Editorial: Super-retailed

Tonight the Elk Grove City Council is expected to have a rather anticlimactic discussion about banning retail "supercenters" in much of the city. Some council members, most notably Jim Cooper, had expressed interest in such an ordinance. But the Elk Grove Planning Commission trounced the idea recently, and momentum seems to be shifting away from legislating against the likes of Wal-Mart.

It is hard for a city to change national retail trends through any local ordinance, for banning supercenters in one town doesn't prevent them from surfacing in another. But Elk Grove can control how many stores it has through zoning. The question is whether it is saturating the landscape with more stores than the local economy can sustain.

Cities crave sales taxes from retail activities such as auto malls and often act as though more retailing is always better. Why? Sales taxes flow to cities based on where people shop, not where people live. So cities that build more retail strips and power centers can generate more taxes than a city that concentrates on building, say, communities near transit. We have long decried the rules of this screwy game and wish that cities were rewarded for building balanced communities, but it is what it is.

Elk Grove probably thought that it was winning the chase for sales tax dollars. Sales tax revenues rose from 16 percent to 21 percent annually between the 2003 and 2006 fiscal years, according to a recent story by The Bee's Loretta Kalb. Every chain store imaginable seems rooted on some Elk Grove corner. But that's now part of the problem.

The city is expecting sales tax revenues to increase only 1 percent next year. It would be easy to blame the slow-down solely on the economy, but Elk Grove is still growing. So many stores line so many thoroughfares that building new ones may not increase overall sales activity. New ones may simply shift the shopping from one store to another, a form of economic cannibalism.

The trend in retail economics south of downtown Sacramento has been obvious for years. As Elk Grove and retail along Laguna Boulevard boomed, the strip to the north along Florin Road began to suffer. Elk Grove has plans for a massive new shopping center. How will that challenge the viability of retail on Laguna?

A vibrant city should have plenty of diverse and enjoyable shopping opportunities, but too much retail space can lead to empty stores, urban decay and decreasing property values. That's the worry Elk Grove should be pondering. How about at tonight's meeting?