The Basics: The San Diego City Council recently passed an ordinance that required companies to do an economic impact study if they wanted to build stores with more than 90,000 square feet and also sell groceries. It also included a requirement that the City Council reject the store if the studies show that it will have an adverse impact on neighboring businesses.
Walmart easily gathered the signatures needed to put a repeal of the measure on the ballot and force a special election. The City Council reversed itself. You see, Walmart knows what it’s doing when it comes to local electoral politics.
So what have we all learned from this experience?
Lesson 1: Walmart Is a Different Company
That’s what Walmart’s director of community affairs Steve Restivo basically told me when I asked him to explain something.
In 2007, the City Council passed an outright ban of supercenters in San Diego. When the mayor vetoed the law, former City Councilwoman Donna Frye reconsidered her vote and the veto stood.
Frye was seeking some kind of compromise. She asked Walmart officials whether they’d agree to an ordinance that required an economic impact study before putting up a new store. It would involve a conditional use process — exactly what the city tried to pass now.
Aaron Rios, Walmart’s now senior manager for public affairs, responded to her:
To your question earlier that was presented, would we be willing to do some type of economic analysis that mirrors what is done in Los Angeles? If it’s something that mirrors what is in Los Angeles, we have no problem in agreeing to do that on new projects.
That was July 2007.
The city’s new law does mirror L.A.’s, with two minor differences: L.A.’s law only affects redevelopment areas and it only affects stores that are 100,000 square feet or bigger, not 90,000.
Walmart’s Restivo agreed that those were the only differences. Maybe I’m missing something but those seem quite minor.
So what made Walmart decide this compromise idea was now unacceptable?
“We’ve made a lot of changes in the company over the last several years. We’ve made our workers’ health plans better, greened our stores, changed packaging and you can see in some of the announcements with the First Lady, we’re dealing with food quality,” Restivo said.
“While I understand he said that in 2007, we would have the same response today which is that customers should have the choice where they shop,” Restivo said.
So wait a minute. They were willing to compromise on this in 2007. But now they think they’re so much of a better company they don’t need to? OK.
I’m a big fan of compromises so I was taken aback that one that was offered four years ago, and apparently accepted, was just disregarded.
Maybe the real lesson is: Why compromise when you can crush?
Lesson 2: Studies Are Worthless Without Teeth
I’m still uncomfortable with government targeting one type of business and asking that business to prove something difficult — that they wouldn’t have an adverse impact on existing businesses. Businesses compete. Walmart would divert sales from somewhere, right? There are disruptive changes to our economy all of the time.
The city’s Independent Budget Analyst’s Office determined said the new measure could be considered a “de facto ban” because of those requirements.
Labor Council CEO Lorena Gonzalez and political director Evan McLaughlin have not liked my, or the IBA’s, take on this at all and have insisted that it is not a ban on the Supercenters.
It all comes down to that language about the stores and their adverse impact on other businesses. So why not just remove it? If all the Walmart haters want is an economic impact study, why not just pass an ordinance demanding only that?
McLaughlin maintains that the language is needed not to force the city to reject supercenters but to allow the city to reject them for purely economic considerations.
Get it? Walmart’s critics want there to be one last chance to reject a supercenter if it conforms to all the other myriad demands a city puts on developers.
I guess that makes sense but they clearly want to stop the company. If it doesn’t do that, why would they fight so hard?
Lesson 3: If You Disagree with the Unions, Prepare to Defend Your Integrity
Gonzalez accused me on Twitter of only criticizing the measure because Walmart ran a series of ads on our site recently.
I told her that not only I, but other people, notably the IBA, had independently determined that this could be seen as a de facto ban on these supercenters.
She said the IBA had changed her mind. (No, she hadn’t, I verified.)
Then came this: CityBeat revealed that Walmart had recently given a series of donations to local nonprofits through its political action committee. That sparked a volley of accusations toward local officials.
The theory, apparently, was that City Council president Tony Young and his colleague Todd Gloria sold their vote. If Walmart gave donations to causes they cared about, I guess the theory was they’d agree to repeal the ordinance they voted for.
The corruption theory caught on.
UFCW Local 135, which represents 14,000 grocery and other commercial workers, posted this comment on its Facebook page:
So is this the reason why Tony Young and Todd Gloria sold out to Walmart. Call Tony Young at 619-236-6644 and Todd Gloria at 619-236-6633 and ask them about their character or lack thereof. Find out why money is more important to them than people.
Labor Council political director Evan McLaughlin added this referring to the San Diego County Taxpayers Association and Councilwoman Marti Emerald:
.@sdcta & some council members flipped on superstores after #walmart donations came thru. But @MartiEmeraldD7 ? Her vote’s not for sale!
He later said he was only being skeptical not accusatory.
Lesson 4: Want to Score Points with Unions But Still Be Business Friendly? Call Juan!
It was with great speed and fury of a policy superhero that state Sen. Juan Vargas announced he was going to breathe life into the fight after Young and Gloria’s capitulation.
Vargas’ said he’d pursue a statewide version of the City Council’s ordinance.
“If the San Diego City Council won’t stand up to Wal-Mart, the State of California should,” he wrote.
But what Vargas is proposing doesn’t look like the same thing as what the City Council tried to pass. His law may not include something similar to the local one: the teeth I referred to in Lesson 2. It may only require an economic study be done.
I asked Vargas’ office for a copy of his proposal and about this issue. They said the final language was still being adapted to state law. But Janine Pairis, his district director, wrote me this:
Since this would be a State ordinance the primary difference would be that the developer would have to work with the respective Planning Department in the municipality from which it is hoping to obtain approval.
And if you read Vargas’ own statement, there’s nothing to indicate he wants anything more than an economic impact study to be done before the supercenters are approved. If that study said it would blast a crater in the Earth into which all coins and dollar bills would eventually be sucked, it wouldn’t matter.
I asked Walmart’s Restivo if the company would oppose it with the same vigor it did in San Diego.
He said he didn’t know. Yes, he said, if it had the same key language as the city’s did.
If it doesn’t have that language, Vargas’ I’m-tougher-than-you spiel will be proven hollow because it’s not what San Diego tried to do.
And that might very well be why it could successfully become law.