Atascadero, CA. City Must Dig Deep To Pay For Roadwork To Wal-Mart
Since 2006, Sprawl-Busters has posted 13 stories about the citizens' battle in Atascadero, California to keep out a Wal-Mart superstore. The group "Save Atasacadero" has fought against this project for eight years. The group was critical of a multi-million corporate welfare deal the city offered Wal-Mart--and now it appears that the cost to taxpayers is much larger than ever imagined. It appears now that the town is on a financial "road to ruin."
The Project is called the 'Del Rio Road Commercial Area Specific Plan.' It envisions development of two non-contiguous areas totaling approximately 39.3acres located at the intersection of El Camino Real and Del Rio Road in the City of Atascadero.
The Project has two components. The first consists of a Wal-Mart Supercenter of 129,560 square feet, together with two 5,000 square foot commercial outlots and up to 44 multi-family residential units, to be developed on approximately 26.2 acres.
The second consists of approximately 120,900 square feet of various commercial and retail uses and up to 6 new dwelling units to be developed on approximately 13.1 acres by the Rottman Group.
Significant traffic impacts at the intersections of 101 and El Camino with Del Rio Road and their mitigations are the sole responsibility of the project applicants: "Because there would be no impact without the project, the project applicant would be responsible for fully funding and constructing the improvements," the Environmental Impact Report on the project stated.
Wal-Mart sold itself to the city claiming it would pay for all the traffic mitigations required, but has reneged on that promise. Meanwhile the Rottman Group went bankrupt, and refused to pay anything for the traffic mitigations.
So, the City came up with a scheme to publically finance with taxpayers monies the lion's share of an unknown cost of the traffic mitigation at the intersection. The real cost, citizens warned, could range anywhere from $4.5 to $11 million dollars. Because much of the property and the 101/Del Rio interchange is state owned land, Cal Trans, the state transportation agency, must evaluate and assess what will be required and how much it will cost. The project was ultimately approved by the City Council in 2012.
This week, taxpayers finally got some financial details---and the picture was not pretty. According to the Tribune News, Atascadero citizens are dealing with a bad case of 'sticker shock' over the cost of road improvements to accommodate the Wal-Mart.
The City Council did not have actual costs in hand, only cost estimates for the road upgrades. One City Councilor told the Tribune, "The city failed in their negotiations to determine what the fair share was for all parties involved by not having a true, accurate number on what the cost of the project would have been."
Road construction pegged at $4.5 million in 2012, now is estimated at $12 million. "To be that much more expensive was appalling," another Councilwoman told the Tribune. Even worse, the owner of the development is not required to pay for it all. The city's contract split the costs based on the $4.5 million figure, now dramatically outdated. The city has to come up with at least $6 million it did not plan for.
In 2011, a Wal-Mart spokesperson was quoted by the Tribune as saying: "Wal-Mart's position is clear and has not changed: Wal-Mart, the Annex developer and the owners of the future development -- not taxpayers-- should pay for traffic improvements." Three roundabouts and two new traffic signals and a long list of smaller construction items.
Save Atascadero member Tom Comar, blasted the city's review of the project, saying that the Council "lacked recognition of the realistic costs of traffic mitigation that the city and taxpayers would be responsible (for). This was a dereliction of duty." Comar fears that city officials will try to come up with the Wal-Mart road work by earmarking funds that were supposed to go to other city roads.
Atascadero resident Michael Latner said the city made a bad deal two years ago. "The council's decision to legally commit taxpayer money to the development, under very unfavorable circumstances for the city and based only on estimates of the true costs, was reckless to say the least," he said.
The original cost estimates were prepared by Wal-Mart's own engineer.
During the public hearings on this project, one member of the Atascadero Planning Commission who voted against the Wal-Mart, stated publicly that "The project entails costs and risks for Atascadero that greatly exceed the hoped for benefits and rewards... The public's money is not for gambling, especially in such large amounts and on such an unsafe bet."
What you can do: Readers are urged to contact Atascadero Mayor Tom O'Malley at email@example.com with the following message:
"Dear Mayor O'Malley
Regardless of who low-balled the projected roadwork for the Del Rio Road project, it is clear that there is only one party that has the resources to travel down this expensive road: Wal-Mart.
There was never any justification in giving Wal-Mart any corporate subsidies to build the roadwork necessary to accommodate this superstore and related development. The city was never obliged to literally pave the way for a Wal-Mart.
The retailer told the media three years ago that the developers and Wal-Mart---not the public---should pay for road improvements. If the Waltons cannot afford to build his project without taxpayer welfare, the project should not go forward.
The city may have felt it was necessary to offer Wal-Mart a candy stop of tax incentives to seal the deal, but now that the cost overruns are huge, the Mayor of Atascadero should approach Wal-Mart to step up and pick up the cost of roadwork that enhances their bottom line more than anyone else. This money should not be borrowed from other city accounts or projects.
Send the bill to Bentonville and the Waltons, who collectively were worth $148 billion in 2013. That's the road to take to fund this boondoggle.