Oxnard Denied Permit for 1500+ Employee Amazon Distribution Center Codenamed Project Gaucho

 

 

By  Gina Harden  (* see 8-13-19 publisher’s note at the end of this story)

similar facility

Citizens Journal obtained documents through the Freedom of Information Act (FOIA) which contained 2018 emails between the City of Oxnard and Seefried Properties related to developing a 2.6 million sq.ft. Amazon Warehouse Storage and Distribution Center on 55 acres at the Sakioka Farm Business Park. The proposed development would have brought more than 1500 jobs and a much needed economic boost to the city. Public Works Director Rosemarie Gaglione said, “I don’t think that anything as unique as what is being proposed has ever been built in Oxnard.”

When she explained that this would be a simple, routine procedure for the Association of Transportation Engineers (ATE), Darryl Nelson (Traffic Consultant & Senior Transportation Planner) corrected her saying, “ATE has never collected traffic counts at three similar facilities for any Project proposed in the City of Oxnard.” Gaglione replied, “Then there is always a first time.”

Jason Quintel of Seefried Properties boasted, “We are installing improvements that will ultimately help traffic in the entire area and will facilitate development within the specific plan area.”

After more than eight months of work on the proposal, November 29, 2018, Deputy Building Official Jeff Pengilley optimistically announced “a path forward towards approval” which included 11 additional conditions the developer must meet. It is unclear where things went wrong from there. City staff were unwilling to respond to our inquiries.
The main conflict was over the building code definition of occupiable space. Even though the proposed 2.6M sq.ft, 75 ft tall warehouse was quite large, only 20% of the space would have been occupied by employees. June 6, 2018, Dan Bick of Seefried Industrial Properties, wrote to Kathleen Mallory, Planning & Environmental Services Manager, and Jeff Pengilley, “we view the use of the upper floors as elevated structural ‘mezzanine’ space…the elevated floor areas (Robotic Storage Platform or RSP) are predominately all storage (85% of total floor area) and not occupied by warehouse personnel.” The rest of the space would have been used for thousands of robots and storage. The size, however, and four-story configuration triggered a city regulation requiring Amazon to build their own fire station. October 23 Pengilley wrote, “Building & Engineering doesn’t recognize or agree with the term ‘unoccupiable’ for building code purposes.”

Despite months of negotiation, and promises from Mayor Flynn to step up economic development efforts, it appears the city and the developer were unable to reach an agreement on fire mitigation measures and 1800 jobs went up in smoke.

In an email dated May 31, 2018, Mallory told Pengilley, “I suspect that the determination of 2.6 sq ft will be a deal killer for the Gaucho project.” 

 

June 26, 2018, after consulting with Fire Marshall Sergio Martinez, Pengilley informed Seefried Properties that their Alternate Means & Methods Request (AM&M) had been denied. An official letter was sent from Building Official Paul Wendt and Fire Chief Darwin Base which stated, “It is understood this will have potentially adverse effects on the development of this project, but the viability of this project is appropriately not a factor that can be considered in the evaluation of the fire and life safety concerns…”

The Development Advisory Committee (DAC) minutes from July 11 contained nearly 200 conditions for approval, including the developer’s response. Some of those conditions included:

                                                   City                                               Developer Response

August 9 Pengilley wrote Ashley Golden, Asst. City Manager and Development Services Director,  “are they getting messaging from somewhere that we will re-evaluate our ‘no’ to their AM&M request…I’m struggling to understand why we are meeting…it seems like a waste of time…they are not close, so minor tweaks and adjustments will not get them to ‘yes’.

The same day Pengilley told Amazon Fire Protection Consultant Phil Friday, “the AM&M decision…was firm…the ‘no’ decision was not close to a ‘yes’ or even ‘maybe’.”

Golden reassured Pengilley & Friday that she had “all day meeting with Gaucho” on “how Gaucho can address the concerns of the Oxnard Building & Fire Departments…I truly believe Gaucho is looking to satisfy the concerns of the Building & Fire Departments.”

Despite setbacks, Pengilley noted August 13, 2018 “project Gaucho still alive.”

August 20 Quintel told Pengilley, “The tenant has not pursued any code changes, as those can take 5-7 years…” The same day, Oxnard fire Plans Examiner Edward Cruz told Pengilley, “Chief Darwin asked Sergio and I to visit an Amazon fulfillment center…”

In September, Seefried was continuing to work toward a resolution and alleviate concerns regarding fire safety. They offered an approval letter from Kern County third party reviewer, Kevin Scott and arranged meetings to review fire test videos.

