Editor’s note: This article was updated to include comments from Hollister Mayor Ignacio Velazquez regarding sales tax from the Amazon warehouse. Last updated on Oct. 4 at 11:20 a.m.
The grand opening for the new Amazon logistics facility in Hollister on Sept. 29 could be likened to a slow-motion start for the Indianapolis 500, with the ribbon ceremony and dozens of delivery vans lined up in rows as drivers waited for the starting signal. Then an Amazon employee crossed in front of them with microphone in hand and called out, “Drivers, fasten your seatbelts and start your engines.”
At his signal at approximately 10:30 a.m., the first dozen or so vans rolled slowly out of the facility, then drove off in either direction on San Felipe Road delivering packages throughout Hollister and surrounding areas. Vans would continue to leave the facility every 20 minutes until all the packages were gone, though there weren’t many on the first day.
During the opening ceremony at 9 a.m., station manager Alexander Bronson described the facility as the “last mile” of Amazon’s network of delivery operations. He said the facility will eventually employ 300 people, including 100 full-time Amazon employees working inside the building, and 200 contract drivers who will work for six delivery-service providers. At this time, there are 30 vans and Amazon says that at peak times it could increase to 100.
In March, when the project was brought to the Hollister Planning Commission, while planning manager Abraham Prado did not say the company was Amazon, he did say there would be 190 vans. Bronson told BenitoLink he was not aware of the larger numbers of vans.
Inside the massive warehouse, one person said it had that “new-car smell.” With only a few workers in place, the room was quiet, except for noise from machinery. Aisles of hundreds of empty bins with codes designating geographical areas sat waiting for tractor trailers to arrive later that night.
Amazon and other online suppliers continue to gain retail sales, as e-commerce sales increased 3.3% or $222.5 billion for the second quarter of 2021 over the first quarter, according to the Department of Commerce. This represented 13.3% of all U.S. retail sales.
The physical facility is surprisingly low-tech. A line of bay doors stands a few feet away from roller-conveyors. There were no automated, multi-level, computerized conveyors that send individual packages in every direction to be loaded on waiting delivery vans. Instead, the facility has been designed for people to take packages off the trucks over to the roller-conveyors on carts and then to bins to be sorted before going out to the vans. Codes on every package indicate neighborhoods. The high-tech aspect of the facility is in Amazon’s algorithms that direct each package throughout its worldwide system.
On opening day, the company had hired 27 of the full-time warehouse workers; 23 of them are Hollister residents, according to Natalie Wolfrom, an Amazon spokeswoman. The company will continue to interview prospective employees until the maximum of 100 is reached. That number will increase substantially during peak seasons.
Bronson said, “As the facility reaches a steady state, we will be processing over 20,000 packages daily across 13 zip codes, encompassing over 430 square miles.”
He said deliveries will be made as far east as Los Banos and down the Central Coast to Monterey and Carmel. Initially, three 53-foot tractor-trailers will bring packages each night along Hwy. 156 from Newark. At its peak, that number is expected to increase to at least 14 truckloads each night.
Hollister mayor Ignacio Velázquez said, “I am so proud to be mayor at this point,” describing the facility as a “once-in-a-lifetime” opportunity that will change the city and community. He said he was “astounded at the efficiency of the company.”
Velazquez said most people don’t realize the city still has 1,500 acres that are zoned commercial-industrial which, if developed, would bring even more jobs to the city and county. The number of acres is actually 1,664, according to Abraham Prado, of the Hollister Planning Department.
When the Planning Commission approved the project in March, apparently none of the commissioners, particularly David Huboi, were aware that Amazon would occupy the building and there was no public input. Only Velazquez seemed to know the tenant just before he announced on March 12 that it would be Amazon.
There have been no responses to repeated Freedom of Information requests to the city of Hollister for information concerning possible communications between staff, council members, the developers or Amazon prior to the announcement.
“When you bring 300 jobs to your community what that means is 300 families get to see their mother or father home for dinner, for the sports programs, and all the other things that make up family time,” Velazquez said, adding that the second benefit is the reduction in commuter traffic every day and people can bike to work if they want. “Then there’s the property taxes,” he said. “They allow us to function as a community. Then there’s sales tax revenue. In baseball terms, this is a grand slam.”
He later clarified since the warehouse is not expected to be a direct source of sales tax revenue for the city, he said people who live and work in the community are more likely to shop local thus increasing sales revenue through other local businesses.
“Living and working in your own town makes people more likely to invest and take pride in their town,” Velazquez said.
Last March, Brett Miller, Hollister city manager, was not sure how much would be gained in sales tax or other revenues. There were a number of impact fees, though, including traffic, sewer, storm drain, police and fire totalling more than $499,000. Velazquez told BenitoLink then that the facility would generate approximately $500,000 in property taxes annually.
As for sales tax, if the seller of a product being shipped by Amazon is based outside of California, the sales tax is based on the buyer’s zip code. If the seller and buyer are in the same state, then it is based on the seller’s zip code, according to Sales Tax DataLink. San Benito County’s sales tax rate is 8.25% which is a combination of state and county taxes.
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