San Diego, CA. Wal-Mart Buys San Diego
One City Councilor in San Diego, California called it a "dark day for democracy."
Wal-Mart needed only 8 weeks and maybe twenty thousand dollars to scare the daylights out of the City Council in San Diego. On December 12, 2010, Sprawl-Busters reported that the City Council in San Diego had voted to override a veto by the city's Mayor of an ordinance that would have required certain big box stores over 90,000 s.f. to study their economic impact on the community, on wages, and on traffic. It was a watered down ordinance at best, but Wal-Mart began portraying the ordinance as an outright ban on superstores, and the retailer hired professional signature collectors to put the issue on the San Diego ballot.
Knowing that cash-strapped San Diego would have to swallow hard to come up with the $3.4 million cost of a referendum, Wal-Mart had put the City Council neatly in a box. Faced with the expense of a referendum, the City Council voted 7-1 to repeal the ordinance -- not because they had a change of heart -- but because fighting Wal-Mart was not worth millions of dollars to the Council. Once again, Wal-Mart has demonstrated that public policy is for sale.
For several years, anti-big box residents have been trying to keep huge stores out of San Diego. On June 5, 2007, Sprawl-Busters reported that Wal-Mart was threatening a voter referendum on a big box ban in San Diego. Wal-Mart was very displeased with a city ordinance which placed a size cap on retail stores. A series of city council votes, stretching back to November, 2006, had prompted Wal-Mart to threaten city officials that if the size cap ordinance passed, the retailer would gather signatures to try to repeal the measure using the ballot.
In November, 2006, the city council took its first major step towards imposing a cap on the size of retail buildings when it voted 5-3 to ban retail stores of more than 90,000 s.f. that use 10% of their interior space to sell groceries or other merchandise that is not subject to sales tax. This ordinance was modeled on similar ordinances in California -- most notably Turlock -- where Wal-Mart failed repeatedly to challenge the law in the courts.
The Mayor of San Diego, Jerry Sanders, told reporters at the time that he would veto the new cap if it went through its required second vote in January. San Diego's ordinance was seen as a pre-emptive strike, since the city had no Wal-Mart supercenter. But local sources indicated that Wal-Mart was ready to add several supercenters in San Diego.
In early June, 2007, the city council took its final vote to pass the new ordinance on a 5-3 vote. Mayor Sanders made it clear he would veto it, and to further intimidate the city council, Wal-Mart indicated that they would hire people to gather signatures to put the measure on the ballot in the form of a referendum.
Wal-Mart's threat was enough, because holding a special election is very expensive, and city councilors were not prepared to tangle with Wal-Mart. Instead, when Mayor Sanders vetoed the ordinance in July, 2007, one city councilor, Donna Frye, changed her vote and opposed the ban, and voted with the Mayor.
The San Diego Union-Tribune called Frye's change of heart a "surprise twist." This made the vote on the override a 4-4 tie, which meant the override did not prevail -- and the Mayor's veto killed the new big box ordinance Frye told the media she wanted to work on a new version of the law that would require big box stores to study their economic impacts on other businesses.
That's exactly what happened. "I heard from many, many people that want to have that choice," Frye told the Union-Tribune, "and I think there's a way to give people that choice, to hopefully put something in place that also protects small businesses by doing an economic impact report and allowing the communities to have a greater oversight of that process."
The head of the United Food and Commercial Workers (UFCW) Local 135, said he was shocked when he heard the rumors that Frye had switching sides. He said union members flooded her office with phone calls in protest. "I think she turned her back on working people," he said. "I think she turned her back on her constituents, and quite frankly I think she proved that she doesn't have the guts to stand up to the mayor or stand up for her constituents."
One of Frye's constituents was quoted by the newspaper as saying, "These things are environmental abominations and you have no idea what you're giving up by not overturning the veto," he said. "They have horrible traffic impacts, horrible noise impacts, horrible air quality impacts. They are energy hogs, and they are not compatible with the neighborhood concept this city wants to have." The head of the San Diego Neighborhood Market Association, which represents 2,000 small businesses in the city, said her group was disappointed by Frye's decision to reverse her vote.
Almost three and a half years later, the city council took up a watered down version of a big box ordinance. Once again, the city council passed an ordinance -- this one to require certain superstores over 90,000 s.f. to conduct an economic impact statement.
A 'superstore' was defined as one which dedicates more than 10% of its floor space to groceries, prescription drugs, and other nontaxable items. It would not affect home improvement stores or warehouse clubs like Sam's and Costco.
Such economic impact report ordinances have been adopted in many communities across the country, and are a statutory requirement in states like Maine and Vermont. Most impact ordinances do not distinguish between those carrying groceries, and those which do not.
Repeating history, Mayor Jerry Sanders vetoed the milder economic impact legislation on November 29, 2010. "I do not believe it is the City's role to determine where consumers may shop or to provide a competitive advantage to certain retail businesses," Sanders said in his veto message.
