Redlands, CA. Voters Face Cap on Big Box Stores In June
On January 27, 2009 Sprawl-Busters reported that Wal-Mart was proposing a zero sum game in the city of Redlands, California. The retailer approached city officials with the idea of closing down its existing discount store, and opening up a larger superstore instead. Open one, close one. Wal-Mart officials met with members of the city's Planning commission to present plans for a 215,000 s.f. superstore on the north side of the city.
Roughly 46 acres near San Bernardino Avenue and Tennessee Street is slated for the project, which would include the supercenter, plus 9 other parcels for retail space. In 2008, in anticipation of big box applications, the City Council and the Planning Commission passed ordinances that require projects larger than 75,000 s.f. to be approved by the Commission and the Council.
Almost immediately an opposition group formed to block this huge project. A group called The Good Neighbor Coalition (GNC) presented a voter initiative in July of 2008 to stop big box stores from coming to Redlands. "We're concerned about the effect on local grocery stores," coalition member Dianne Landeros told the Redlands Daily Facts newspaper when the ballot question was formed. "The Super Wal-Mart could have a really devastating effect on them." Redlands has Vons and Statler Brothers grocery stores, both of which could suffer significant loss of sales if another large grocery store opens.
In California, where sales tax revenues are kept locally, cities and towns fight with one another over sales revenues, as the main way to pay for local government services. This has created what is known as 'cash box zoning,' in which cities and towns compete for malls and big box stores for their revenue, rather than evaluating their land use impacts, or need in the first place. The city of Redlands says it's hurting for revenue, and has a city budget with almost a $3 million deficit.
On October 18, 2009, Sprawl-Busters reported that The Good Neighbor Coalition delivered two boxes containing more than 8,000 signatures into the City Clerk's office to file a petition that would ban Wal-Marts and any "big-box" retailers from building in Redlands. The GNC collected more than 15% of the registered voters, so their initiative question will appear on the ballot this June. Once the issue was certified for placement on the ballot, the City Council had the chance to vote to accept the ordinance and make voting on the ballot question unnecessary. But on February 16, 2010 the City Council in Redlands did not vote to support the initiative, so it heads to the voters.
The initiative petition bans the construction of "mega-retail development," which is defined as stores with sales floors totaling 100,000 s.f. or more, in which more than 3% of the sales floor is dedicated to selling non-taxable merchandise. The proposed Wal-Mart supercenter, at 215,000 s.f would be limited to having 6,450 s.f. of grocery space -- which would make the grocery component unlikely. In effect, projects like the Wal-Mart would be banned in the future. Wal-Mart is no longer building discount stores. All of its stores this year have a grocery component as part of the superstore. The grocery section is usually at least 40,000 s.f. The Good Neighbor Coalition initiative petition would cut these sprawling projects down to size.
The initiative will appear on the ballot as "Measure O," and will come before voters on June 8th, or roughly 8 weeks from today. This does not give supporters of Measure O to build up much of a campaign -- and gives Wal-Mart a huge advantage. The giant retailer has been known to spend between $250,000 and $500,000 or more on such initiatives. There is no limit on how much a corporation can spend on such elections, while the citizens have to hold bake sales to raise money.
Wal-Mart's line will be that Measure O restricts the 'freedom to shop.' A spokesman for the retailer told the Contra Costa Times, "This will limit the choices of the city of Redlands for years to come." The local business establishment which should be supporting Measure O and smaller, local businesses, is instead backing the national chain store. The head of the Chamber of Commerce pointed out that the Measure O would restrain the existing Kmart from expanding. "I don't know if (Kmart is) planning on expanding the same as Wal-Mart is," the head of the Chamber admitted, "but if they are, (Measure O) would stop them." If she had picked up the phone and called her local Kmart manager she would have learned that Kmart is barely hanging on -- and certainly not a candidate for expansion.
The Good Neighbor Coalition gathered 5,830 signatures to get on the ballot, but now the group will have to gather money -- and lots of it. The city of Redlands has witnessed a drop in sales tax collection, so the illusory aspect of Wal-Mart sales taxes seems too good to pass up. But most of those 'new' revenues will in fact come from the existing sales base now held by other grocery stores and retailers. In effect, the Wal-Mart expansion is just a transfer of sales, not a net change.
