Wednesday, July 11, 2007 | After appearing destined for the ballot box, San Diego’s ban on big-box grocers appears dead after Councilwoman Donna Frye changed course on the divisive proposal Tuesday.

At a meeting where the council was expected to override Mayor Jerry Sanders’ veto on the law, which would have barred gigantic grocery-and-retail hybrid stores such as Wal-Mart Supercenters from operating in the city limits, Frye decided to vote to let the veto stand.

Change of Heart

  • The Issue: The City Council had voted to ban Wal-Mart Supercenters and was prepared to override the mayor’s veto of that ban. But City Councilwoman Donna Frye changed her mind before the vote, upholding the mayor’s veto.
  • What It Means: Wal-Mart and its supporters had planned to mount a referendum to challenge the City Council’s action but Frye’s change of heart made that effort unnecessary.
  • The Bigger Picture: Frye, saying she wanted to avoid the divisive debate about an outright ban of the superstores, said she thought the community could better challenge them as each project emerged one by one. She proposed that developers hoping to build the stores be forced include studies of their economic impact.

The move effectively killed both the contentious proposal that had been navigating its way through the legislative process since 2003 as well as the likelihood of a heated voter referendum that Wal-Mart pledged to hold next year.

Frye, who provided one of the five votes needed to approve the ban when it came before the council in June and last November, said she wanted to end a controversy that became more heated than it was worth. The debate over the ban drew the scorn of business leaders, conservative talk-radio and newspaper commentators, and Wal-Mart, which had been advertising at great expense against the regulations.

“It will stop the negative campaign being waged right now,” Frye said.

The councilwoman said she thought an alternative set of restrictions, modeled after those in place in Los Angeles, would sufficiently address her concerns. The so-called “superstores” could be curbed without attracting the sharp criticism that accompanied the blanket ban proposed for San Diego, she said.

“I haven’t changed my mind about superstores, I’ve changed my mind about how to do it,” she said.

Under Frye’s proposal, which the City Attorney’s Office agreed to begin studying, each superstore could be judged by the city individually. The development of a 90,000-square-foot store that uses 10 percent of its floor space for grocery sales would be subject to a lengthier and more rigorous public review than is currently allowed. In addition, an analysis of the superstore’s economic impact on the community — measuring indicators such as its effects on small businesses, employee wages and public infrastructure — would also have to be conducted.

That would make San Diego’s requirements similar to the city of Los Angeles’.

Under current San Diego law, proposals for new stores with more than 120,000 square feet of retail space must examine the economic impact of the development. It’s an ordinance that Mayor Jerry Sanders supported. Frye’s plan would apply that regulation and others to smaller facilities that qualify as superstores.

Wal-Mart spokesman Aaron Rios said the company would be willing to comply with the restrictions, if the council were to approve them.

“If it is something that mirrors what is in Los Angeles, we would have no problem,” he said.

But several groups that were supporting the ban were shocked at Frye’s announced change-of-heart just hours before the vote.

“I take people at their word,” said Lorena Gonzalez, political director of the San Diego-Imperial Counties Labor Council. “To say that we are extremely disappointed would be an understatement.”

A coalition of groups had also expected to benefit from the ban on Wal-Mart Supercenters. Traditional grocers and their union-wage workers were hoping to avoid competing with cut-rate prices for which Wal-Mart is famous. Small businesses claim the establishment of superstores drains neighborhood shopping centers of customers who are drawn to the one-stop experience offered by big-box grocers. For some environmentalists, the behemoth stores are poor examples of urban planning and magnets for auto traffic that discourage walkable communities.

While Frye insisted that her alternative will allow the city to restrict superstores, supporters of the ban weren’t so sure the Los Angeles model was strict enough because Wal-Mart has been able to work around it there.

Diana Spyridonidis, CEO of the Business Improvement District Council, has been supportive of the ban on Wal-Mart Supercenters. She said Wal-Mart prefers a law like Los Angeles’ “probably because it’s so watered down.”

In addition to Frye, Councilmen Kevin Faulconer, Brian Maienschein and Jim Madaffer voted against overriding Sanders’ veto. The four votes of Council President Scott Peters and council members Toni Atkins, Tony Young and Ben Hueso to overturn the veto fell one short of allowing the ban to stand.

Had the ban remained, the issue appeared headed for the June 2008 ballot. Wal-Mart’s Rios said the company had been gearing up to stage a referendum on the ordinance. The Arkansas-based retailer had already conducted some polling on the issue and was speaking to political consultants to handle the ballot measure, he said.

The superstore ban was bound to become a lightning rod in the coinciding city elections, when half of the city is slated to choose new council members and Sanders and City Attorney Mike Aguirre are to stand re-election for their respective posts.

Frye, in an interview about her switch, said she doubted whether the ban would survive a high-octane campaign and that it might negatively impact candidates who favored restraining superstores.

“I can see that becoming a big part of the discussion,” Frye said.

Wal-Mart and like-minded political strategists, in their public comments and advertisements, had already begun colorfully linking the superstore ban with organized labor. City Hall unions have absorbed much of the blame by commentators and politicians — mainly Republicans — for labor officials’ role in the pension deals that led to the $1 billion deficit found in the city’s employee retirement fund.

Sanders has been a vocal opponent of the ban, having wielded one of his few mayoral vetoes against the ordinance June 15. The mayor said Tuesday’s vote was “an enormous victory for San Diego consumers,” stressing that the ban would have blocked customers from choosing where they want to shop.

Sanders said he was unsure if he would support Frye’s proposal. He noted, however, that he has supported the principle of providing residents more opportunities to weigh in on major retail developments.

“I think community input should be valued and that’s what we wanted to do,” Sanders said.

Staff writer Nina Petersen-Perlman contributed to this report.

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