Business climate shifts in 2012
Dec 20, 2012 | 2642 views | 0 0 comments | 9 9 recommendations | email to a friend | print
Wallace Concrete Construction workers assist with the Walmart construction project at Ward and Sperry avenues on Tuesday afternoon, Dec. 18. The store, slated to open Jan. 23, is one of many economic development projects that was underway in 2012.--Photo by Jonathan Partridge/Patterson Irrigator
Wallace Concrete Construction workers assist with the Walmart construction project at Ward and Sperry avenues on Tuesday afternoon, Dec. 18. The store, slated to open Jan. 23, is one of many economic development projects that was underway in 2012.--Photo by Jonathan Partridge/Patterson Irrigator
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Construction equipment sits in front of the future Walmart store at Ward and Sperry avenues on Tuesday afternoon, Dec. 18. The store, slated to open Jan. 23, is one of many economic development projects that was underway in 2012.--Photo by Jonathan Partridge/Patterson Irrigator
Construction equipment sits in front of the future Walmart store at Ward and Sperry avenues on Tuesday afternoon, Dec. 18. The store, slated to open Jan. 23, is one of many economic development projects that was underway in 2012.--Photo by Jonathan Partridge/Patterson Irrigator
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Construction continues on a 1-million-square-foot fulfillment center for Amazon.com on Park Center Drive on Tuesday afternoon, Dec. 18. The warehousing operation, slated to open this summer, is one of many economic development projects that was underway in 2012.--Photo by Jonathan Partridge/Patterson Irrigator
Construction continues on a 1-million-square-foot fulfillment center for Amazon.com on Park Center Drive on Tuesday afternoon, Dec. 18. The warehousing operation, slated to open this summer, is one of many economic development projects that was underway in 2012.--Photo by Jonathan Partridge/Patterson Irrigator
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If Patterson’s business climate had a theme song in 2012, it might well be Bob Dylan’s “The Times They Are a-Changin’.”

The year saw the closure of the 66-year-old Patterson Vegetable

Co. processing plant, resulting in nearly 300 full-time workers losing

their jobs, but also the announcement that a planned fulfillment center for Amazon.com would create work for hundreds of people in the Patterson area.

Construction is nearing completion on a new Walmart superstore that is expected to employ more than 300, and the city approved plans for a new business park that could provide jobs for 10,000 people.

Patterson’s average monthly unemployment rate from January to October hovered at 21.2 percent this year, down from 22.7 percent for all of 2011 and 23.3 percent for 2010.

Despite national and regional economic challenges in recent years, City Manager Rod Butler and other city officials say good things may be on the horizon next year.

The 2013 San Joaquin Valley Business Forecast Report produced last month by Gökçe Soydemir, a Foster Farms-endowed professor of business economics at California State University, Stanislaus, appears to echo those sentiments. The study predicts slow, steady economic growth in the San Joaquin Valley next year, but it anticipates that employment will not return to pre-recession levels until 2014 at the earliest.

“I’m cautiously optimistic as we look ahead to 2013 for Patterson and the West Side,” Butler said.

Warehouses provide work

The year kicked off with speculation about a proposed distribution facility called Project X,

rumored by many to involve online retailer Amazon.com.

City officials first spoke about the project in January, initially hoping it could bring as many as 1,500 full-time jobs to Patterson.

Seattle-based Amazon.com Inc. substantiated some of the rumors May 3, when it announced plans to build a 1 million square-foot fulfillment center in the Westridge Business Park off of Sperry Avenue and Park Center Drive.

However, Amazon officials announced only that it would employ hundreds of people, and a release issued Oct. 18 by Gov. Jerry Brown’s Office of Business and Economic Development indicated the Patterson site would have 350 employees.

Tracy Mayor Brent Ives, meanwhile, announced in November that Amazon.com was planning to build another distribution center of nearly equal size to Patterson’s in the city of Tracy that would have more mechanized operations. Company officials have yet to confirm those plans, though construction has begun on a site in northeastern Tracy where the distribution center is slated to be built.

Butler stressed this week that the job estimates the city of Patterson presented early in the year were based upon similar Amazon.com warehouses and did not come from the company itself.

Yet even if the new facility offers only a few hundred jobs, city officials say it is a huge benefit that has drawn positive attention to Patterson.

Mayor Luis Molina recalled that Lt. Gov. Gavin Newsom mentioned Amazon.com’s Patterson project several times during an economic development forum Newsom hosted earlier this year.

“For us to be looked at as a secondary market is a huge feather in the city of Patterson’s hat,” Molina said.

In other warehousing news, a distribution center for W.W. Grainger grew to about 200 employees this year, hiring six new employees at its West Patterson Business Park warehouse.

Meanwhile, CVS Caremark laid off more than 100 people at its Patterson distribution center in June, though it still has about 500 workers.

Looking ahead to 2013, both city staff and council members in Patterson have privately murmured about another large distribution center for an unnamed company somewhere within the West Patterson Business Park. Project details remain uncertain, however.

Business parks under review

Warehousing businesses and other businesses also may eventually move to the future 948-acre Arambel Business Park, which, along with the 104-acre KDN Retail Center, received approvals from the Patterson City Council this year.

Annexation of the two projects, built mostly on farmland that is now outside city limits, would expand the city’s physical boundaries by about 30 percent.

The projects would be built during a period of at least 20 years and could produce 10,000 jobs, according to project officials.

Council members unanimously approved a development agreement Aug. 21, despite some wrangling over fees. City staff members recommended $139 million in infrastructure fees, while developers proposed to pay about $40 million.

In the end, the council agreed to the developers’ proposal, though the expansion plans must be reviewed by the Stanislaus Local Agency Formation Commission on Feb. 27 before development can begin.

