Mega-Stores Hitting Political Flak In Several States

Preventing mega-stores such as Wal-Mart and Costco from chewing up competitors is on the agenda of more than just anti-growth groups and environmentalists these days. Communities in several states are considering restricting so-called "big-box" stores. The battle pits unions and supermarket chains and their political allies against the influential goliaths that sell goods more cheaply by selling in volume.

Last Wednesday, California Gov. Gray Davis vetoed a controversial bill passed by the Democratic-controlled legislature in the final 72 hours of the legislative session. The bill, which received no public notice or input, was supported by organized labor and California's biggest supermarket chains.

Sponsored by Assemblyman Dick Floyd (D-Wilmington), it would have prohibited public agencies from approving retail store projects larger than 100,000 square feet, often called "big boxes," if more than 15,000 square feet of the store will be devoted to the sale of non-taxable food and drugs. Existing stores would not have been affected.

"Not only is this bill anti-competition and anti-consumer, it represents the worst kind of end-of-session maneuvering by special interests," Davis said in his veto message. "Matters largely involving local land-use and zoning decisions should not be preempted by the Legislature and Governor without thoughtful deliberation."

Mega-stores like Wal-Mart and Costco sell groceries and pharmaceuticals alongside tires, tools and toys, and are often criticized by anti-development groups as overrunning smaller stores that are the centerpieces of many communities.

Wal-Mart, which is non-union, owns 2,454 stores that serve more than 100 million customers weekly in all 50 states. The mega-store, which sold over $137.6 billion in goods in fiscal year 1999, also has 729 stores outside of the United States.

Costco stores number 300, with two more opening up this week--one in the Atlanta suburb of Morrow, and one in Ft. Meyers, Fla. One out of three Costco's is in California, and about 40 percent of Costco workers are members of the Teamsters Union. The membership-only chain serves 17 million American households. In fiscal year 1999, its sales totaled $27 billion.

The Golden State is not alone in debating limits on mega-stores. Communities in Arizona, Colorado, Nevada, Vermont and Wisconsin have all addressed land-use issues associated with the stores:

  • On Monday night, Tucson's City Council voted to put limits on the construction of big-box superstores. According to the Arizona Daily Star, the council ordered two public hearings and final council approval before superstores can be built and banned superstore/supermarket combinations under one roof.
  • Clark County, Nev., Commission Vice Chairwoman Erin Kenny introduced an ordinance in Las Vegas last week that would limit grocery areas of stores of 110,000 square feet or more to 2 percent of their floor space.
  • In 1994, Fort Collins, Colo., imposed a six-month moratorium on new buildings of 40,000 square feet or more.
  • Lake Geneva, Wis., stopped construction of retail stores of 60,000 square feet or more in July 1998.

"Our master plan aims to keep us a small town, and the council decided big boxes did not fit our small character," Barney Brugger, building inspector and zoning administrator for Lake Geneva, told the Arizona Daily Star.

The building moratorium was lifted after the city council in February adopted controls on big-box construction, Brugger said.

In 1970, Vermont adopted a land-use controlling act, which requires that stores developing an acre or more of land file a proposal with one of the Vermont Environmental Board's nine district commissions showing how it will deal with 27 environmental and economic impact criteria in 10 categories.

Vermont was the last state to get a Wal-Mart, and now has four of them.

Although California's Gov. Davis vetoed the big box bill, he signed another bill that prohibits local governments from offering financial incentives to large retail stores or auto dealers that relocate from one jurisdiction to another in the same market area, unless the receiving local government offers to share some of the resulting sales tax revenues with the other local government.

Gray also ordered a study of local land-use problems caused by sprawling auto malls and discount warehouse chains given incentives to move in by cities looking for sales-tax revenue.