A Superior Court Judge in Stanislaus County has affirmed a size cap ordinance in the city of Turlock that officials used to stop a Wal-Mart supercenter from construction. Wal-Mart had challenged the city ordinance, arguing that the city was trying to interfere with competition. But the judge ruld that the city’s goals — to lessen congestion in the streets and protect neighborhood retailers — were “reasonably related to the public welfare.” This ruling was issued in December. Turlock Mayor Curt Andre told the Modesto Bee that the judge’s ruling was “very encouraging… This is about being able to be responsive to the voters and the values of the community.” Wal-Mart had appealed the city’s rejection back in February of 2004, when the city council passed the ordinance unanimously. Wal-Mart repeated its concern that the ordinance “will limit consumer choice.” Wal-Mart also filed a lawsuit in federal court of a similar nature, claiming that the ban violated Wal-Mart’s right to conduct commerce under the U.S. Constitution. Ironically, Wal-Mart already has a 125,000 s.f. discount store in Turlock, which has been in the city for 12 years. The company decided it wanted to add roughly 100,000 s.f. to expand that store into a supercenter. Opponents of the expansion said that the supercenter would cause other existing merchants to close, creating empty stores, and potentially blighted properties. The Turlock ordinance bans most new or expanding discount stores that exceed 100,000 square feet and devote at least 5 percent of the space to groceries and other nontaxable items. The ordinance exempts membership stores, such as Costco, on the grounds that warehouse club shoppers shop less often and create less car trips. Wal-Mart claimed that the Turlock ordinance singled them out, and violated state law by using zoning to regulate business competition. The judge noted that the ordinance will affect retail competition, but added that city officials had “a legitimate concern for blight, traffic congestion and its resulting air pollution…The fact that the ordinance does or will have an incidental effect on competition is irrelevant so long as there is otherwise a valid purpose in enacting the ordinance,” the judge wrote. Wal-Mart tried to claim that the ban forces residents to make multiple trips for groceries and other items, thus generating more car trips and air pollution than if they went to a one-stop-shopping center. Wal-Mart also argued that the city needed to conduct environmental studies on the impact before passing a ban. The city countered that the ordinance was simply a way to carry out land-use policies outlined in the Turlock general plan, which had its own environmental review. The Wal-Mart lawsuit so far has cost the city $130,000 in legal bills.
The courts have ruled that regulating competition through zoning is illegal, but passing ordinances which may have some effect on competition, yet fulfill a valid zoning purpose, such as limiting traffic, preventing blight, promoting the health, safety and welfare of residents, is an appropriate use of local police powers. It is important for communities to state the public purposes of their ordinances when enacting them, such as maintaining an appropriate scale to the built environment, supporting the comprehensive land use plan goals of making commerical uses compatible with surrounding residential properties, or keeping the feeling of neighborhood residential areas intact, preventing the abandonment of buildings, etc. This is an important defeat for Wal-Mart in the courts, but this case is not over until all appeals are exhausted. An ordinance that simply caps the size of retail buildings is even easier to defend than the Turlock ordinance. For earlier stories on size limits, search Newsflash by “cap”. In Lower Gwynned, Pennsylvania, there was a case several years back in which Home Depot tried to challenge a “cap” ordinance. The court said the cap did not prevent Home Depot or any of its competitors from setting up shop in Lower Gwynned — just restricted how big such stores could be. The same can be said for Turlock. Wal-Mart has built 99,000 s.f supercenters elsewhere, and could convert its existing store in Turlock into a supercenter, but it chooses not to. That is a company decision, not a city concern. See “Lower Gwynned” for the earlier case.