Quintel told Pengilley that his Sep 27, 2108 inquiry to the purpose of a facility tour was “baffling.” He added, “We have never had any chief building official question our offer to tour.” Later that day, Golden reminded Pengilley, “you were going regardless if you saw it as beneficial or not.” City staff did visit a similar Amazon warehouse in Fresno, CA October 4. Citizens Journal spoke with Mr. Quintel, but he said that he was unable to comment due to a confidentiality agreement.

An Oct. 1, 2018 memo from attorneys at Miller Starr Regalia related to CEQA approval asserted that “the project is fully consistent with the City’s General Plan, and furthers its goals of economic development and fostering compatible commercial uses…we believe that the City Development Services Director may approve the Project and confirm that it requires no further CEQA review…”

Amazon encountered multiple obstacles working with Oxnard that were not present in their dealings with other cities. Oct. 10, 2018 Quintel told Gaglione, “this is the first time we have been asked by a municipality for a study of another facility.” When she explained that this would be a simple, routine procedure for the Association of Transportation Engineers (ATE), Darryl Nelson (Traffic Consultant & Senior Transportation Planner) corrected her saying, “ATE has never collected traffic counts at three similar facilities for any Project proposed in the City of Oxnard.” Gaglione replied, “Then there is always a first time.”

Fire station mitigation measures continued to be discussed through September and October. Oct. 22 Scott Irwin wrote, “I have not heard anything about a resolution to the alternative fire station mitigation.”

Oxnard sent an official letter to Seefried Oct 26, 2018 which stated that their application was “found to be incomplete.” At the end of November Building and Fire had a “list of conditions & features ready.”

Eight months later, the hope of Amazon jobs coming to Oxnard is gone. Less than two years ago, Oxnard lost their 2017 bid to host Amazon’s second headquarters. The Mayor said, “Amazon would be hard-pressed to find a better location than Sakioka Farms.” Former City Manager Nyhoff added,” the benefits of bringing a world-class company like Amazon to our City are enormous.” The headquarters would have brought 50,000 employees compared to just 1800 for a distribution center.

Yet for all Mayor Flynn’s talk of his “determination to attract high-paying, high quality jobs to Oxnard,” the city failed to even bring a distribution center to the city. City Manager Nguyen alerted residents that projected expenditures were approximately $10 million more than than anticipated revenue. 

Check out what Councilman Bryan MacDonald said in the special budget meeting on June 5, 2019.  At timestamp 04:39:50 in the video, he talked about Oxnard not being business friendly.  He said we had a huge opportunity last year, but the city’s approach to it was less than admirable, and that group finally walked away from us and said, “We’ve had enough.  We’re outta here.”
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July 30, 2019 Amazon announced an expansion in Pennsylvania, “Each additional Amazon facility adds to the thousands of jobs in construction and services the company has brought to Pennsylvania. Since 2010, Amazon has invested more than $8.5 billion in the state through its customer fulfillment and cloud infrastructure and compensation to its employees. Using the methodology developed by the U.S. Bureau of Economic Analysis, Amazon estimates its investments in the state have created an additional 8,000 indirect jobs on top of the company’s direct hires.”

“Since 2011, Amazon has invested over $160 billion in the US.” Why did Oxnard reject a piece of the pie?

Amazon has ten fulfillment centers in the Inland Empire and six more across California. Amazon’s blog notes that, “Amazon had a $4.7 billion economic impact on the Inland Empire from 2012-2016 with $1.95 billion created in 2016 alone,” according to John Husing, Ph.D., chief economist for the Inland Empire Economic Partnership.

Amazon’s influence in the Inland Empire has had a positive impact on local sales tax collection and new business in the region. “Across the U.S. over the last five years, counties receiving Amazon investment saw unemployment rate drop by 4.8 percentage points…” Local sales taxes increased 28%, exceeding the CA average.  

 

8-13-19 Publisher’s note:

Well, we finally heard from the city. The Oxnard City Manager told me today that the project application was not formally denied, but that complex negotiations broke down and Amazon’s agent eventually walked away. Because of the confidentiality agreement and Amazon’s advanced proprietary technology involved in the proposal, the city can’t and probably even shouldn’t disclose certain things. However he has agreed to talk to our reporter directly for our upcoming part 2 article to say what they can.

We agreed that the story will also focus on what Oxnard is doing to become more business friendly.

