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Fresno City Council Approves Incentive Deal For Gap Inc. E-Commerce Facility

Apr 5, 2018

The Fresno City Council has approved a tax incentive deal with retailer Gap Inc. that would move the company’s e-commerce fulfilment center to Fresno.  City officials say the deal could result in as many as 500 new jobs.

The thirty year deal rebates the company $15,000 for every full-time job it creates, once it hits the 500 job threshold. The money would come from sales tax collected on items purchased from the facility, which would be housed in Gap’s existing warehouses near Fresno Yosemite international. It could be worth as much as $10 million.

Fresno City Councilmember Garry Bredefeld said this deal, combined with e-commerce centers for Amazon and Ulta Beauty will give Fresno’s economy a boost.

“The best way to lift somebody up, give them a job. There’s pride with a job. There’s an ability to be self-reliant, they have the potential to own a home, invest in their community, pay property taxes, pay sales taxes,” said Bredefeld.

However, not everyone was as enthusiastic about the project. A local faith-based group raised concerns over the additional diesel pollution from company trucks, and councilmember Oliver Baines said the city should demand Gap hire workers who live in the city.

“If we’re going to be giving $15,000 in incentive per employee, then that person needs to come from Fresno,” said Baines.

In the end the deal passed on a 4-2 vote without a local hire provision, and without support from Baines and council president Esmerelda Soria.

The Gap currently employs around 350 full-time and part-time workers at its Fresno distribution center, which houses goods on their way to the company’s brick and mortar stores on the west coast. The two buildings total around 2 million square feet and were built in 1999 and 2001, in another incentive deal from city hall. In that case, the city sold Gap the land for $2.00 in order to land the distribution center.

The deal eventually drew scrutiny from the FAA, which in 2007 deemed the city should have sold the property for fair market value. As a result the city had to pay a nearly $6 million fine over a ten year span. The money was dedicated to improvements at the city-owned airport.