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MH Shoe Palace DC Project - Part I

Updated: Jan 11, 2020

MH Shoe Palace Distribution Center

Update (12-2-2019)

Did you hear that Shoe Palace is now in the process of leasing all or part of their new 500,00 square foot distribution center to other tenants? We first learned about this alarming change from a sign recently posted on the property under construction, within view of Hwy 101. We also found this listing online:

If you recall from our article included below, the Traffic Impact Analysis on this development was based on Shoe Palace’s own estimates that 56 new loading docks would only add 6-8 truck trips per day, all during business hours. Now, Shoe Palace intends to lease this massive building to other tenants. Therefore the Traffic Impact Analysis is even more of a sham because Morgan Hill’s Planning Department has no control over who moves into the 500,000 SF distribution center. Ultimately, because there is no conditional use permit (CUP) they could conceivably have 56 truck bays in use 24/7, generating big rig truck emissions all day, all night, and clogging our city streets with trucks queuing up for their scheduled times. Keep in mind, this building was never voted on by the Morgan Hill City Council, nor was it reviewed by the Planning Commission. This disaster of a project was authorized by just one person in the planning department. We will continue to research what is going on with the Shoe Palace development and leasing status. If you find out anything more, please email us at


Original Article (9/8/2019) You’ve seen the questions posted on Nextdoor or wondered yourself: “what’s with all the bulldozers along 101 just south of Cochrane”?

The short answer is without any engagement with Morgan Hill residents, without any review by the Planning Commission, without any economic impact analysis, with the City Council never putting this project on ANY legislative agenda and never discussing it in a public meeting, and NOT taking a single vote or other recorded decision, a half-million square foot Distribution Center with FIFTY-SIX TRUCK LOADING DOCKS was approved in 2018 by one person and Morgan Hill citizens only found out about it once they saw dirt being moved and dust flying on the construction site. Welcome to business-as-usual in Morgan Hill! Like you, we had no idea what was going on at that site so the team at Morgan Hill Responsible Growth Coalition did some bulldozing of our own and the dirt we uncovered smells like something other than the typical clay, silt and loam found in Morgan Hill soil.

The now under-construction Distribution Center is going in on an empty parcel adjacent to an existing building owned by Shoe Palace at 755 Jarvis Drive. Just to the north of the new site, Jubilee Church occupies 20,000 square feet of the 51,000 square foot NPI Solutions building. We’re going to talk more about the relevance of both those adjacent sites in Part 2 of this story. A 500,000 square foot Distribution Center located right at Morgan Hill’s gateway must have been reviewed by the Planning Commission and approved by City Council right? We started by searching the MH City Council and Planning Commission meeting calendar archives to see when the site (by parcel number) was on a regular meeting agenda. Surprisingly, nothing showed up so guessing it might have something to do with the neighboring site. We tried searching for “Shoe Palace”. That query showed one instance when this project was discussed in an open meeting. During the July 13, 2018 “mid-year update” the Assistant City Manager told the City Council: “wanted to alert you to the fact that the local Shoe Palace business is proposing and working with us to build a half million square foot extension on their property that's owned next to them, which is a BIG DEAL. Design wise it would be a very tall kind of industrial building that has opportunities for them to grow their business over time, so it's a pretty exciting project and uhm they are motoring along with their architecture and environmental review now.” So the City Council, the City Manager’s Office, the Planning Department, and the Economic Development Department were all in attendance. They heard the size and scope of the project but didn’t ask any recorded questions. And the city apparently viewed it as Shoe Palace’s job, not the City’s to do an environmental review which was “motoring along”. We then tried searching the MH main site for Shoe Palace and found a link to the ‘Shoe Palace Expansion’ on the commercial projects portal and headed to the planning department building to review the project folder. ‘MITIGATE’ ENVIRONMENTAL CONCERNS BY IGNORING THEM In May 2018, Shoe Palace filed an application with the city to build a 503,400 square foot, 56 Truck Bay “warehouse, distribution, and office facility”. An Initial Study (IS), used to determine if a project may have a significant effect on the environment and if a project can be approved without having to do an EIR was paid for by the applicant. The MH Planning Department decided the Initial Study showed: “Although the project, as proposed, could have had a significant effect on the environment, there will not be a significant effect in this case because mitigation measures are included in the project, and, therefore, this Mitigated Negative Declaration has been prepared.” Engaging the community in a way we are all too familiar with a “Notice of Intent to Adopt A Mitigated Negative Declaration” was sent to a total of S-I-X-T-E-E-N residents and businesses which started a 30-day comment period on October 19th, 2018. Does the city think notifying 16 residents that a half-million square foot Distribution Center was going to be built in our city is another good example of transparency and openness? The Shoe Palace project folder maintained by City of Morgan Hill indicates the city placed an order for notification to appear for one day in the Hollister Freelance newspaper. We have since learned that the city also published the notification for one day in the Morgan Hill Times. ( MH TIMES #1842, page 17). Unfortunately, few residents were aware of these notifications or knew this project was about to happen and no residents or businesses filed comments. There was no open public meeting scheduled.

