Even as Wal-Mart referendum votes are being taken in several California cities today, more new ordinances limiting these stores are being planned. Efforts to restrict the growth of big box retailers are spreading like a California brush fire. The Sacramento Business Journal reports that the state’s capital is the latest community to take up the anti-Wal-Mart battle. City councilors in Sacramento and West Sacramento will consider ordinance changes that ban big-box retailers that also sell groceries. West Sacramento City Councilman Mark Montemayor said the new ordinance would protect businesses willing to take a chance in West Sacramento from being hurt by the arrival of a giant retailer, according to the Business Journal. In Sacramento, City Councilwoman Sandy Sheedy said when smaller stores are pushed out of business by the large chains, it can result in blighted property. Sheedy told the Journal big box stores are “too big for an urban setting.” One of the largest employers in the Sacramento area is Raley’s, a grocery chain employing 7,340 local workers, according to the Journal. Unionized grocery workers in California make $17.90 per hour after two years, while Wal-Mart workers earn about half that amount. The West Sacramento ordinance would ban new stores and expansions of more than 130,000 square feet if they had more than 5,000 linear feet of shelf space and more than 5 percent or 10 percent of its gross sales revenues came from nontaxable grocery items. The ordinance would not apply to membership warehouse clubs such as Costco or Sam’s Club. “The proposed ordinance is not meant to turn away potential commercial business recruitment,” Montemayor said. “Instead, the ordinance limits some predatory business practices.” The Sacramento ordinance would ban stores larger than 100,000 square feet with between 5 percent and 10 percent of nontaxable sales items. Wal-Mart has vowed to fight all such ordinances. The retailer is suing the city of Turlock and Alameda County. Wal-Mart is the subject of voter referendums today in Contra Costa County and San Marcos. The cities of Oakland and Martinez also have big box bans in effect that have not been challenged. In southern California, the cities of Calexico and Inglewood repealed their ordinances after Wal-Mart threatened to put the measure on a ballot referendum for the voters. So the giant retailer now finds itself surrounded by the raging fires of anti-Wal-Mart sentiment. Trying to low-key the opposition, a Wal-Mart public relations worker responded, “This is just a handful of locations.” In each case, the opposition takes what would have normally been a three or four month process, and turns it into a two or three year delay. Every year that a Wal-Mart supercenter is delayed, the company loses about $100 million in sales at that location.
These California-style ordinances would be stronger if communities simply passed a size cap on buildings, and placed a limit on the square footage of any retailer. There is no compelling reason to eliminate the impact of these ordinances on warehouse clubs, or home improvement stores, for example. If the idea is to prevent traffic congestion, and maintain the character of the town, then these ordinances should apply to big boxes like Home Depot and Lowe’s as well. An ordinance can survive legally if it is based on solid zoning issues. Simply trying to shape competition is a legally weak argument. Instead, city councilors need to talk about maintaining the scale of the built environment, keeping land uses of similar density, and managing the intensity of land use. Wal-Mart has never won a court battle against a straightforward cap on building size. A 60,000 s.f. cap, for example, with a 30,000 s.f. limit on any one floor, creates more green space on a parcel, and is not easily challenged in court. Wal-Mart says the California anti-big box sentiment is having no effect on their plans, but community groups know better.