Just a few miles south of Patterson, Stanislaus County supervisors pressed the reset button on a major economic development venture at the Crows Landing Air Facility this year.

Supervisors voted 3-1 on Aug. 28, with Dick Monteith dissenting and Terry Withrow abstaining, to end the county’s exclusive contract with developer Gerry Kamilos, because his West Park project team missed deadlines and failed to pay a deposit.

The county formally reopened the development process to other applicants Oct. 22, and a handful of interested parties showed up to a mandatory meeting Nov. 16. Among them were representatives from Texas-based Matthews Southwest, Florida-based Heritage Capital Group and West Park.

Project proposals are due by Feb. 1, and county supervisors are slated to vote on a new project April 16, after a special committee, mostly consisting of county staff, ranks the proposals.

Agribusiness falters

While warehousing operations remained a boon for Patterson in 2012, agribusiness took a nosedive with the closure of a 66-year-old produce processing plant.

About 290 full-time workers lost their jobs when Patterson Vegetable Co. ceased operations in June.

Many of the facilities at the aging plant, which was run by Patterson Frozen Foods until 2007, were badly in need of upgrades.

Patterson Frozen Foods had been the West Side’s largest employer at its peak, with more than 1,000 employees, and Patterson Vegetable Co.’s workforce swelled to 600 workers at peak times of the year.

Company officials said the only way to pay for necessary upgrades was through millions of dollars in cuts to wages and benefits. However, members of Teamsters Local 948, which represented PVC’s workers, said those concessions were too severe and rejected all of the company’s proposals.

A silver lining to the closure emerged in November, when Traina Dried Fruit, a Patterson-based sun-dried fruit company, and Modesto-based Sierra Pacific Refrigerated Services teamed up to buy the company’s refrigerated packing and warehousing facilities.

Traina Pacific aims to start out with 120 employees in April when it opens at Las Palmas Avenue and First Street. That number includes 100 people who are already working for Traina Foods at 337 Lemon Ave.

Despite the setback with PVC, city officials and economic development experts alike have said they feel agriculture will continue to be one of the strongest features of Patterson's economy in the coming years.

Retail options set to grow

Traffic at Sperry Avenue and Ward and Las Palmas avenues remained steady this year, and it will get busier with the opening of Walmart next month.

The mega-retailer plans to open a 158,000-square-foot supercenter Jan. 23, despite soil-related construction delays after workers began construction in January.

Chinese restaurant chain Panda Express and video game retailer GameStop also plan to set up shop in the shopping center next year. The Newport Beach-based Pacific Development Group is slated to lease a couple of other pads in the retail development.

In other retail news, a new grocery store opened March 10 at 200 N. Second St. in the former Liberty Market building that most recently housed El Sol Markets. The store, Patterson Food Center, which offers grocery items and goods including Latino specialty foods, continued to fill its parking lot through the end of the year.

On the other hand, organic foods store Patterson Produce Market closed this fall after being open at 19 S. Del Puerto Ave. less than a year.

Just a block to the south, Peter Gong sold Sam’s Food City, at 125 S. El Circulo, in September to the Obaid family, which owns Fiesta Latino Market in Firebaugh and Amigo Meat Market in Avenal. Gong had owned the supermarket for 26 years.

Homebuyers look to Patterson

The arrival of projects such as Walmart and Amazon.com have made the city more attractive to homebuyers from other areas, according to Leysa Fileccia, community sales manager for Kiper Homes, which built 20 homes in Patterson this year.

The company has built 23 houses — including three model homes — in the Patterson Gardens development on 47 lots it purchased from Shea Homes.

The company plans to release six new homes on the market within a week, Fileccia said Tuesday, Dec. 18.

“It’s almost to the point where we can’t keep (the homes) in stock,” Fileccia said.

She said she expects houses to be built and sold on the remaining 24 lots by summertime.

Kiper Homes’ success could presage things to come in 2013, according to Butler, the city manager.

He said construction might resume on Bright Homes’ Sutterpointe development on the east side of town near Walnut and Sycamore avenues next year.

In addition, Stockton-based Legacy Homes is considering resurrecting a project started by Ryland Homes at American Eagle Avenue and Calvinson Parkway before the economic slump of the past few years, he said.

“There’s a lot of rumbling on the street for 2013,” Butler said.

Leaders plan for future

City officials and staff members may be optimistic, but they are not taking anything for granted.

The city’s Economic Strategic Commission is working with consultant Jim Reese, who served as Patterson’s former interim city manager, on an economic development strategy for Patterson that would outline what types of companies the city might want to attract. The document should be given to the City Council for review early in 2013, Butler said.

In addition, Molina, the mayor, plans to host a forum to gather input about ways to boost Patterson’s downtown.

Butler said the city lost an important source of potential funding for downtown revitalization when the state abolished redevelopment agencies early in 2012, but there may be other sources, such as issuing bonds.

“(Downtown) is definitely on our radar,” he said.

Molina also intends to speak with representatives from the Stanislaus Economic Development and Workforce Alliance and with Amazon.com officials in hopes of developing a training program that would prepare West Side residents for jobs at Amazon.

While such a program could provide no job guarantees, it might give people a leg up when applying for job openings, he said.

Like Butler, Molina said he had a bright outlook for 2013, crediting the city’s successes to plans made by past city councils.

“Overall, I think that we’ve been blessed with some great opportunities,” Molina said. “We’ve been fortunate in that the City Council has been working together regardless of their ideologies or even personal differences, and they’ve done a stellar job of promoting economic development.”

• Contact Jonathan Partridge at 892-6187, ext. 26, or jonathan@pattersonirrigator.com.

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