The Contra Costa Times quoted Sprawl-Busters as saying that size cap ordinances "are an example of cities and towns trying to lead growth in their communities, rather than follow the lead of developers. This is an important expression of local control powers." The GNC, which wrote the ordinance, told the newspaper, "There's a lot of history of resistance to Wal-Mart coming in and developing. It takes a various forms. There's lots of different ways and lots of different cities that have tried to keep Wal-Mart out."
Wal-Mart told the Contra Costa Times that it had not yet decided how the retailer will respond to the ballot question. But voters in Redlands better fasten their seatbelts. They will soon be hit by a tidal wave of robo calls, brochures, and radio, TV and print ads, opposing Measure O. The voters will be saying "O my God" by June 8th, after witnessing the amount of cash Wal-Mart will put out (under the cover of an astro-roots campaign organization). In effect, Redlands is now for sale, and in Wal-Mart's corporate democracy, the highest bidder wins.
What you can do: Redlands is 60 miles northeast of Los Angeles. The city promotes its historic downtown district, and its "great atmosphere." In 1990, the population of Redlands was 60,394. By 2007, the population had increased to 69,941. There is room for additional retail growth in Redlands because the consumer pie is growing. The problem with the Redlands market is that Wal-Mart is already there. The retailer has a discount store on West Redlands Boulevard, close to the site of the proposed superstore. This means that most of the sales at the proposed superstore are already located at the Wal-Mart discount store, and the marginal difference between the two stores will come largely from existing merchants.
The net impact on revenues to Redlands will be negligible. When the superstore opens, Wal-Mart will close their discount store, leaving an empty 'dark store' for the city to fill. This could take years to accomplish. In the interim, the store deteriorates, and becomes blighted, hurting other property near it. Redlands would do better to reformat its existing Wal-Mart store, rather than allowing a totally new site. Wal-Mart will not admit the fate of its old store, but California and other states are littered with hundreds of dead Wal-Mart stores that were 20 years old, or less. These stores did not last beyond their usefulness to the company as profit-centers -- they were shut down because Wal-Mart found that supercenters were more profitable because groceries bring people back to the store more often than clothing or household items.
There are currently 12 Wal-Mart stores within 20 miles of Redlands. Only one of them is a superstore. Over the next few years Wal-Mart will either expand or shut down most of these discount stores, so what Redlands is experiencing now, will become a shared experience in cities like Highland, Colton, Moreno Valley, Riverside, Rialto, San Bernadino, Fontana -- and all the neighboring communities that have Wal-Mart discount stores. This trade area is saturated with Wal-Mart stores, and the move to supercenters will only displace other grocery stores -- not provide any major sales tax bounce to desperate cities and towns.
Readers are urged to email Patricia Gilbreath, the Mayor of Redlands, at: firstname.lastname@example.org with the following message: "Dear Mayor Gilbreath, You have a Master's Degree in Business Taxation. You can see that Wal-Mart's expansion in Redlands is largely a shell game -- since most of the sales at its cash registers will come from other existing businesses in the city. You know that large scale, automobile oriented developments are just not sustainable in the long term.
Redlands has a revenue problem, but encouraging further sprawl, like a larger Wal-Mart supercenter, adds no value to your city. The 'old' Wal-Mart on West Redlands Boulevard will be shut down if a supercenter ever opens. In effect, Redlands will have wasted 46 acres of land for another retailer, with the added burdens of traffic and crime at a time when the city is reducing its public safety budget. A bigger Wal-Mart is not the answer to Redlands' economic woes.
The City Council should encourage Wal-Mart to reformat its existing store in Redlands rather than using a completely new site to replace an existing store. The retailer has supercenters that are no bigger than the size of your existing discount store. This is not economic development, its economic displacement.
The city council could have accepted the Good Neighbor Coalition initiative, but now that Measure O is on the ballot, as Mayor, you should embrace it, and warn residents that the retail sector is not like manufacturing -- it largely cannibalizes itself. Adding more sprawl -- regardless of the logo on the building -- is not in the economic interest of Redlands.
Take control over growth in your community, and support Measure O this June