The CA Department of Transportation and a Law firm representing the Laborers International Union (LIUNA) filed comment briefs that raised significant issues for (a) the Traffic Impact and (b) the City’s finding that an EIR was not necessary. In the Initial Study, the City used egregious arguments which had “significant omissions and flaws [1]” which are “inadequate as a matter of law [1]” to mischaracterize the true adverse environmental impacts the Distribution Center will have. The LIUNA response also noted “The proposed large distribution facility will have both individually and cumulatively significant environmental impacts on air quality, greenhouse gas emissions, traffic, and biological resources. Yet the City has failed to prepare an environmental impact report (EIR) to analyze and mitigate these impacts. LIUNA urges the City to require an EIR to ensure that all Project impacts are fully disclosed to the public and the City Council and are fully mitigated [1].” TRAFFIC IMPACT: INDEPENDENT STANDARDS-BASED ANALYSIS OR SHAM? The most egregious part of the Initial Study was the Traffic Impact analysis. The City, Shoe Palace and Hexagon Traffic consultants want us to believe that despite incorporating FIFTY-SIX Truck Docks the new building will “increase truck deliveries from five to eight per day” (first paragraph on the above city web link). Hexagon, the City’s go-to partner, and currently responsible for the Trammell Crow traffic analysis, said a maximum of eight Truck Trips was based on “driveway counts completed at the existing project site in July 2018” which supposedly showed that “the existing warehouse typically receives three to five trucks a day” although page 92 of the Initial Study states “a total of 10 delivery trucks access the site daily”. We don’t see ANY documentation in the project folder of this ‘driveway count’ measurement and have asked for a copy of the formal document that explains collection methods and the detailed measurement results but haven’t got any answer. Part 3 of this story is going to cover Hexagon’s analysis of this project and the long term impact it will have on anyone who relies on 101, what it portends for the TC Mega Distribution Center and how you can help us ask the CA Department of Transportation to take a closer look at what is really going on. For now, let’s just apply some COMMON SENSE. Shoe Palace’s own ‘study’ shows they currently handle 8-10 trips per day at their existing building that has F-O-U-R tuck docks. Apparently, they are incorporating 56 docks in the new Distribution Center as VERY expensive (estimated total cost of at least $5M ) decorations with no plans to ever use 52 of them? A California registered Civil and Traffic Engineer with over 50 years professional consulting engineering and practice in traffic and transportation performed an independent analysis on behalf of LIUNA which made the following conclusions: 1) “The proposed expansion facility is clearly a fulfillment center. Rather than acknowledge the underlying purpose of the proposed expanded facility to accommodate the company’s expanding on-line presence and additional stores, the IS traffic analysis assumes that the smaller existing facility is representative of the future operations of the much larger proposed facility.” 2) “By relying on the assumption that the fast-growing Shoe Palace business will ship the same amount of product to its stores and many on-line customers as it currently ships into the future is not reasonable given the company’s rapid growth rate in recent years and the size of the Project itself.” 3) “By failing to acknowledge the applicable trip rates identified by the Institute of Traffic Engineer’s (ITE) the IS traffic analysis is not supported by substantial evidence.” 