Big Box history is repeating itself in San Diego, California — and Wal-Mart is turning on the political pressure to prevent a big box ordinance from passing.
On June 5, 2007, Sprawl-Busters reported that Wal-Mart was threatening a voter referendum on a big box ban in San Diego. Wal-Mart was very displeased with a city ordinance which placed a size cap on retail stores. A series of city council votes, stretching back to November, 2006, had prompted Wal-Mart to threaten city officials that if the size cap ordinance passed, the retailer would gather signatures to try to repeal the measure using the ballot.
In November, 2006, the city council took its first major step towards imposing a cap on the size of retail buildings when it voted 5-3 to ban retail stores of more than 90,000 s.f. that use 10% of their interior space to sell groceries or other merchandise that is not subject to sales tax. This ordinance was modeled on similar ordinances in California — most notably Turlock — where Wal-Mart has failed repeatedly to challenge the law in the courts.
The Mayor of San Diego, Jerry Sanders, told reporters at the time that he would veto the new cap if it went through its required second vote in January. The second reading of the ordinance was delayed from the original January date, so that the public could have time to comment.
San Diego’s ordinance was seen as a pre-emptive strike, since the city currently has no Wal-Mart supercenter. But local sources indicated that Wal-Mart was ready to add several supercenters in San Diego.
In early June, 2007, the city council took its final vote to pass the new ordinance on a 5-3 vote. Mayor Sanders made it clear he would veto it, and to further intimidate the city council, Wal-Mart indicated that they would hire people to gather signatures to put the measure on the ballot in the form of a referendum.
But Wal-Mart’s threat was enough — and a referendum never happened. Instead, when Mayor Sanders vetoed the ordinance in July, 2007, one city councilor, Donna Frye, changed her vote and opposed the ban, and voted with the Mayor. The San Diego Union-Tribune called Frye’s change of heart a “surprise twist.” This made the vote on the override a 4-4 tie, which meant the override did not prevail. Frye told the media she wanted to work on a new version of the law that will require big box stores to study their economic impacts on other businesses. That’s exactly what happened.
“I heard from many, many people that want to have that choice,” Frye told the Union-Tribune, “and I think there’s a way to give people that choice, to hopefully put something in place that also protects small businesses by doing an economic impact report and allowing the communities to have a greater oversight of that process.”
The head of the United Food and Commercial Workers (UFCW) Local 135, said he was shocked when he heard the rumors that Frye was switching sides. He said union members flooded her office with phone calls in protest. “I think she turned her back on working people,” he said. “I think she turned her back on her constituents, and quite frankly I think she proved that she doesn’t have the guts to stand up to the mayor or stand up for her constituents.”
One of Frye’s constituents was quoted by the newspaper as saying, “These things are environmental abominations and you have no idea what you’re giving up by not overturning the veto,” he said. “They have horrible traffic impacts, horrible noise impacts, horrible air quality impacts. They are energy hogs, and they are not compatible with the neighborhood concept this city wants to have.” The head of the San Diego Neighborhood Market Association, which represents 2,000 small businesses in the city, said her group was disappointed by Frye’s decision.
Almost three and a half years later, the city council has once again taken up the big box issue. This time, the city council passed an ordinance to require certain superstores over 90,000 s.f. to conduct an economic impact statement. A ‘superstore’ is one which dedicates more than 10% of its floor space to groceries, prescription drugs, and other nontaxable items. It would not affect home improvement stores or warehouse clubs like Sam’s and Costco.
Such economic impact report ordinances have been adopted in many communities across the country, and is a statutory requirement in states like Maine and Vermont. Most impact ordinances do not distinguish between those carrying groceries, and those which do not.
Two weeks ago, the city council passed the economic impact ordinance, but on November 29, 2010, Mayor Jerry Sanders — the same Mayor who killed the big box ordinance in 2007 — vetoed the economic impact legislation also. “I do not believe it is the City’s role to determine where consumers may shop or to provide a competitive advantage to certain retail businesses,” Sanders said in his veto message.
Councilor Todd Gloria, who is the lead sponsor on the economic impact statement, hopes to pass the ordinance later this week, before two newly-elected councilors take their seats on the board. To override the Mayor’s veto, Gloria needs to round up five votes for the measure. The councilor who switched her vote, Donna Frye, is leaving the board. But the new councilors coming on may tip the balance against the ordinance, so Gloria wants to pass the measure as soon as possible.
The second time around, Wal-Mart is being equally aggressive in their opposition to the ordinance. The retailer took about full page ads in the Union-Tribune newspaper, saying the City Council is just carrying water for the unions, and urging San Diego voters to “be a voice for choice.”
The proposed ordinance actually has nothing to do with shopper choice. What it is really about is scale. In towns and states where such economic impact ordinances exist, they are used as a criteria for granting a special permit for very large projects only. In Greenfield, Massachusetts, for example, the town adopted in 1993 a Major Development Review ordinance that requires developers to produce an fiscal impact report that shows the project’s impact on public revenues. The town can reject a project that does not balance public revenues with public costs. Zoning is not used to regulate competition, or to keep any project out. It focuses on the financial impact on the town, and allows a communityi to say No to a negative financial impact.
Wal-Mart argues that such ordinances make it harder for large stores to win approval, thus denying consumers a shopping choice. But big box retailers under 90,000 s.f. would have no economic impact requirement. 90,000 s.f. is one and a half times the size of a football field — large enough to satisfy anyone’s craving for cheap, Chinese merchandise. So the “choice” is actually Wal-Mart’s: scale your stores at an appropriate size, or do an impact report.
“This ordinance is not a ban, nor is it intended to be one,” Councilor Gloria explained. “Believing that such information and findings would result in a ban demonstrates that even supercenter supporters know of the potentially damaging impacts of such outlets.”
If people in San Diego think this economic impact ordinance was divisive, wait until Wal-Mart submits its first superstore proposal. Readers are urged to email District 3 City Councilor Todd Gloria at [email protected] with this message:
“Dear Councilor Gloria, The economic impact ordinance is not about shopper choice. It’s about Wal-Mart’s choice. They could make their superstores fit San Diego, rather than force San Diego to fit their needs. Wal-Mart could choose to build an 89,000 s.f. superstore. They are proposing superstores at 78,000 s.f. in other parts of the country — why not in San Diego?
Many cities and towns have adopted an economic impact requirements as part of a Major Development Review. Wal-Mart has seen this many other places, and in states like New York, Vermont and Maine — it’s standard practice. If a large retail project is going to have, on balance, a negative net revenue impact on a community, that should be grounds to reject a project. Wal-Mart doesn’t want San Diego to talk about the impact of their stores. But that’s a ‘choice’ the city council can make.
I urge you to get this ordinance passed to make up for the mistake of not overriding the Mayor back in 2007 with the first big box ordinance.”
