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Wal-Mart announces change in Merced plans

Mike Conway

Post Date:03/15/2017

Walmart ends plans for Merced distribution center

Walmart has announced a change in its business plans and will not be building a warehouse and distribution center in Merced, company officials told the City.

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.

The company said the nature of retail has changed since Walmart announced the project 12 years ago.

'We are extremely disappointed by the news,' said 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.

'Now the City has to move forward. We have other big projects in the works. UC Merced's 2020 Project is a $1.3 billion investment in the community, with 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 Walmart project, we are going to move on and look for other opportunities.'

When it made its announcement in late 2005 Walmart 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.

The 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. Three Merced residents and the Merced Alliance for Responsible Growth filed the environmental challenge Oct. 28, 2009. The challenge was overruled in Superior Court and the Fifth District Court of Appeals. The state Supreme Court ruled in Walmart's favor March 13, 2013.

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,' said Economic Development Director Frank Quintero. 'Look at Macy's and Nordstrom's' web sales and even Target is following the online model. Walmart has a huge online presence that changes the need and nature of their warehousing operations.'

In the meantime, Quintero said there are other parts of Merced's economy that have continued to grow. He said just last year Merced welcomed Dickie's BBQ, Les Schwab Tire, Five Guys Burgers, Pizza Factory, Cozy Fox and Quickly. In 2017 Bob Cat Diner and Thai Cuisine II expanded and in the works are Marriott Town Place Suites, Merced Gateway Retail Center, Rockin' Jump, Steak 'n' Shake, KFC, Arco and the Merced Mall expansion.

Since Walmart originally announced plans to open the warehouse/distribution center, the industrial and retail sectors in Merced have been busy. Quintero said 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.

'The City Economic Development team continues to reach out to developers and site selectors to find new projects for Merced,' said City Manager Carrigan. 'Look at the building going on and you can see we haven't stood around waiting for Walmart.'

A timeline of the Walmart project

  • Summer 2002 ' Walmart representatives approach City officials about sites for potential large facility in Merced.

  • August 19, 2005 ' Walmart announces plans to build a regional distribution center in Merced.

  • Jan. 30, 2006 ' Walmart submits the project application.

  • Feb. 25, 2009 ' City releases draft EIR on Walmart project for public comment.

  • July 30, 2009 ' City releases final EIR on Walmart project with more than 300 written comments.

  • Aug. 19 and 24, 2009 ' Planning Commission public hearings. Commission votes 7-0 recommending Council certify EIR and approve project.

  • Sept. 21, 23, 26, 28, 2009 ' City Council holds public hearings on project. At the final hearing Council approved the project.

  • Oct. 9, 2009 -- Three Merced residents and the Merced Alliance for Responsible Growth filed an environmental challenge.

  • March 14, 2011 -- The Merced County Superior Court ruled in favor of Walmart.

  • Nov. 12, 2012 ' The State Appellate Court rules in favor of Walmart.

  • March 13, 2013 ' The State Supreme Court rules in favor of Walmart.

  • March 15, 2017 ' Walmart announces that it no longer plans to build a distribution center in Merced.

A history of the Walmart project and documents are on the City website, www.CityofMerced.org under Planning at Walmart Environmental Impact Report.

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