4) “It is clear that the Project would have significantly more PM peak trip generation than estimated in the IS/MND and, more likely than not, have significant traffic impacts at some intersections.” The CA Department of Transportation notified the City they were concerned about the 101/Cochrane ramps in both the northbound and southbound directions noting the analysis “does not accurately represent the existing performance of these ramps” and “inadequate vehicle storage could result in queues backing up onto the freeway mainline creating significant conflicts”. NOT SIGNIFICANT --> NO VOTE and NO VISIBILITY Not only did the Community Development Director decide to bypass an EIR and rely on a bogus Traffic Impact Analysis, she also decided the entire 500,000 square foot Distribution Center was ‘not significant’. Specifically, according to the MH Zoning Code all the following factors must be considered: a. The visual prominence of the project when viewed from the public right-of-way and/or private property; b. The project height, mass, and area of site disturbance; c. The type, character, and proximity of adjacent development; and d. The potential of the project to create adverse impacts on adjacent uses or the community at large. Of course, ignoring item ‘d’ directly contradicts the Planning Department’s own conclusion from above: “the project, as proposed, could have had a significant effect on the environment.” The decision to declare the project ‘not significant’ meant that neither the Planning Commission or City Council were required to review or vote on ANY matter regarding this project while on public record. And they didn’t. This 500,000 square foot project, known to most city officials as a ‘big deal’ in July 2018, was NEVER on ANY Planning Commission or City Council meeting agenda and the planning department lead for this project said that he doesn’t recall receiving a single comment about this project from any Planning Commissioner. Amazingly, declaring the project ‘not significant’ doesn’t appear to be the most deceitful or harmful thing that was done in order to allow the Distribution Center to move forward. In Part 2 of this story we are going to look at the Conditional Use Permits that both sites immediately adjacent to the Shoe Palace Distribution Center are required to have and ask what about this project? AN EXCEPTION OR BUSINESS-AS-USUAL ? In researching this story, we were unfortunately not surprised to discover that we aren’t the first group to experience how the City is willing to forgo collaboration, ignore environmental impacts and skirt processes so that developer interests can be green-lighted. At the May 9th, 2017 Planning Commission meeting, a presentation by an executive representing seven companies with 980 employees, nine building sites and 700,000 square feet of operations in the Morgan Hill Ranch Business Park noted that: “it appears the developer continues to use their marketing muscle and political power to bypass approved procedures” and asked “why is the City allowing this to happen and breaking traditional processes to do so”? Developer muscle, political power, and breaking traditional processes have become business-as-usual. ENOUGH IS ENOUGH At this point, we may not be able to stop the Shoe Palace Distribution Center, however we can stop the misguided Morgan Hill Technology Center from being built. How is the Shoe Palace Distribution Center like the proposed Trammel Crow Distribution Center? Our elected officials knew what was being built and made no attempt to engage the community. They kept the Shoe Palace project under the table so they could accelerate approval with no public input and even though we have exposed the ‘Technology Park’ as an even bigger Distribution Center, they will try to sweep this project through to approval if we don’t take matters into our own hands. CALL TO ACTION: If you haven’t gotten involved yet, we hope that after seeing what business-as-usual looks like, you will understand why it is so urgent that you act NOW and join our effort to stop the Trammell Crow Distribution Center deceitfully called the Morgan Hill Technology Center. City Council and other city officials can’t hide behind the familiar 'we can’t talk about this because it might create bias that would prevent us from voting later on'. Join us in attending upcoming City Council meetings looking for answers that no one from the city has been willing to provide so far. [1] Comment Letter from the Laborers International Union of North America, November 19, 2018.


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