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Greenbelt Alliance In the News

October 13, 2003

Wal-Mart aims to roll back ban

Voters will have opportunity to repeal or support ordinance

Come March 2, Contra Costa County voters will be among the first in the country to decide whether to allow super centers, overturning a county ordinance that prevents the giant discount markets in unincorporated areas.

Sprawling across three to six times the floor space of typical grocery stores, Wal-Mart Stores Inc.'s brand of Supercenters will arrive in California next year. They are the discount giant's answer to grocery shopping melded with their range of other wares from shirts to towels and toys.

County supervisors passed an ordinance in June that bans Wal-Mart and other so-called big-box retail stores exceeding 90,000 square feet from selling groceries and other nontaxable goods on more than 5 percent of their floor space. An initiative to overturn the ban, sponsored by Wal-Mart, was placed on the ballot Oct. 7 .

If it fails, observers say the vote could bolster similar big-box restrictions being debated in Oakland and elsewhere in California.

"I would say it would be an interesting message if a fairly affluent county like Contra Costa sent Wal-Mart packing, because I think it is a place that represents their customer base," said retail location strategist Larry Kosmont, president of Kosmont Co's, Los Angeles.

Kosmont said the election's result could forecast the future of stores across the state that pack vegetables and cereal alongside the regular line of discount merchandise. Its defeat could make Wal-Mart rethink its Supercenter entrance into California.

Supercenters already speckle 43 other states. A Wal-Mart announcement earlier this year outlining plans to open 40 of the markets in California over the next four years sparked debate about the place of giant chain stores in several Bay Area communities. The first Supercenter is on schedule to open this spring in La Quinta in Riverside County.

Contra Costa County officials point to the typical locations of the stores and like businesses on the outskirts of towns. Because customers drive from farther away, roads get more use. And those that specialize in food generate less tax revenue per square foot than stores selling solely taxable goods.

So the centers don't pan out financially, Contra Costa supervisors say.

If voters reject the supervisors' ban, Wal-Mart, Kosmont said, might see it as a green light from consumers.

Wal-Mart is gearing up to for a fierce campaign. Super center opponents -- from local officials wary of building at the county's urban periphery to labor union opponents of Wal-Mart -- are mounting a challenge.

"Depending on how the vote plays out, I think it could have a very significant effect on how Wal-Mart decides it's going to roll out the rest of these stores," Kosmont said. "If voters uphold the ban on super centers, Wal-Mart may have to reconsider what their strategy is. And I think that is what their opponents are hoping for."

Groups from the United Food & Commercial Workers Union to the Greenbelt Alliance and the National Organization for Women have taken positions supporting Contra Costa's ordinance.

Pinole Mayor Maria Alegria said some groups will meet as early as this week to organize against what they call the sprawling nature of super centers that reduce wages and tax bases, snuff out downtowns and clog traffic. Alegria is executive director of FaithWorks, an alliance between union and religious groups.

Since 1988, Wal-Mart Supercenters have been popping up across the country, and now number 1,300. Only about three dozen cities and counties have ordinances limiting the size and scope of the stores -- and few, if any, have actually gone to the ballot box, said Al Norman. He operates a Web site, sprawl-busters.com, that tracks the fight against Wal-Mart across the country.

"I call them the Great American Dust Machine. They grind through the middle class of any community and help destroy the backbone of any small town. Once the small merchants are gone, they don't come back. And those merchants are the only thing that keeps Wal-Mart's prices competitive," said Norman, who has helped a number of anti-big-box campaigns across the country during the past decade.

The bans that are in place amount to corporate protection for major grocery chains, counters Amy Hill, Wal-Mart's public affairs manager for the Western Region.

"I believe special interest groups, particularly the food workers union, has a larger agenda to prevent Wal-Mart stores from bringing Supercenters to California, and Contra Costa is part of their plan to prevent our growth," she said.

"I think that our customers really appreciate the one-stop shopping where they can purchase a myriad of items right under one roof. They can combine what would take a day's worth of driving from errand to errand."

If so, it's at the cost of reducing wages for local residents, said Mike Daley, conservation director for the Sierra Club's Bay Area chapter.

"Livable wages are very much an environmental issue because if you can't afford to live 20 miles from where you work, then that becomes a transportation issue. You have people who work in the Bay Area and live in Fairfield and Vacaville," Daley said.

That view is shared by the United Food Workers Union Local 1179 in Contra Costa County, said President Barbara Carpenter. But she said the union was far from "behind the whole thing."

Daley cited a 1999 study by the Orange County Business Council that estimated Southern California alone could take a $2.8 billion yearly hit if super centers made an aggressive entrance into the market there. The loss stemmed from lower wages paid at discount companies such as Wal-Mart, and fewer benefits.

