Wal-Mart, seeking to expand in urban areas, may be headed for a setback in L.A. when the City Council votes Tuesday on an ordinance that would make it harder for the world’s biggest retailer to build a Supercenter there.
LOS ANGELES — Wal-Mart, which is seeking to expand in urban areas, may be headed for a setback in Los Angeles when the City Council votes Tuesday on an ordinance that would make it harder for the world’s biggest retailer to build a Supercenter there.
The proposal, which doesn’t identify Wal-Mart by name, requires retailers to prove that so-called big-box stores of more than 100,000 square feet will not harm communities. The measure has been unanimously approved by two Council committees, and Mayor James Hahn supports it.
“We seek not to interfere with the marketplace, but we want to protect neighborhoods and the impact of blight,” Councilman Eric Garcetti said last week.
Wal-Mart has faced opposition in cities such as nearby Inglewood, Calif., where voters in April rejected a ballot initiative to allow construction of a 60-acre Wal-Mart shopping center and make it exempt from most state and local regulations. Opponents of the retailer, which wants to build 40 Supercenters in California in the next four years, have said the projects harm small businesses and lead to increased crime and traffic, among other issues.
The stakes are high, as Los Angeles is the core of a vibrant retail market with a population of 14 million. Wal-Mart’s Supercenters, typically 200,000 square feet or more, with 20,000 square feet of grocery, drive the company’s bottom line. The company’s 1,500 Supercenters in the U.S. reportedly accounted for as much as 40 percent of its $250 billion of revenue in 2003.
Many cash-strapped municipalities have welcomed Supercenters because they generate millions of dollars worth of sales taxes and employment. Six weeks after Wal-Mart lost its bid in Inglewood, the company won City Council approval in Chicago for zoning changes that will allow it to build its first store there.
The Los Angeles measure, proposed by Garcetti and Councilman Ed Reyes, has evolved over the past two years from an initial outright ban on retail giants. The latest version would require retailers to pay for an economic analysis to determine whether such projects would depress wages, damage mom-and-pop stores or contribute to blight. The city would approve or deny plans submitted by an applicant depending on the outcome of the report.
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