E-commerce is coming to American Canyon with the announcement that Napa Logistics Park has signed a tenant for its first mammoth building.
The developer, Orchard Partners, says demand is high for its remaining four structures still to be built — though those buildings could be years away following a request for more time to complete the project.
Ernie Knodel, a partner with Orchard Partners, informed the American Canyon Planning Commission on Sept. 12 that he was “happy to report we have leased the building, and we’re in the process of fitting it out for an e-commerce user” who intends to use all of the 646,000 square foot facility.
Knodel did not say who the tenant will be, adding, “It will be used as a customer distribution center” that will fulfill online orders. He expects the unnamed company to employ about 200 workers to start.
When asked to name the tenant, Knodel declined. “Unfortunately, I’m not at liberty to say who the tenant is yet,” he told the American Canyon Eagle in an email on Sept. 21.
Rumors circulated over the summer that Orchard Partners was negotiating with IKEA to lease the building, according to longtime Napa County commercial real estate broker William Kampton. Knodel previously declined to comment on whether he was negotiating with the ready-to-assemble furniture retailer.
At the same meeting on Sept. 12, Knodel requested a 10-year extension on developing Phase II of Napa Logistics Park, which is slated to build four more buildings totaling 2.3 million square feet of space for warehouse, distribution, e-commerce, manufacturing or office uses.
“There is substantial demand” for the buildings, said Knodel, who insisted the 10-year extension was a product of infrastructure delays impacting the project.
“The entire infrastructure for phase two is essentially on hold,” he said, adding that his company has “no interest in sitting on this property for 10 years.”
“We’re ready set to go,” Knodel added. “The only issue we’ve been coming across is we don’t have a waste water system to connect to.”
An existing sewer line for the area, installed in the 1970s, won’t suffice for Napa Logistics Park, according to Knodel, who has been negotiating with the city of American Canyon and neighboring property owners to build a new waste water system.
“This seems to make a whole lot of sense,” said Knodel, “and we’ve made a lot of progress” with the design, but there are a “couple of issues that we still need to get across,” and “we’ve got to get a lot of parties on board” with this plan.
Orchard Partners is facing a deadline of Dec. 15 when its conditional use permit for Phase II expires. They previously asked for a one-year extension when the permit deadline was originally set for December 2016.
In exchange for getting the 10-year extension, Orchard Partners has entered into a development agreement with the city, which demanded certain “community benefits” from the developer.
Those benefits included foregoing a $300,000 reimbursement for civil engineering costs related to designing the new wastewater water system.
Orchard Partners also agreed to fund a $138,000 geologic survey to determine the location of an earthquake fault near the project site.
Plus, the developer will contribute $250,000 towards the American Canyon Fire Protection District’s capital fund, payable annually over 10 years.
Some planning commissioners said the $250,000 contribution to the fire district was insufficient.
Commissioner Andrew Goff said the fire department may need to build a second firehouse someday to cover development in the north part of town where Napa Logistics Parks is located.
The $250,000 would be “quite a bit, but it’s not going to meet the needs of the fire district if development continues to happen in that area,” said Goff.
Chairman Eric Altman said because the population “forecast” for American Canyon calls for it to grow to 25,000 or 30,000 people, the $250,000 “likely falls short in terms of what the community’s needs will be.”
Altman then asked Knodel if he was willing to negotiate and “up the ante on that figure.”
Knodel responded by saying Orchard Partners’ contributions to the city have been “fair and more than fair,” and “I think our negotiations are pretty well complete.”
However, Knodel added if the city felt the developer has not given fairly, “We’re open to talking about it.”