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.” The Salinas City Council will vote on the proposed big box size ordinance on March 3rd. As drafted, Lutes’ ordinance would cap the size of retail stores at 100,000 s.f. if they dedicate more than 5% of floor space to non-taxable food items. A number of California cities and towns have alread adopted a 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 plans to remodel its existing store, and open the second site at the Harden Ranch Plaza, operating two stores within several miles of one another. A Wal-Mart spokesman tried to dodge the issue of whether or not the proposed ordinance would limit the company’s plans, saying they haven’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 would clearly affect the company, which has not yet filed any plans. But Wal-Mart did say 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 around, Lutes hopes to win 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.”
But Councilwoman Lutes sees a bigger disaster if Wal-Mart opens. The local grocery worker unions have warned city officials what will happen in Salinas if the Lutes’ ordinance is not passed. “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. But the owner of a small retail store in the mall called Pet Fun told the Monterey County Weekly, “I can’t get any customers there, so if there is a full parking lot with customers I have a great chance at being competitive.” Salinas Mayor Dennis Donohue has said he is likely to oppose the ordinance because he supports expanding the city’s tax base. Like many Mayors, the Mayor of Salinas is economically illiterate. The Mayor says Lutes’ proposal would send the wrong message to large stores who might have thoughts of opening up in Salinas. Wal-Mart continues its mantra against the ordinance because it says it will limit where customers can shop. “Shopping Choice” is all that Wal-Mart can come up with, despite the fact that the “right to shop” is found nowhere in the U.S. Constitution. Salinas shoppers who are addicted to Chinese imports already have a Wal-Mart in the city, and several other Wal-Mart locations nearby. Readers are urged to email Salinas Mayor Dennis Donohue at [email protected] with the following message: “Dear Mayor Donohue, You are a local agricultural businessman. You know what’s is like to watch large chains gobble up the smaller merchants. The big box ordinance coming before the City Council 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 100,000s.f. They 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. If you let developers continue to build, and then abandon their buildings, as Home Depot did, you will just end up with more and more ‘ghost boxes’ to fill. The bigger the box, the harder they are to fill. Have your planners ask any city in California that has passed a size cap if they regret it now. Their answer should speak louder than any legal threats from Wal-Mart. It’s not how big you grow in Salinas — it’s how you grow big.”