Warehouse setback bill will limit jobs and economic growth, warn city officials and business leaders

Contact:
Kayla Sherwood, 530-844-1744, [email protected]

Sacramento, CA - City officials and business leaders today issued a warning that a gut-and-amend bill jammed through the Legislature at the last minute will lead to job losses and limit economic growth, impacting California's overall economy. AB 98 (Carillo, Juan and Reyes), which now sits on Gov. Gavin Newsom's desk, would impose statewide mandates on all cities and counties on where industrial warehouses can be located and how they must operate.

"AB 98 severely limits our job creation efforts, leading our residents to drive one to two hours to find employment in the Inland Empire and LA area," says Mayor Elizabeth Becerra of Victorville in the High Desert region. "Not only do these long commutes negatively impact the quality of life for our residents and their families, but long commutes also increase vehicle miles traveled and harm air quality."

San Bernardino and Riverside Counties are among the top five counties that provide the most warehouse jobs in the state, but these jobs are equally important throughout California. In San Mateo County, warehouse jobs account for roughly 8.5% of the total labor workforce. From 2019 to 2023, the average annual salary increased by $14,000 for a warehouse job in Los Angeles County.

"We are fiercely protective of jobs," said Mitchell Vieyra, Senior Director of Government Affairs for the Los Angeles County Business Federation, widely known as BizFed. "In that spirit, our members across all business sectors in Southern California are fiercely opposed to AB 98, a last-minute bill that would choke our supply chain, slow local manufacturing, and threaten livelihoods. We call for Governor Newsom's swift veto of this bill, which was pushed without adequate input from impacted Californians."

The stringent warehouse requirements will not hurt just local communities, but the state and national economies. If AB 98 is signed into law, there will be unintended impacts on the delivery of materials to warehouses - from the southern California border to the 11 public ports that move goods and cargo around the state. The Inland Empire warehouse industry and southern California ports support 40% of all goods movement to every congressional district in the nation.

Business leaders and city officials warn that the new restrictions could increase the cost of everyday goods and push businesses out of state.

"AB 98 is flawed policy," says Paul Granillo, president and CEO of the Inland Empire Economic Partnership. "It infringes on people's right to a job, residents' rights to let their elected council members make land use decisions and harms the economic future of the Inland Empire."

City officials say that these one-size-fits-all rules for the zoning of industrial warehouses and prescriptive trucking routes could severely reduce the availability of land suitable for logistics use, even in areas already zoned for industrial purposes. Warehouses of any size will face costly requirements. Cities and counties, even if they are not approving new or expanded warehouses, will be forced to update their circulation element and truck route mandates - without any funding to support these requirements. The overly broad terms in the bill are fundamental flaws in the legislation.

"In densely populated regions, these restrictions could make it nearly impossible to find viable sites for new or expanding logistics facilities," says Mayor L. Dennis Michael of Rancho Cucamonga. "This not only hinders new developments but also forces existing facilities to consider relocating out of state."

Michael notes that implementing the bill will be costly for local communities, as AB 98 unnecessarily duplicates existing policies that many communities, including Rancho Cucamonga, already use to manage public health and air quality.

"AB 98 was a gut-and-amend that was jammed through the Legislature in the final week of session," said Cal Cities Executive Director and CEO Carolyn Coleman. "Cal Cities is calling on the Governor to send a strong message about the importance of public process by vetoing AB 98. That will allow for lawmakers to come back to the table the next legislative session with ALL stakeholders - including local governments -to find a solution that meaningfully balances the interests of all the stakeholders involved."

Established in 1898, the League of California Cities is a nonprofit statewide association that advocates for cities with the state and federal governments and provides education and training services to elected and appointed city officials.

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