The Morning Report
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Tuesday, Sept. 19, 2006 | San Diego City Council members continued to chart a course for regulating so-called big-box stores on Monday, but will not decide until October at the earliest whether controversial Wal-Mart Supercenters can do business within the city limits.
After listening to a nearly two-hour parade of public speakers – whose testimony mirrored the heated national debate surrounding the community impacts of Wal-Mart and other big-box retailers – council members took no formal action. Instead, they pushed off a final decision for at least a month.
For nearly a decade the city has been contemplating how to best accommodate businesses such as Home Depot, Costco and Wal-Mart, which have been known to set up shop in facilities of more than 100,000 square feet, and the council appears nearly split on the types of restrictions it will enforce on the retailers.
The council seems poised to adopt Mayor Jerry Sanders’ recommendations to require large-scale retail centers to undergo a more stringent public review process and to include heightened landscape and urban design features, such as more trees and wider sidewalks. However, a longstanding proposal to go further and ban the biggest of the big – warehouse-sized stores that sell groceries such as Wal-Mart Supercenters – has drawn distinct partisan lines among the council members.
On Monday, the council unanimously supported pressing forward with Sanders’ recommendations. But it will also consider placing a limit on a store’s size and ability to sell groceries after five of the eight council members said they supported revisiting the restrictions as early as Oct. 23.
The latter proposal, known as the “SKU ordinance,” would ban a store that fit three criteria: If it is more than 90,000 square feet in size, sells more than 30,000 types of items, and generates at least 10 percent of its profits from nontaxable goods, which are usually groceries.
If enacted, the legislation would likely only affect “superstores” such as Wal-Mart Supercenters and SuperTarget, which sell groceries under the same roof as hardware, sporting goods, auto supplies and clothing, to name just a few of the departments.
A large store such as 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. Other big-box retailers such as IKEA and The Home Depot don’t sell enough grocery items.
Supporters of the SKU ordinance said the combination of the quantity and type of items that are sold in a large facility will have negative impacts on the community’s traffic, air pollution and economy. They said the concentration of every item from Quaker Oats to Quaker State motor oil will attract too many people to that store, which will congest that neighborhood while drawing commerce away from the small businesses around town.
“If you think community centers are struggling now, wait until we get superstores,” said Richard Kurylo of the Business Improvement District Council.
Several Wal-Mart shoppers testified that the store’s cut-rate prices helped them save money and workers lined up to speak about the perks of working at the world’s largest retailer.
“This will discriminate against guys like me who want to be the next Wal-Mart,” said Adam Colton, the chief financial officer at Mad Dog Multimedia.
One Wal-Mart supporter said he didn’t want the council restriction because it could affect his career, even though he wasn’t an employee. The company’s spokesman proudly exclaimed that he thinks Wal-Mart is “good for America.”
The company has taken heat for providing low wage-and-benefit packages to its employees and been accused of union-busting.
Still, a council majority supported moving forward with the SKU legislation, which stands for shop-keeping unit, a measurement tracking the types of items in a store.
Council President Scott Peters and Councilmembers Toni Atkins, Tony Young, Donna Frye and Ben Hueso – the council Democrats – asked for the city’s staff to draw up a SKU ordinance in addition to the mayor’s suggestions. The council’s Republicans, Councilmen Kevin Faulconer, Brian Maienschein and Jim Madaffer, said they opposed it.
Tom Turner, an attorney for Wal-Mart, said the SKU ordinance was probably illegal because it unfairly limited trade, abused zoning laws and discriminated against his company. He said the proposal was an attempt to use a land-use policy to favor certain social groups, such as labor unions and the union grocery stores such as Vons and Albertsons, who have historically opposed Wal-Mart’s low payroll overhead.
“This is a wolf in sheep’s clothing,” he said.
SKU supporters said the issue boiled down to a quality-of-life issue.
“We shouldn’t let Wal-Mart dictate the way we raise our families,” Hueso said after espousing his criticisms of locating commerce in one spot. “We have it within ourselves to make the communities we want to live in.”