Councilor Todd Gloria, who was the lead sponsor on the economic impact ordinance, needed to round up five votes for the measure. The councilor who switched her vote, Donna Frye, was stepping down from the Council. But the new councilors coming on in January would tip the balance against the economic impact ordinance -- so Gloria moved ahead with an override vote on the Mayor's veto. This time around, the City Council voted to override Mayor Sanders, and the new ordinance was on the books.
Before the override vote, Wal-Mart began threatening a public referendum. The retailer took out full page ads in the Union-Tribune newspaper, saying the City Council was just carrying water for the unions, and urging San Diego voters to "be a voice for choice."
By mid-December the Union-Tribune reported that Wal-Mart "has launched a furious campaign" to gather at least 31,000 signatures to put the new law to a referendum vote. The giant retailer hired private firms to gather signatures for them -- and where else to gather signatures than in front of another Wal-Mart store? One of the companies Wal-Mart hired told the newspaper that they were standing in front of a nearby Wal-Mart gathering signatures for San Diego residents shopping at the Wal-Mart.
But the cost of gathering these signatures was trivial compared to the public cost facing San Diego taxpayers if this referendum were to be held. Because there were no elections slated in 2011, the city would have to hold a special election, and taxpayers would have to pick up as much as $3.4 million for Wal-Mart's vote.
Because San Diego is already facing a major budget deficit, no one in the city wanted to waste taxpayer's dollars, so Wal-Mart's opponents called on the company to pay for the election it wants to hold -- since it is the company which stands to gain hundreds of millions in new sales if the big box law is overturned.
The head of the San Diego-Imperial Counties Labor Council, Lorena Gonzalez, told the Union-Tribune that Wal-Mart should pick up the tab for the special vote -- because this is being done at Wal-Mart's instigation. "While $2.5 million is probably a drop in the bucket for a company at the top of the Fortune 500 list," Gonzalez said, "it's sorely needed in a city that is struggling to keep cops on the street, fire stations on alert and libraries open."
This week, the City Council caved to Wal-Mart. The vote to repeal was 7-1. The capitulation was done in front of an audience of nearly 100 people who had come to try and save the ordinance.
But City Council President Tony Young pointed out all the better uses the city could fund with $3 million. "It's been a really tough fight," he told the Associated Press, "but we also have to keep in mind that we do have a fiduciary responsibility to the city of San Diego."
What you can do: In the run-up before the City Council vote, Wal-Mart told the media it planned to build a dozen new stores in San Diego, which would create 1,100 jobs -- and no one from the media asked: "Is that a gross or net figure?"
Wal-Mart's San Diego charge was all about gaining market share -- and capturing sales from other cash registers.
After the vote, Wal-Mart was puffed up like someone who had won a big pot at Texas Hold'em with nothing in the hole. "Thanks to this vote," a company spokesperson said, "we will be able to provide the people of San Diego with improved access to affordable and fresh food, particularly for those living in underserved neighborhoods."
The lone holdout was City Councilor Marti Emerald, who told the audience, "My vote is not for sale." And Council Todd Gloria, who had championed the watered-down ordinance, could only mutter: "Let's be clear, this is a dark day for democracy."
Wal-Mart has fought similar ordinances across the country, arguing that local officials have no right to limit the "freedom to shop," as if this was enshrined in the Bill of Rights somewhere.
The company's attempts to challenge such laws in the courts have all failed. So now they turn to the ballot box. With corporate free speech a bottomless well, fighting Wal-Mart is like going up against a candidate with a massive campaign war chest.
For now, San Diego has been bought and sold by a large corporation. But the day after the vote, a State Senator from San Diego, Juan Vargas, vowed to submit legislation in Sacramento that would accomplish the same goal as the short-lived San Diego law.
Vargas, who once sat on the San Diego City Council, told the Union-Tribune, "What I did not like was that one company and one company alone had the power to scare the City Council into changing its mind and that is what happened. That's not right. That's not the way government should work. One company should not have the power to do that."
When Wal-Mart learned of Vargas' initiative, the company told the media that state lawmakers should focus on solving "the state budget woes" instead of "trying to thwart the will of the people." But Wal-Mart should keep its corporate money out of politics, and go back to selling cheap underwear.
Readers are urged to contact Senator Juan Vargas at http://sd40.senate.ca.gov/contact with the following message: "Dear Senator Vargas, I support your effort to get a state law passed similar to an ordinance in Maine that requires a full economic impact study of big box projects. As you know, in Vermont, Act 250 has had this kind of requirement since the early 1970s, and many cities and towns across the country have Major Development Review ordinances.
But the San Diego ordinance is weak. Cities and towns should have the right to limit the scale of large projects, as a way to limit adverse impacts on local businesses, traffic, and residential values. A bill requiring stores over 90,000 s.f. to obtain special permits with a four/fifth's vote, and to pay for independent traffic and economic studies, would be a stronger version of the San Diego ordinance."