Zoning ordinances which place dimensional limits on the size of stores won a major victory — for the second time — in the same California community. On February 19, 2005, Sprawl-Busters reported that Wal-Mart had appealed a Superior court decision that upheld the city of Turlock, California’s ban against supercenters. The Turlock zoning code bans retail stores larger than 100,000 s.f. which devote more than 5% of its interior square footage to nontaxable items, like food. The City Council said the purpose or the ordinance was to preserve neighborhood shopping centers, anchored by local supermarkets. The appeals court decision said the city acted with a legal purpose, even if its action had an anti-competitive impact. “While zoning ordinances may not legitimately be used to control economic competition, they may be used to address the urban/suburban decay that can be its effect,” said the court in a unanimous 3-0 ruling. At the time of their legal appeal, a Wal-Mart spokesman said, “We felt that there were more merits to the case and we are looking forward to how the appellate court will rule on the case.” Well, Wal-Mart is going to have to look forward to something else now, because The San Francisco Chronicle reports today that a state appeals court has upheld the city in its battle to determine its own zoning code. The court ruling upholds a 2004 Turlock ordinance, noting that the city legitimately used its police power to “control and organize development within its boundaries.” The court also rejected Wal-Mart’s argument that the city had failed to fully review the environmental effect of banning huge one-stop stores, which Wal-Mart said would lead to a proliferation of smaller outlets, which in turn would lead to increased traffic and pollution. The court said Wal-Mart arguments were speculative and could be addressed if such stores were ever proposed. The case marks the first ruling by a California appellate court on the issue of size caps, but a very specific size cap that impacts only certain big box superstores. “The decision will help provide a template for other communities which are considering regulating discount superstores,” said the city of Turlock’s attorney. But a Wal-Mart spokesman criticized the city’s opposition to his company, saying it was “unfortunate, because it goes against customer demand.” Wal-Mart tried to assert that stopping superstores “weakens the state’s environmental statutes” and hurts the environment because Wal-Mart allows customers to make fewer trips to buy what they need. Wal-Mart still has two options to play in Turlock: they can continue to waste taxpayer’s money by appealing this decision, and they have a live federal court appeal which charges the Turlock ordinance unconstitutionally discriminates against one type of store and interferes with interstate commerce. Wal-Mart admitted that as many as 20 cities and counties in Northern California have passed ordinances seeking to limit or block the stores. San Francisco, Oakland and Martinez have measures excluding big box stores. Wal-Mart beat back one cap ordinance by spending more than $1 million in a referendum in Contra Costa County in April of 2004. Alameda County supervisors passed a new measure last month that mandates an economic impact study of big box stores on the local economy and requires applicants to provide details of employees’ pay and benefits.
This is a major legal loss for Wal-Mart, because the Turlock ordinance is more narrowly focused than many basic size cap laws. In most communities, size caps apply to all big box stores. The Turlock ordinance only applied to superstores which include a full-line grocery component. That means that stores like Home Depot, Lowe’s, Costco and others would not be affected by the Turlock size limit. So even in an ordinance that narrowly limited the type of store being restricted, the court maintained the long-held position that cities and towns have a legitimate public purpose in regulating the size of projects within their borders. Because big box stores bring with them adverse impacts like traffic, crime, and environmental degradation, cities and towns can pass limits to protect the health, safety and welfare of local residents. It is convoluted to argue that a Wal-Mart bringing in 8,000 new car trips a day, is good for the environment — but the courts did not buy it. This court case confirms once again that size caps — even narrowly written — are legitimate uses of the zoning code, and whatever impact such codes have on competition is not the issue. If a public purpose, such as protecting the character and plan of development of a community is at stake, a community can adopt a code to prevent such adverse impacts, and even a company as litigious as Wal-Mart cannot trample on those local police powers. Search Newsflash by “Turlock” for earlier stories.
