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Tuesday, May 23, 2006 | Snow tires and snow peas. Pudding cans and paint cans. Olive oil and Pennzoil. Promise rings and Promise margarine. “Philadelphia” – the cream cheese and the 1993 feature film’s DVD.
All of these items could land in your shopping cart at a Wal-Mart Supercenter.
But, if a proposal working its way through City Hall is approved, all those goodies might not be available under one roof within San Diego’s city limits. The City Council will likely consider this summer a plan that would block the so-called “big-box” grocery and retail emporiums, known as superstores, from setting up shop in the city of San Diego.
The big-box ordinance that began plodding through the city’s legislative process four years ago might be on its way to an upcoming council meeting, but placing restrictions on retail giants and union foes such as Wal-Mart and Target is an endeavor with substantial legal and political obstacles.
The debate will likely breakdown into the traditional business-versus-labor conflict that has played out in the local political arena over the past several years, and Wal-Mart and its labor practices have made them a target for union retribution. Council members will undoubtedly be tugged on their shirt sleeves by their business and organized labor constituencies.
Currently, the city reviews the construction of a retail center to determine what type of environmental impact study should accompany it. The proposal would also measure how much of the business’s profits were derived from grocery sales, a clause that would effectively ban 100,000-square-foot superstores if they met that threshold.
Those impacted by the proposal argue that economic issues need to be separated out from land use documents.
“It’s a strange way of developing laws about who should or should not be in business, bearing in mind this is a land-use matter,” said James Milch, a local attorney and lobbyist who represents Wal-Mart.
Advocates for the ordinance – mostly labor, urban planning and small business groups – say the two are inherently enmeshed.
“If you’re selling everything to everybody in one place, you need to discuss those impacts,” said Art Castaneres, a lobbyist for the Joint Labor-Management Committee, the organization proposing the ordinance.
Cities as big as Los Angeles and as small as Easton, Md., have passed big-box restrictions. Smaller towns tend to use the ordinances to allow their Main Street retailers an advantage, while bigger cities use them to leverage wage and benefit requirements. In San Diego, it appears that advocates of the ordinance are lining up from a range of constituencies, but are pushing the traffic impacts of the superstores as being the primary concern.
Additionally, Wal-Mart’s legal battles with other cities that have enacted big-box restrictions continue to play out in courtrooms across the state, and San Diego officials are watching those conflicts develop before taking up an ordinance of their own.
The ordinance’s backers approached the city several years ago with a proposal to ban the super-duper-markets, which combine the functions of a standard discount retailer and a full-service grocer, arguing that the stores negatively impact the surrounding community’s traffic and the entire region’s economy.
The group argues that the low prices and wide variety found at Wal-Mart Supercenters and SuperTargets will actually create too much business. Castaneres said building a superstore in the middle of San Diego is much more detrimental than locating one on the fringe of a suburb because the estimated 15,000 automobiles that travel to and from a superstore daily will create too much congestion in an already-cramped urban landscape.
“Imagine the traffic at Sports Arena when there’s a concert – every day,” Castaneres said. “When city planners plan an area, they never contemplated that the people would all go to one place.”
Wal-Mart spokesman Kevin McCall said his company works with local governments wherever a new store opens up to properly plan around the traffic impacts of that area. McCall said it’s in Wal-Mart’s interest to make sure that shopping there is convenient because his company’s success depends on it.
“If it’s a difficult process to get into and out of our stores, we’re not providing our customers with the pleasant shopping experience they want,” he said.
Castaneres said superstores also work off behemoth supply chains and a low-wage workforce that allow them to charge less than mom-and-pop stores and even other chain stores. If the market drives customers from around the region to a superstore location, it will reverse the efforts of city leaders to revitalize older neighborhoods because retailers won’t to open a store just to be undercut.
Milch, the Wal-Mart lawyer, said he thinks Castaneres’ group is trying to legislate against the superstores because his client’s business model threatens the livelihood of chain grocers, which are mainly union shops.
“They would like to shut down non-union shops,” Milch said.
Castanares said that his group’s proposal does not include language requiring big-box operators to pay a certain wage, but admitted that wholesalers like Costco, which draw a significant amount of traffic, are exempted from the ordinance because the employee pay there benefits the community.
“We’re willing to take the impact of traffic there because it’s going to attract so many good jobs there,” Castaneres said. “In [Wal-Mart Supercenter’s] case, you’re trading out good jobs from small businesses for more traffic.”
The ordinance would ban stores that fit three criteria: Those that are over 90,000 square feet in size, sell more than 30,000 types of items, and rack in at least 10 percent of their profits from nontaxable goods, which are usually groceries. Costco is likely to be spared because, as a wholesaler, they don’t carry as many types of items – just many units of a smaller amount of goods. For example, a Wal-Mart Supercenter may have 10 different peanut butter items, with varying brands and sizes, while Costco may have very large containers of just two popular brands.
Fred Sainz, spokesman for Mayor Jerry Sanders, said the mayor opposes the ordinance.
“We think government has no role in arbitrating which businesses are good and which businesses are bad,” Sainz said. The mayor does not have a vote on the council, but supervises the staff that makes a recommendation to the City Council about how to adopt an ordinance.
Before appearing on a council agenda, city officials are also watching Wal-Mart attack the legal basis of several big-box ordinances around the country. Currently, Wal-Mart has appeals pending over similar city laws in the California Supreme Court and a federal appellate court.
The council will meet with City Attorney Mike Aguirre in closed session Tuesday to discuss Wal-Mart’s threat to sue over the proposed ordinance. Wal-Mart notified the city as far back as 2003 that it might challenge a big-box ordinance in court, saying that the proposal illegally protects existing businesses from competition, limits the production of goods, and is an unconstitutional restriction on trade.