The Mayor in Salinas, California has lost control over his City Council. The Mayor urged his colleagues on the Council to vote against a proposed big box ordinance that would ban stores 90,000 s.f. or larger that also reserved 5% or more of floor space to non-taxable food items. That describes a Wal-Mart supercenter. Despite the Mayor’s protestations, the City Council on March 3rd voted 5-2 to ban the superstores. In early December, 2008, the media reported that a former Home Depot at the Harden Ranch Plaza in Salinas, California had been sold to Wal-Mart for a reported $8 million. The 130,510 s.f. building had been empty for 4 years until Wal-Mart bought it. The giant retailer already has a discount store in Salinas, but now claims it needs two stores for this city of roughly 144,000 people. Wal-Mart already has a similarly-sized store on North Davis Road in Salinas. They also have a store 8 miles to the west in Marina, California. News of the purchased spurred Wal-Mart opponents into action. Salinas City Councilwoman Jyl Lutes wrote up a city ordinance that could prevent Wal-Mart from building their supercenter at the Harden Ranch Plaza. Lutes told the Monterey County Weekly that she believes the superstore will put a nearby Target and Safeway grocery store out of business. “They don’t have any problem with shutting Safeway down,” Lutes said. “Safeway is a California-based operation. The last thing we need is more California businesses going belly up.” But Lutes’ ordinance has now been adopted. A number of California cities and towns have adopted a similar size cap on superstores — despite well-financed opposition by Wal-Mart. The retailer has gone to court to try to block such ordinances, but the courts have found that size caps are a legal zoning mechanism. According to the County Weekly, Wal-Mart was planning to remodel its existing store, and open the second site at the Harden Ranch Plaza, operating two stores within several miles of one another. But now the City Council has killed that plan. Several days before the vote, a Wal-Mart spokesman tried to dodge the issue of whether or not the proposed ordinance would limit the company’s plans, saying they hadn’t nailed down how much square footage in their proposed new store would be committed to food. But Wal-Mart superstores can have 35% to 45% of their floor space set aside for groceries — so the new ordinance clearly affects the company, which has not yet filed any plans. Wal-Mart claimed that a second store in Salinas would bring 230 jobs and $500,000 in sales tax. “Those type of ordinances are limiting to their retail opportunities,” the Wal-Mart spokesman said. But this is an example of Wal-Math, in which job losses at other merchants are ignored. The net economic impact to Salinas could be negative. A 2003 study by the analyst Retail Forward warned that for every new Wal-Mart superstore that opens, two grocery stores could close. Wal-Mart never discusses the second half of the equation. Councilwoman Lutes brought up this same issue of a big box ordinance in 2004, but the Council was scared away from the issue by Wal-Mart’s lawyers. This time Lutes won the battle. There is no legal impediments for enacting such a zoning limit on the bulk size of a structure, just as there is no limit on the height of buildings. The Harden Ranch Leasing Director told the Weekly that Wal-Mart was the only retailer willing to fill the empty parking lot after a four-year search. Harden Ranch now has an empty Circuit City to fill as well — another casualty they can lay at the feet of Wal-Mart. Now the Leasing Director sounds desperate for a Wal-Mart. “Each day they are not open is a disaster for us.” Based on the City Council’s vote, the Leasing Director has an official disaster on his hands.
According to The Californian newspaper, support for the big box ban came largely from unions. Mayor Dennis Donohue and Councilwoman Janet Barnes opposed the ban. Wal-Mart desperately tried to defeat the ordinance. A senior manager for public affairs gave the City Council cards signed by 2,300 Wal-Mart customers. These cards were printed up by Wal-Mart, and pushed on customers who shopped at the existing Wal-Mart store in Salinas. Wal-Mart sets up a little display table in their store, and asks shoppers to sign the card. But cards don’t win votes, and very few of those 2,300 people would ever leave their homes to go to a City Council meeting for Wal-Mart. This time the retailer’s effort was too little, too late. Wal-Mart called its opponents “a special interest” group pursing a “short-term goal.” Wal-Mart claimed that its existing store in Salinas was “performing far beyond expectation and capacity,” according to The Californian. But Councilwoman Lutes saw a bigger disaster if Wal-Mart opened. The local grocery worker unions warned city officials what would happen in Salinas if the Lutes’ ordinance did not pass. “You bring in a Super Wal-Mart and within 24 hours stores will close down around the area,” said a spokesman for the United Food and Commercial Workers, which has battled Wal-Mart supercenters across California and the nation. The Mayor complained that Lutes’ proposal would send the wrong message to large stores who might have thoughts of opening up in Salinas. Readers are urged to email Salinas Councilor Jyl Lutes at [email protected] with the following message: “Dear Councilor Lutes, Congratulations on the passage of your big box ordinance. Salinas now joins the growing list of communities saying no to sprawl and big box voodoo economics. Your big box ordinance is a legitimate zoning tool to limit the size of superstores. Many California cities and towns have used this kind of ordinance to manage growth. Wal-Mart today is building smaller format stores, including a superstore under 100,000 s.f. The only reason they build these huge stores, is because cities don’t limit their bulk. Wal-Mart has challenged big box limits in the California courts, and lost. They won’t go to court again. They will talk about shopping choices, but Wal-Mart is the end of competition, not the beginning. A national study from 2003 found that for every one Wal-Mart superstore that opens, two grocery stores will close. This hurts shopping choice. Salinas has two choices: lead growth, or follow it. Because of your work, Salinas can now make big box stores fit into your community — rather than the reverse.”