February 18, 2005

Sacramento Passes Superstore Ordinance

The Sacramento City Council passed an ordinance to regulate supercenters, but Wal-Mart plans to fight back:

Members of the Sacramento City Council said they anticipated a rough night Tuesday when they considered a controversial superstore ordinance. Still, no one was prepared for what they encountered when they walked into their chambers that evening.

Wal-Mart, leading the opposition against the proposal, had a court reporter stationed next to the dais to record every word. Each council member got a letter from the corporation's attorney, warning that the ordinance specifically targets Wal-Mart and "violates numerous federal, state and local laws, and is discriminatory and unfair."

Councilman Rob Fong, an attorney, said the corporation's message was clear.

"Those two things combined would indicate to me that one of the things coming down the pike is some sort of legal challenge," Fong said. "If that happens, it wouldn't surprise me."

The ordinance isn't as restrictive as some other cities have passed; it only covers stores larger than 90,000sf with 20% of floor space dedicated to nontaxable items rather than the typical 5%. Where Wal-Mart may have leg to stand up on is that it exempts membership and bulk stores. This seemingly benefits Costco while discrimanting against Wal-Mart.

The ordinance requires an economic impact study, but what the city is supposed to do with it isn't mentioned. As an example, I did find an economic impact report done for Bozeman, MT.

Perhaps a more important item in the story than the ordinance is this:

When Bakersfield approved two Supercenter sites within four miles of each other, a citizens group sued the city for underestimating what the group characterized as the urban decay, traffic and air problems that would result.

In that case, the 5th District Court of Appeal recently published a decision that could shape the way California municipalities prepare environmental reports, attorneys said.

"The court ruled that urban decay is an environmental impact as serious as air and water quality," said Steven Herum, the Stockton lawyer representing Bakersfield Citizens for Reasonable Growth.

Herum said he may file a similar lawsuit against the city of Lodi, which approved a Wal-Mart Supercenter on Wednesday.

Bakersfield City Attorney Virginia Gennaro said the court ruling sets a precedent in the 5th District, and city attorneys throughout the state should "give it some weight.

I think its safe to say that this opens up a can of worms. An unoccupied shopping center may be a form of urban decay, but to compare it to water or air quality is a stretch. It merely gives Wal-Mart's opponents another means to block a store. Nobody who can hire a lawyer should be allowed to go out of business because of Wal-Mart lest their building go unoccupied. I should mention that this a result of a specific statute on the books here in CA that requires an environmental impact report which is then used by whatever's proposed to sue. I don't think many things get built in this state without a lawsuit by either side(or at least a threat of one).

Update: The Sacaramento Bee ran a story this morning talking to some Wal_mart supporters and about the project where a store is proposed. It should be noted that Wal-Mart has won public votes in the region.

Posted by Bob on February, 18 2005 at 10:13 PM