Hollister council tables Amazon-area annexation after company shifts facility type, raising sales-tax and traffic concerns

The Hollister City Council on Nov. 12 tabled a vote on annexing 600 Ernie Drive into Community Facilities District No. 4 after Amazon staff told the council the company had changed its planned facility type.

Planning manager Eva Kelly told the council annexation into CFD No. 4 (Tax Zone 1) was the standard condition for nonresidential projects and that, on staff budgeting, the CFD would be about $1,900 per acre on roughly a 70‑acre site — roughly $140,000 in city CFD revenue in the first year. But Stephen Maduli Williams, senior economic development manager for Amazon, said Amazon revised the project from an AMXL fulfillment center to an IXD (cross‑dock) facility to better serve regional distribution needs. Under current California sales‑tax classifications, the IXD model does not generate local sales tax revenue in the same way a fulfillment center would.

"We made a business decision to move forward on an IXD versus an AMXL FC," Maduli Williams said, adding that Amazon could not provide a precise sales‑tax projection for the originally proposed facility until a year of operations and transaction data were available. He said Amazon remained committed to hiring "up to 800 employees" once the site launches.

Vice Mayor Roland Resendiz and other council members reacted to the revenue implication and raised concerns about truck traffic, enforcement of truck‑hour restrictions and the effect on city streets. The city manager and staff said an early projection from a sales‑tax consultant, before Amazon changed facility type, had estimated roughly $1 million to $1.5 million in annual sales‑tax revenue for a like‑sized fulfillment center, but staff emphasized that projection would not apply to the IXD model.

City staff also said traffic impact fees and mitigation measures identified in the project's environmental review — including planned roundabout improvements along San Felipe Road — remain separate mechanisms to address road impacts. Planning staff said they are reviewing revised truck and employee counts submitted by the applicant to ensure consistency with the adopted environmental addendum.

After debate about potential legal risk if the city were to deny ministerial actions, Councilmember Resendiz moved and Councilmember Burns seconded to table the annexation to the council's December meeting to allow further discussion and analysis. The motion passed and the item was continued.

The council did not adopt or reject the annexation; staff said tabling preserves the city’s options while the applicant and staff continue to reconcile traffic counts and fiscal implications. The council asked staff to return with more detailed analysis of projected revenue scenarios, enforcement and any mitigation that could be negotiated with the property owner and tenant.

What happens next: The annexation will return to the council in December for further consideration. The city’s planning division and financial staff will provide updated traffic and fiscal analyses ahead of that meeting.