 

 

Gina Harden is a resident of Moorpark, known online as Liberty Grows


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10 Responses to Oxnard Denied Permit for 1500+ Employee Amazon Distribution Center Codenamed Project Gaucho

  1. Paul Jones August 27, 2019 at 2:52 pm

    When will part two be published as I am curious to see how Oxnard is becoming more business friendly. They have gotten worse and more rude each year I go to the zoning dept.

    Reply
    • Citizen Reporter August 27, 2019 at 3:00 pm

      We first interviewed City Mgr. Nguyen, requested more information and part 2 is in process now.

      Reply
  2. Charleen Schuss August 17, 2019 at 6:27 am

    https://www.citylab.com/life/2011/12/folly-corporate-relocation-incentives/737/ Look up articles like this

    Reply
  3. Charleen Schuss August 17, 2019 at 6:24 am

    One wonders what Amazon was requesting in the way of taxpayer’s financial support. Follow up on government give always to businesses is pretty sparse. Without details who knows if this would have been good for Oxnard.

    Reply
    • Citizen Reporter August 17, 2019 at 8:37 am

      I did ask City Mgr. Nguyen that very question this week. He replied that he wasn’t aware of such a thing and that negotiations were nowhere near complete when they broke down.

      Reply
  4. Don Politico August 15, 2019 at 5:26 pm

    Ashley Golden was against the project from the beginning. She kept the negotiations to herself and never allowed the other executives to have a say in the matter. Maybe one of the Latino Assistant City Managers that were runoff would know the truth. I would not believe anything she says. She’s a liar.

    Reply
  5. Citizen Reporter August 13, 2019 at 11:44 am

    The Oxnard City Manager told me today that the project application was not formally denied, but that complex negotiations broke down and Amazon’s agent eventually walked away. Because of the confidentiality agreement and Amazon’s advanced proprietary technology involved in the proposal, the city can’t and probably even shouldn’t disclose certain things. However he has agreed to talk to our reporter directly for our upcoming part 2 article to say what they can.

    We agreed that the story will also focus on what Oxnard is doing to become more business friendly.

    Reply
  6. Bruce Boyer candidate for Sheriff August 12, 2019 at 3:20 pm

    Govt by dictatorship in action. The politicians made extortion demands on the private business; in this case the extortionists made demands that the extorted party was just not willing to pay; so they said no. When a business must obtain ‘approval’ to open’ this is dictatorship, extortion and corruption. Did Oxnard politicians also make ‘ requests ‘ of Amazon? Maybe those ‘unofficial’ requests of say ‘ hire my brother -in-law as a consultant and donate to the non-profit that my wife runs and takes a $250K annual salary from were ‘too much?”
    Govt ‘approval” planning, disc permits et all is the basis for the corruption, free liberty does not facilitate corruption.

    Reply
  7. c e voigtsberger August 9, 2019 at 10:10 am

    It’s comforting to know that Oxnard’s financial picture, including employment is so robust that they can reject a 5% drop in unemployment and a 28% increase in sales tax revenue.

    While the long term future of warehousing is for more and more robotics with the elimination of human pickers and stockers, short term gains in employment and sales tax revenue are not to be casually overlooked.

    Even assuming that the warehouse facility goes close to 100% robotics, still there are ancillary benefits that will accrue to the city. Sales tax revenue will continue to increase. With the decrease in human employment, impact on city services such as water supply and sewage treatment needs will decrease the cost of the facility to the city. The more the warehouse grows in utilization of facility, the more employment will be generated in servicing the equipment by outside vendors which will result in a higher income type employment as opposed to generally unskilled warehouse workers. Robotics and material handling machinery repairs calls for skilled labor with resulting higher wages.

    It would seem like a significant win for the city of Oxnard and its voters. It should not be lost because of some bureaucratic mas macho attitude.

    Ventura County lost a major printing plant with the concomitant associated supply businesses several decades ago due to a “No, we won’t budge” attitude on the part of county officials. The plant was built anyway — in Reno Nevada together with the other supplier businesses that attend to a large printing plant. The printing was still sold into California from that plant. But by golly, the county bureaucrats stuck to their guns and didn’t budge an inch in their demands. The sales tax alone on a million dollar printing press would have been a significant shot in the arm for the county, not counting the sales tax on the associated equipment and, of course, not counting the payroll that would have accompanied the plant. The printing industry still pays fairly decent wages for the skilled labor involved, the kind of wages that have seen flight to friendlier states.

    Reply
  8. Jim MacDonald August 8, 2019 at 1:21 pm

    What an unfortunate loss to the community.

    Reply

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