"When people are making low wages and don't have health benefits, that creates a burden on our already strained health care system," Pinole's Alegria said. "You get employers that don't provide benefits and then their employees rely on the public health system."

Wal-Mart maintains it was never contacted for wage information and Hill said the Orange County study -- conducted by the University of California -- was biased toward labor.

Because a pending lawsuit by six California women accuses Wal-Mart of wage and promotion discrimination, the National Organization for Women can't support Supercenters, California area Executive Director Helen Grieco said.

"I think you will hear a lot of people talk about more global issues -- health care for employees, for example. For me, as a former planning commissioner and land use official, this is a land use decision and a transportation decision and I think it is a good ordinance," said Supervisor Chairman Mark DeSaulnier, one of the ban's sponsors. "I think big corporations can make money under this ordinance. They are right now and they will continue to."

Contra Costa's code passed in a 3-0 vote by supervisors on June 3. In unincorporated parts of the county, it puts a 90,000-square-foot limit on all retail stores where 5 percent or more floor space displays groceries or other nontaxable goods such as pharmaceuticals. The average large grocery store is about45,000 square feet.

The ban doesn't apply to membership clubs such as Costco, which county planners say don't generate as much traffic. But it effectually rules out a Wal-Mart Supercenter.

"It is a direct attack on our business. We have to preserve customer choice," said Hill of Wal-Mart. So the company will appeal to its customers -- the voters, Hill said. "We don't have a specific campaign in place yet, but I think it will encompass many of the traditional campaign strategies, including direct mail."

Within a week of the ban's passage, Wal-Mart started the drive to overturn it. Wal-Mart spent $100,000 gathering signatures for the referendum.

"Wal-Mart always wants to say that this is about Wal-Mart. And I want to make clear this is not about Wal-Mart. This is about the county controlling land use in the unincorporated areas," said the ban's other sponsor, Supervisor John Gioia of Richmond.

"In this case, we want to make sure we recover tax revenue from large-scale retail stores that impose traffic and burden our roads. You don't get tax revenue from a supermarket. And from looking at where these are located, big-box retail stores tend to be built on the outskirts of a city. We are talking about larger traffic volume and increased traffic on our roads."

Wal-Mart hasn't proposed a Supercenter in Contra Costa County. But if it did, opponents speculate it would probably be in the unincorporated outskirts, like Supercenters in some other communities. The company needs about 15 acres to build one.

"In some areas, we tend to build where there is residential growth. Nine times out of 10, the residents come first and we are just bringing our stores to that growth," Hill said. "In a place like Contra Costa, where land is scarce, we look for infill."

An incoming Wal-Mart at the Hilltop Mall in Richmond couldn't be expanded into a Supercenter. And it is unclear, Hill said, whether Wal-Mart would ever create Supercenters at the existing stores in Pittsburg, Martinez and Antioch.

The Martinez City Council enacted restrictions a year ago similar to the county ordinance, so an expansion there is unlikely.

There is talk in Pinole too, about a possible ban, Alegria said.

Since 1998, local laws restricting the size of big-box retail have popped up in different parts of the state. There was discussion in Tracy about possible restrictions at one point, but a grass-roots effort never took off. Wal-Mart is considering bringing a Supercenter to that city.

The California Legislature passed a ban similar to Contra Costa's in 1999. But it was vetoed by Gov. Gray Davis after heavy lobbying from both labor unions and Wal-Mart.

Two local bans have also been rescinded. In Calexico at the Mexican border, and in Inglewood in Los Angeles County, city councils opted to repeal their bans rather than face Wal-Mart at the ballot box.

Where communities defend them, restrictions appear to survive legal challenges. An Arizona Superior Court upheld limits in Tucson on retail outlets100,000 square feet or larger selling nontaxable goods on more than 10,000 square feet.

"I think this ruling is very important to Contra Costa because the judge ruled that an ordinance very similar to Contra Costa's was constitutional," Norman said. The judge ruled Wal-Mart didn't have a standing in the case because it hadn't filed an application yet. "So to some degree, the court left the door open for a challenge in the future."

Wal-Mart isn't planning to get to that point in Contra Costa, Hill said.

"We do not believe we will not succeed. We believe the voters will vote to repeal this ordinance, and I think that will send a message to other communities in Contra Costa that people don't support ordinances like these," she said.

"It's kind of an un-American principle in a way to have a legitimate business comply with zoning and get booted out," retail strategist Kosmont said. "I guess the constituents will have to decide whether it is more un-American to take away land use than it is to provide low-paying jobs."

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