Wal-Mart officially pulls plug on Merced distribution center
A proposed Wal-Mart distribution center that has been in limbo for years in Merced officially is dead, the company announced Wednesday.
Wal-Mart, the world’s largest retailer, proposed in 2005 to build a 1.2-million-square-foot distribution center on a 230-acre site on the southeast edge of Merced. It was expected to employ up to 1,200 people.
Putting an end to the center was a “business decision” made by Wal-Mart, Mayor Mike Murphy said Wednesday.
The nature of retail has changed since the project was announced 12 years ago, according to Delia Garcia, Wal-Mart’s senior director of communications.
“We are innovating our business. We are transforming our business,” she told the Sun-Star on Wednesday. “We are investing heavily in e-commerce, and our e-commerce capability.”
The fact that it had an opportunity to bring so many jobs to Mercedians was the reason we were so supportive of it.
Mayor Mike Murphy
After it’s initial proposal, the center became mired in a three-year court battle brought by the Merced Alliance for Responsible Growth, which objected to Wal-Mart’s salary practices and argued the 24-hour center would negatively impact nearby homeowners. The California Supreme Court declined to hear the case in March 2013, effectively killing an appeal from the group.
The site designated for the center, at the northwest corner of Gerard Avenue and Tower Road, sat idle until last month when the company began drilling to test the land, according to city staffers. Then came the change in plans.
Murphy said the city was looking to other projects to bring jobs to Merced.
“The fact that it had an opportunity to bring so many jobs to Mercedians was the reason we were so supportive of it,” he said. “We’ve got a lot of other projects in the works and lot of other good things that are happening, and we’re not going to let this deter us.”
“The city government did everything it could to, No. 1, facilitate it coming to Merced and, No. 2, to try to retain them once they changed their mind.”
Wal-Mart increasingly has moved to online sales, buying up stakes in online companies like Jet.com, Moosejaw.com and Shoebuy.com, Garcia said.
The company is balancing out its online presence and brick-and-mortar stores, she said, adding that Merced’s Loughborough Drive store has been around almost 25 years.
“The distribution center network supports that, but we’ve been innovating and transforming our business as the retail landscape is changing rapidly,” she said.
More and more retailers are moving towards e-commerce and online fulfillment centers according to Frank Quintero, Merced’s economic development director. “Look at Macy’s and Nordstrom’s’ web sales and even Target is following the online model,” he said. “Wal-Mart has a huge online presence that changes the need and nature of their warehousing operations.”
City leaders were quick to say Merced has a bright future, pointing to the UC Merced 2020 Project, a rise in home-building permits, a large retail center and downtown projects.
City Manager Steve Carrigan said the city will bounce back from the disappointment.
“We really would have liked the Wal-Mart project,” he said. “We are going to move on and look for other opportunities.”
Thaddeus Miller: 209-385-2453, @thaddeusmiller
This story was originally published March 15, 2017 at 12:22 PM with the headline "Wal-Mart officially pulls plug on Merced distribution center."