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Amazon Backs Off Plans for Warehouse in San Diego Suburb

Developer Cites County Worker Protection Proposal in E-Commerce Giant's With Drawl from El Cajon Site

By Lou Hirsh CoStar News October 21, 2021 | 2:50 P.M.

Amazon has backed out of plans to lease a distribution facility in El Cajon in eastern San Diego County, a decision that may have been spurred in part by consideration of new worker protection laws for projects approved on county-owned land.

Chesnut Properties, a local developer, received county approval in March for a proposed 142,000-square-foot warehouse complex that would include a 17,000-square-foot office building on county-owned property near the regional Gillespie Field airport in El Cajon. The last-mile distribution facility at 1756 Weld Blvd. was to be leased at completion to Amazon, though developer Lee Chesnut told county supervisors his company had not yet completed a lease agreement with the e-commerce company. Amazon said this month that it was no longer considering the El Cajon location but did not specify a reason.

“While we have decided not to pursue the site in El Cajon, we continue to assess opportunities to invest and grow across the region,” said Amazon spokeswoman Maria Boschetti in a statement this week.

“Amazon is a dynamic business and we are constantly exploring new locations,” Boschetti said. “We weigh a variety of factors when deciding where to develop future sites to best serve our customers. It is common for us to explore multiple locations simultaneously and adjust based on our operational needs.”

The El Cajon project had drawn opposition from some local residents, including a group called Neighbors Against Noise and Traffic which sued in April, alleging officials had not properly considered environmental impacts of the development. The suit has yet to be heard in San Diego County Superior Court.

However, in a letter to the community obtained this month by the news site Vice, Chesnut Properties cited a county proposal known as the Working Families Ordinance, calling for workers in new projects to be paid prevailing union-level wages and to receive at least 56 hours of paid sick leave, as the main reason for Amazon’s withdrawal from the El Cajon project.

Chesnut Properties said the mere discussion of the ordinance “has already cost over 400 great jobs” targeted for a property where the developer had been working for more than five years to bring in Amazon. Representatives for Chesnut Properties and San Diego County supervisors did not immediately respond to CoStar News’ requests for comment, and it was not clear whether Chesnut's plans for the site would change with Amazon's withdrawal.

Supervisors this month voted to move ahead with an economic analysis of the Working Families Ordinance, and officials said it is expected to be approved early next year. A majority of supervisors and regional labor leaders support the proposal, but it is opposed by the city of El Cajon, local business operators and some regional economic development groups.

The ordinance was first proposed in July by county Supervisors Terra Lawson-Remer and Nathan Fletcher and would apply to industrial and other commercial and civic projects built on county-owned land. Lawson-Remer said at a supervisors meeting this month that it is needed to “uplift working families and create good-paying jobs for people in San Diego County.”

Supervisors are also looking to make sure companies bidding on publicly funded construction projects on county land are held to proper safety and wage standards. “When you have public land it should be used for public benefit,” said Lawson-Remer during the meeting. “And we can’t possibly support jobs on public lands which keep people in poverty wages and don’t allow people to put a roof over their heads or put food on their table for their families.”

In opposing the county ordinance last month, the city of El Cajon noted in a staff report that the measure’s 56 hours of required sick time is well above the California minimum of 48 hours. The city also noted half of El Cajon’s 1,000 acres of industrial and manufacturing land is owned and controlled by the county of San Diego, meaning the ordinance could discourage other businesses from locating within large swaths of the city.

The labor issue emerged as Amazon has come under fire nationally for its workplace practices and opposition to union organizing over the past year at its distribution centers in locations including Bessemer, Alabama and Staten Island, New York.

The Seattle-based e-commerce giant is among the nation’s most active occupiers of new space and has added nearly 4 million square feet to its San Diego regional industrial and office footprint during the past three years. That includes a 3 million-square-foot distribution center that opened earlier this year in the border-adjacent Otay Mesa neighborhood.

CoStar data shows Amazon added more than 100 million square feet to its nationwide industrial space portfolio during 2020.

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