First large warehouse project following zoning changes making its way through City Hall
This parcel of land across Interstate 10 could become the site of the first large distribution center in the city, generating tens of millions of dollars in sales tax revenue for Palm Springs.

First large warehouse project following zoning changes making its way through City Hall

Kendall Balchan image

Kendall Balchan

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April 12, 2022

A new warehouse the size of about 13 football fields could be headed to land within city limits just months after the Palm Springs City Council voted to change zoning rules to allow for taller buildings in some industrial areas.

Property management company Snider Interests LLC sent a pre-submittal conference application to the city’s Department of Development Services last month for a project described as “the Palm Springs Fulfillment Center,” to be located near Indian Canyon Drive and 19th Avenue. The land is north of Interstate-10 and abuts Desert Hot Springs but is within the city limits of Palm Springs.

Mar Snider, the project manager who filed the paperwork, declined to comment Tuesday on who is looking to purchase the land. She also would not comment on the involvement of any future developers or businesses. She said Snider Interests would have more to say as the company gets closer to filing a formal application sometime in the future.

Palm Springs businessman Fred Noble, whose Wintec Energy wind turbines dot much of the property in the area, said the parcel is owned in partnership by survivors of his brother Thomas Noble, who passed away in 2020. The land is listed online as a pending sale with an advertised price of $9.9 million. 

In paperwork filed with the city, the project is described as a 44-foot tall fulfillment center totaling 750,000 square feet on 39 acres. The fulfillment center would operate 24 hours a day and employ up to 2,000 people. Noble said Snider Interests would likely build the project and then lease or sell it to the company that will ultimately need a place to store and distribute its goods. Typically, businesses such as Amazon or Costco need such space.

The new proposal for a large warehouse is not the first attempt to build one inside city limits. In February 2021, developer Transwestern Development Company withdrew its plans for a 1.4-million-square-foot warehouse fulfillment center on the far north edge of the city after local environmental groups opposed it. Other would-be warehouse developers held talks with city staff that year. They ultimately declined to move forward, citing a need for zoning changes that, among other things, would allow for buildings taller than 40 feet high.

In January, the Palm Springs City Council voted unanimously to change those zoning rules, making it easier to build fulfillment centers up to 95 feet high and reap their profits. Unlike large buildings used as warehouses, fulfillment centers can generate tens of millions in sales tax revenue for cities that allow them because goods go directly to consumers instead of being shipped to stores. Palm Springs City Manager Justin Clifton has stated Palm Springs might gain as much as $40 million in additional yearly tax revenues if a fulfillment center is built within the city limits. The city collected $22.3 million in sales and use taxes in the past fiscal year.

During deliberations at the January meeting, some Palm Springs councilmembers acknowledged that companies that build fulfillment centers are often called out for poor working conditions and low wages. Allowing such buildings could also pose risks to the environment. However, if Palm Springs were to hold out, they feared the city would be left behind as nearby jurisdictions allowed the fulfillment centers and benefited from tax revenue. 

That scenario began to play out shortly after, as Desert Hot Springs changed its zoning rules to allow buildings in industrial zones to be as high as 120 feet, setting the stage for even taller buildings than Palm Springs. 

At a Jan. 18 meeting, Desert Hot Springs Mayor Pro Tem Gary Gardner laid out that city’s strategy for making the zoning change, saying, “If we really, truly want to attract businesses here other than cannabis to diversify our economy and expand our tax base to anything that would resemble a distribution warehouse they’re going to need that 120 feet in height. If you look at what Palm Springs just did, they’re not going to attract anyone with that. We need to stay a step ahead of that.”

That change in zoning paid off, as Desert Hot Springs is now on track to become home to one of the largest warehouses in the country at 3.4 million square feet. That property is being developed by Seefried Industrial Properties, which has not revealed which business will use the building.

The first major e-commerce company to dip its toe into the Coachella Valley was Amazon. earlier this year, its 93,000-square-foot last-mile delivery hub took over an abandoned Sam’s Club on Date Palm Drive in Cathedral City.

Last month, Jurupa Valley turned down a proposal to build a 1.3-million-square-foot distribution warehouse within its city limits. Leaders there cited concerns over increased truck traffic adding to the already poor air quality in the Inland Empire. 

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