Sacramento to reconsider limits on big-box stores

Published: Friday, Apr. 26, 2013 - 6:29 pm | Page 1A
Last Modified: Wednesday, Jun. 19, 2013 - 12:02 am

Sacramento officials have proposed a repeal of the city's strict regulation of big-box superstores, setting up a showdown with labor unions that have spent years battling retail giants like Wal-Mart Stores Inc.

For more than a year, building industry and development advocates have worked behind the scenes to reverse the city's 2006 big-box ordinance.

That law, passed by a City Council with stronger ties to organized labor than the one presiding now, requires complex economic analyses and wage studies for chains seeking to build stores larger than 90,000 square feet with more than 10 percent of the space dedicated to groceries. The law does not apply to stores with memberships, such as Costco.

Just five big-box stores operate within city limits, none of which are considered superstores because they do not meet the overall size and grocery space thresholds of the law, according to a database provided by the city development department. And while neighboring cities have looser restrictions on superstores – there are 35 big-box stores in other jurisdictions in the region – reversing the law has become a potentially explosive topic in Sacramento.

The mere thought of reversing the ordinance has angered influential labor leaders, who are expected to disparage the proposal at a community forum Monday night at Old City Hall, 915 I St. Some council members, including those who have pushed for the change behind the scenes, are refusing to make their opinions on the matter publicly known, seeking to distance themselves from the tense debate.

The proposed change is part of a wider push at City Hall to streamline decades-old business regulations and ease the permitting process for new development. The council voted earlier this month to do away with dozens of fees and restrictions in the city's first major overhaul of its zoning code in 50 years.

Council members could have voted to repeal the big-box ordinance as part of the larger business regulation and zoning package. But given the controversy surrounding the proposal, city staff separated it to allow more time for discussion.

After a series of debates – beginning with the Monday meeting – the council is expected to vote on the change in July.

Much of the debate is focused on the planned Delta Shores development, to be built on 800 acres next to Meadowview on the city's southern edge. Delta Shores is one of the city's last large tracts of open land, and plans call for large retail centers and hundreds of houses.

Attorney Gregory Thatch, who represents the project's developer, said Delta Shores is "definitely the type of development that would include big-box stores," but said no tenants are signed yet. Thatch, who has represented several large development projects in the city, was also critical of the big-box restrictions.

"That ordinance does inhibit what you can do," he said. "It's an issue that looms out there."

Bill Camp, a leader of the Sacramento Central Labor Council, a coalition of labor unions, said repealing the ordinance would open the door to a Walmart in Delta Shores. Labor unions have long fought with the nonunion retail giant over salary and health care issues, and Camp described the chain as "an economic terrorist" that relies on goods made in China and mistreats its workers.

"They're destroying our economic base," Camp said. "And now (the city) is going to promote that?"

For now, the fervor may be misplaced: Wal-Mart has no plans to open additional stores in Sacramento, said company spokeswoman Delia Garcia.

On the other side of the debate is a coalition of pro-business organizations led by Region Builders, a building industry advocacy group. The California Retailers Association and the Sacramento Metro Chamber of Commerce also support the change.

In a letter to Mayor Kevin Johnson and the City Council this week, the state retailers association called the current ordinance "arbitrary, subjective and easily manipulated by special interests."

"As such, many retailers are not inclined to risk their capital on a development process riddled with political and legal risks, especially when evaluating the economic impact of big-box development is already required under the California Environmental Quality Act," wrote the organization's president and CEO, Bill Dombrowski.

Some council members – including those who have worked closest with the chief advocates of repealing the ordinance – declined to say whether they will support the change.

Councilman Darrell Fong, who has worked closely with Region Builders and others on the ongoing streamlining of the city's zoning codes, declined comment. Another key proponent of the zoning changes, Councilman Jay Schenirer, said he had not thought about the big-box ordinance enough to discuss its potential repeal in detail.

Councilman Kevin McCarty, who voted for the current ordinance seven years ago and is a key ally of organized labor at City Hall, said he has "heard about the rumblings to change our law," but that he would withhold judgment until hearing arguments from both sides.

One councilman who did say he supports the repeal is Allen Warren, a developer who now represents the challenged neighborhoods of North Sacramento.

"We have to create a business climate where the labor unions and private business coexist in harmony," he said. "And it's very difficult for me to support an ordinance that limits business and particularly when I represent a district that falls way short of having the kind of services that some of these larger businesses provide."

Call The Bee's Ryan Lillis, (916) 321-1085. Read his City Beat blog at sacbee.com/citybeat. Follow him on Twitter @ryan_lillis.

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