The selection of the Lake Yosemite site came after a review of more than 85 sites in the San Joaquin Valley. Finalist sites were in Merced, Madera and Fresno Counties. Among the criteria leading to the final selection were available housing, commercial services and cultural amenities, as well as access to metropolitan areas, community support, availability of water, and an estimation of environmental effects associated with the site. The site proposed in Merced County also had the significant advantage of being owned by the Virginia Smith Trust, which funds higher education scholarships for local high school graduates.
Never underestimate free land!
In any case, an editorial in today's Fresno Bee about UC Merced's enrollment problems talks about how UCM needs to be more fun :)