California Bills Aim to Help Communities Defend Against Wal-Mart

The past few years have seen an increase in the number of communities whose residents and businesses have banded together to fight against proposed big box development. In California, state Sen. Richard Alarcon (D-San Fernando Valley) has taken this battle one step further with two bills designed to assist local governments in their battles to keep big box retailers, such as Wal-Mart, out of their towns. What's more, in late August, after passing the California Assembly, both of the bills passed the Senate, and presently await Governor Arnold Schwarzenegger's signature. AP recently reported that the Governor has not taken a position on the bills.

On Tuesday, August 29, S.B. 1818, a bill that would provide local governments with the ability to recover attorney fees in a civil action brought by a big box retail store under certain circumstances -- when the local government is the prevailing party -- passed by a vote of 24 - 13 in the Senate.

A day later, on Wednesday, August 30, S.B. 1523 -- a bill that would assist local governments in addressing the concerns of communities and small businesses by requiring an economic impact report to be conducted prior to the approval of a superstore by a local government entity -- passed 23 - 16 in the Senate. According to AP, big box stores would be required to pay for the report.

According to information provided to BTW by Sen. Alarcon's office, Alarcon introduced S. B. 1818 in response to cases like one that occurred in 2003 in Turlock, California, where Wal-Mart challenged a town ordinance that prohibited stores that exceed 100,000 square feet of gross floor area and devote at least five percent of the total sales floor area to the sale of nontaxable merchandise. The City of Turlock spent over $300,000 fighting the lawsuit over the last two years. And while stores such as Wal-Mart "often have vast sums of money to spend in court," many local governments do not, and "may fear adopting zoning ordinances that impact big box retail stores."

S.B. 1818 looks to solve this quandary as it is "narrowly tailored to address a unique problem caused by a unique type of plaintiff who picks a fight with a much smaller opponent in a limited set of circumstances. It applies only where:

• the action is brought by a big box retailer;
  
  
• only with respect to zoning actions;
  
  
• only when that retailer dwarfs the local government in resources available for the litigation;
  
  
• only where the litigation is brought or maintained to intimidate the local governmental entity to abandon its zoning decision because of the retailer's substantially greater financial resources to conduct the litigation; and
  
  
• only where the big box retailer has a history of improper litigation behavior."

As for S.B. 1523, which requires an economic impact prior to the approval of a superstore, legislative background provided by Sen. Alarcon's office noted that "the expansion of superstore retail in California has negatively impacted the wages and benefits of the state's working people. Superstores are also severely impacting small business, the engine behind California's job growth.... According to the New Economics Foundation, a dollar's purchase of apples at a local farmer's market yields $2.40 for the community. The same purchase at a superstore yields only $1.40 for the community.... In addition to threatening small business, superstores can also lead to a huge increase in public sector costs at a the local level through increased traffic, possible vacancies at other retail sites, and increased blight."

As such, S.B. 1523 "equips local governments with an economic impact report formula that accounts for all major external affects of superstore retail stores, both positive and negative."

According to AP, the two bills passed the Senate over the "objections of [Wal-Mart], business groups, and Republican lawmakers." In addition, Wal-Mart is against economic reviews "that it says would invite lawsuits to block stores, company spokesperson Trudi Hughes told AP. "If local governments want to stop projects, they can. They don't need state legislation," she said. "This is legislation that will hurt consumer choice." Hughes is "hopeful" that Governor Schwarzenegger will veto the bill. --David Grogan