Thursday, September 23, 1999

California governor vetoes
bill to ban ‘big-box’

By Scott Lindlaw
Associated Press


SACRAMENTO -- Gov. Gray Davis vetoed a bill that would ban new superstores such as Costco from being built in California.

The way the Legislature handled the bill was "deplorable," Davis said yesterday at a news conference. Lawmakers pushed the measure through by waiving rules designed to provide several public hearings.

What Price Paradise? A coalition of supermarkets and labor unions developed the bill in the final days of the Legislature's session, contending such retailers would run local grocers out of business and reduce wages and benefits.

The proposal was the first attempt by a state to resist "big-box" stores, giant retailers such as Costco, Wal-Mart, Kmart and Target.

The bill would have banned local governments from approving new retail stores with more than 100,000 square feet and more than 15,000 square feet of nontaxable merchandise, such as groceries and prescription drugs.

"This veto is a victory for consumers, for California families who want good prices and the right to choose where they shop," said Wal-Mart Stores Inc. spokeswoman Cynthia Lin. "Through letters, petitions and phone calls, Californians sent a loud and clear message to the governor."

Davis said he was less troubled by the substance of the bill than by the fact that it materialized the last week of the session, with little review by legislative committees.

"When you make major public policy changes, they should be subject to public scrutiny and have the benefit of policy committee hearings in both houses," Davis said at an appearance with Irish President Mary McAleese.

A fellow Democrat, Assemblyman Dick Floyd of Harbor City, was the bill's author. He worked on it with the Joint Labor Management Committee of the Retail Food Industry, created last spring by several large supermarket chains and grocery labor unions.

Floyd did not immediately respond to a message left at his office by The Associated Press seeking comment.

Proposal supporters contended that the "big box" stores were destroying communities.

"They make lousy neighbors. They kick up enormous traffic. They're ugly. They ruin neighborhood values. They destroy the center of most hometowns," said Al Norman, who formed a group called Sprawl-Busters after he stopped a Wal-Mart proposed in his hometown of Greenfield, Mass.

"The state and federal government have done very little to help local communities with their zoning battles," Norman said.

Several California cities recently took action against big-box stores.

Voters in Eureka, Calif., last month rejected a proposal to build a Wal-Mart on the waterfront. Five California cities -- Huntington Beach, Arroyo Grande, Paso Robles, Santa Maria and Simi Valley -- have approved big-box restrictions similar to the legislation.

However, the bill put a different spin on the issue. Instead of attacking all big-box retailers, it aimed at those adding large sections to sell food and other nontaxable items.

Costco has 88 warehouse clubs in California and is building five more. Its stores are typically 130,000 square feet with 60,000 square feet dedicated to food and pharmacy.

Wal-Mart has 110 regular stores, which are smaller than the bill's limit and don't carry much food, and 24 Sam's Clubs, similar to Costco.

Wal-Mart has started building Supercenters in other states. Those are typically 120,000 square feet with about a third groceries, said Copeland. There are none in California, he said.

Spokeswoman Leslie Goodman said the Joint Labor Management Committee was concerned about the big-box retailers shifting from retail to food.

She cited a study by University of California, Irvine, researchers, that said the entry of Supercenters run by Wal-Mart into Southern California could depress wages and benefits $500 million to $1.4 billion a year.

Wal-Mart stores are nonunion. Thirty-eight Costco stores in the state are unionized, Costco president Jim Sinegal said.

Goodman said local governments try to lure big stores with tax incentives, seeking the sales tax revenues, but then get burned when the stores switch to groceries, not subject to the sales tax.

The labor-supermarket committee persuaded the Legislature's Democratic leaders to push the bill through by waiving rules designed to provide lengthy public scrutiny. Most other bills underwent at least four hearings, with at least four days of notice to the public for each.

The big-box ban was proposed three days before the legislative session ended Sept. 10.

"This is the Legislature at its worst," Dan Carrigg of the 473-member League of California Cities wrote to Davis, urging his veto.

What Price Paradise?

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