Amazon expands in California - SFGate http://www.sfgate.com/business/bottomline/article/Amazon-expands-in-Ca...

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Andrew S. Ross Updated 8:27 pm, Tuesday, October 29, 2013

Amazon's California presence continues to grow.

In addition to celebrating the first anniversary of its 1 million-square-foot distribution

center in San Bernardino on Tuesday, with Gov. Jerry Brown in attendance, the Internet
retailer announced plans for an even larger facility, in Moreno Valley (Riverside
County).

That brings to at least four the number of giant warehouses for Amazon in California,
employing thousands of people in hard-hit regions. Similar centers in Tracy and
Patterson (Stanislaus County) opened this month. "We are excited to grow our presence
in the great state of California," said Mike Roth, Amazon's vice president of North
American operations.

California and Amazon haven't always been on good terms, but once the issue of
Amazon not paying state sales tax on goods sold here was resolved - on the state's terms
- nothing but warm words have been exchanged.

"The innovative spirit of Amazon fits well with the creative and entrepreneurial
environment in California," Brown said at the San Bernardino festivities.

The Kindle and Kindle Fire, Amazon's answer to Apple's iPad, are products of Lab126,
Amazon's R&D department located in - where else? - Cupertino. Next up from the lab:
an Amazon smartphone codenamed "Smith," reportedly with a 3-D eye-tracking
interface. Also, a set-top box, codenamed "Cinnamon," which may or may not be ready
for the holiday buying season.

Office-wise, the Seattle company is leasing 580,000 square feet at Moffett Towers in
Sunnyvale (more space for Lab126), and in August signed up for 65,000 square feet in
San Francisco's Financial District, home to Amazon's music division and close by the
company's 83,0000-square-foot space near the Embarcadero.

Check the San Francisco job listings, where you'll find openings for Amazon's

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"Advanced Gaming Technology team." Oh, and there's also a listing for a "program
manager for Amazon Fresh Quality Control" at its Tracy facility, 60 miles east of San
Francisco. That means Amazon's rollout of same-day grocery deliveries in the Bay Area
isn't far away.

Still, there are those who will never forgive Amazon for some of its past - and present -
behavior: The stomping on small brick-and-mortar retailers, and the vast amount of
money lost to public treasuries in the years it refused to pay state sales taxes. Reading
the most recent book on Amazon and its CEO - "The Everything Store: Jeff Bezos and
the Age of Amazon" - won't make them feel any better.

Yep, Amazon is here to stay - and how.

Data points: The city of Fresno has very little cash on hand - 0.1 percent to cover its
main operating fund on a daily basis.

Richmond has the eighth-highest debt per capita - $3,118 - of America's 250 largest
cities. Hayward has experienced a 10 percent decline in state aid from 2007 to 2012, the
fifth-largest drop in the nation.

Pension costs as a percentage of a city's general fund: San Jose, Oakland and Berkeley
are Nos. 3, 4 and 5 in the nation, respectively (ranging from 30.9 percent for San Jose to
26.1 percent for Berkeley).

These and other downbeat statistics are brought to you by Merritt Research Services, a
cruncher of municipal finance data headquartered in Iowa. It's featured in a Wall Street
Journal series on the financial health of U.S. cities - more specifically, how close some
may be to Detroit, which filed for bankruptcy.

At least Fresno is a tad better off than Pomona (Los Angeles County) and Charleston,
S.C., which have zero cash on hand. Hayward might be thankful it hasn't lost as much
state aid in the past five years as Chula Vista (San Diego County) - 14.5 percent.

Speaking of pension costs, how about Pasadena at 43 percent of the city's general fund?
Seven of the 10 cities with the highest pension costs as a percentage of the general fund
are in California, the others being Anaheim, Roseville (Placer County) and Torrance

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(Los Angeles County).

Happ(ier) returns: L.A. county's pension fund is doing pretty well, at least with its
private-equity investments. .

The $38 billion Los Angeles County Employees Retirement Association generated a 10.2
percent annualized return over a five-year period, second only to Massachusetts in a
survey of public pension funds by the Private Equity Growth Capital Council.

San Francisco's $15 billion fund and Contra Costa's $5 billion fund also did well. They
came in seventh and 10th, with 13.1 percent and 12.7 percent returns, respectively, out
of 146 public pension funds with assets over $1 billion surveyed.

Information was not available for other Bay Area counties.

The two biggest pension fund investors in private equity - the California Public
Employees' Retirement System, with $34.2 billion invested, and the California
State Teachers' Retirement System, with $22.6 billion invested - had returns of
9.8 percent and 12.9 percent, respectively, annualized over 10 years.

Andrew S. Ross is a San Francisco Chronicle columnist. E-mail:

bottomline@sfchronicle.com Twitter: @andrewsross

2017 Hearst Communications, Inc.

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