Industrial Developers Threaten Lawsuit Over South Fresno Rezoning Plan

Two industrial development firms warned the City of Fresno they would pursue litigation if the city continued with its Southeast Central Specific Plan, triggering a council postponement, a sharp rebuke from Councilmember Miguel Arias, and fresh scrutiny of a yearslong fight over the future of south Fresno's neighborhoods.

Pac West Industrial Equities and Span Development LLC, the applicants behind a proposal to rezone roughly 50 acres along Elm Avenue from mixed-use residential to industrial, submitted a letter on March 13 requesting a 90 to 120-day delay of both the Elm Avenue Rezone and the broader Southeast Central Specific Plan. The firms argued the city's planning effort was flawed and that the area was better suited for industrial use given the density of neighboring facilities. "If the city proceeds as currently planned, the information the city will place in its agenda is incorrect and incomplete," the letter read. "Once the data is correct and the review is completed, the city and public can consider all of the proposed lane use actions together."

The applicants also invoked the city's fiscal pressures, writing that "the landowners, who inject a significant amount of property tax, income tax, and sales tax revenue into the city — a city in the midst of a budget crisis — do want to stay there. And their operations are significantly cleaner than comparable and nearby land uses."

The litigation threat gained immediate traction inside City Hall. Attorney John Kinsey, a north Fresno lawyer representing the development group, sent an email to the council that arrived three minutes after the start of a Thursday meeting. The email challenged the Southeast Central Specific Plan's exclusion of a particular property from its environmental analysis and alleged that Elm Avenue rezone landowners had paid the city to conduct that analysis despite the property lying outside the rezone area. Council President Mike Karbassi responded by moving to postpone the hearing to March. "I don't feel comfortable moving forward without legally considering the legal risk here, and then I don't want to say anything on record without knowing the legal analysis that could jeopardize that," Karbassi said.

Arias rejected the procedural maneuver outright. "While the city ordinance allows applicants to delay their own project by withdrawing it from consideration, it does not allow an applicant to delay an unrelated city planning effort," he wrote. His objections went further. Arias alleged a coordinated effort inside City Hall to attach housing provisions to the Southeast Central Specific Plan specifically to clear procedural barriers blocking approval of the Elm Avenue rezone. "This, what we're about to do today, smells really bad," he said. "This is dirty, and I can only tie it to folks who are actively trying to fundraise from industrial developers for political reasons on why this is taking place." Arias announced a press conference at Fresno City Hall on Wednesday at 9 a.m., alongside affected communities, to address what he called misinformation surrounding the Elm Avenue Rezone.

The dispute sits atop a much larger planning question. The city is currently determining how thousands of acres between Elm Avenue and Highway 99, bounded by North and Central avenues, will be zoned going forward, with industrial use among the options under consideration.

South Fresno residents have not waited for that process to conclude. The South Fresno Community Alliance filed a petition in Fresno Superior Court in late October, challenging the environmental impact report the city certified for its general plan. Leadership Counsel Directing Attorney Ashley Werner said the report failed to capture what residents already experience. "Residents in south Fresno are exposed to severe air pollution and sound, vibration, aesthetic and traffic impacts as a result of all of this industrial growth encircling homes and their school," Werner said. "But the environmental impact report fails to acknowledge those impacts on residents."

South-central Fresno resident Panfilo Cerrillo put the stakes more directly at a community gathering Monday night. "We are people too. We do not want all of these factories in our backyards." Cerrillo asked those assembled: "Would anybody here want factories and trucks and trailers going in and out right next door to your school?"

The neighborhood already hosts warehouse and distribution operations for companies including Ulta, Amazon, and Foster Farms. Some industrial businesses in the corridor have operated under industrial zoning designations for more than 50 years, and the city's general plan has historically designated the area between Jenson and American avenues for both light and heavy industrial purposes. The Elm Avenue site itself was zoned mixed-use when the Southwest Specific Plan was adopted in 2017, though it has continued to function as industrial and warehousing property.

A court hearing on the South Fresno Community Alliance's petition is expected to be scheduled later this year. The group said it hopes to reach a resolution with the city before that date.