresno Mayor Ashley Swearingen were in attendance at the California Competes Committee meeting in Sacramento to give a presentation before the committee voted on the tax credits. Mayor Nelsen said that one committee member asked the question, “Why we are going through this exercise if Nordstrom hasn’t even decided on which state they will build their new center?”

In Nordstrom’s application, submitted to Go-Biz for the March 7 through March 28 applications cycle, company officials said they plan to spend upwards of $171 million in investment that will eventually create 367 jobs in the first year. That total may be larger depending on how fast the distribution center grows. Nordstrom expects to have its distribution center built and hiring in the 2018 tax year. New full-time hires will receive an annual minimum salary $29,120, according to Nordstrom’s application.

Nordstrom officials noted in their application that the $11 million tax credit would help ensure the project stays in California. Nordstrom would lose the tax incentive if it decided to locate in another state.
Nordstrom received the second largest amount of tax credits. These are awarded to companies who will create new jobs in California, with the company creating the most jobs getting the most credits. The California Competes Tax Credit Committee awarded a total of $55.7 million in tax credits in this application cycle, with 183 companies competing.

“I’m really proud of the fact that myself and Ashley stood up for our region,” Nelsen said. “Go-Biz and the Central Valley share the same goals of trying to create more jobs. We presented to the committee that we not only need it for the Central Valley but that we need it for the state.”

He added that he and Mayor Swearingen were “on the same page.” Both mayors were extremely pleased with the outcome of California Competes final vote.

According to Fresno Channel KSFN, “A lot relied on that vote,” Swearengin said. “In fact, had this vote not moved forward there would be no way we’d still be in the running for a California location for a Nordstrom e-commerce fulfillment center.”

Nordstrom representatives attending the committee meeting did not respond to the question of whether they had decided on Visalia or Fresno. So far as Mayor Nelsen knows Nordstrom is still on-track to make its final decision at the end of April/beginning of May. “They have done all of their due diligence and we have provided all the information they need. Now it’s just up to the board,” Nelsen said.

Visalians first heard of the possibility of Nordstrom building a million square-foot distribution center mid-December of last year–and it has been a battle of the fittest with Fresno ever since. Fresno City Council voted on an incentives package in early December and Visalia matched that package dollar for dollar the following week.

Visalia was offering a parcel in its industrial park for $2 million less than Fresno, and Fresno responded by compensating Nordstrom by $2 million in a different incentive.

The Nordstrom E- Center will service the entire Western United States and could provide up to 1,875 jobs to Visalia and the surrounding area when completely built out during the next decade. Nordstrom does $2.4 billion in Internet sales annually and has 77 stores in California with more than half of them in Southern California. That gives Visalia the advantage because it is one hour closer to Los Angeles than Fresno.

Because distribution centers use UPS, Visalia also holds an advantage when it comes to shipping to the East Coast. Shipments from Visalia can reach Texas in three days while outbound packages from Fresno takes four days.

Visalia also has a one day advantage over Fresno shipping to the South or the East coast.
The property Nordstrom is considering in Visalia is located in the Industrial Park north of Riggin Avenue and east of Plaza Drive. The site in Fresno is a 55-acre lot in the North Pointe Business Park, located along Highway 99 in the south end of town. One disadvantage is that the Fresno site is next to their famous trash mountain, Fresno’s original Sanitary Landfill.

According to KSFN, Fresno County economic development corporation CEO Lee Ann Eager said, “A center like that, distribution e-commerce is going to be huge for us. Not just because of Nordstrom, which we all love, but because it’s also going to affect going forward. There could be a domino effect if we get that one there could be many more.”

Eager says the interest from Nordstrom led four other companies to inquire about setting up a facility in Fresno.

If Nordstrom chooses Visalia a domino effect could happen here also.

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