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Big-Box Ordinance Passes L.A. Council

LOS ANGELES — The city council here voted 12-1 Wednesday to pass the so-called big-box ordinance, which will require retailers to prove proposed superstores will not harm poorer communities before they are green-lighted for construction.<BR><BR>A...

LOS ANGELES — The city council here voted 12-1 Wednesday to pass the so-called big-box ordinance, which will require retailers to prove proposed superstores will not harm poorer communities before they are green-lighted for construction.

A second and final vote is scheduled for next Wednesday.

The L.A. measure, written by councilmen Eric Garcetti and Ed Reyes, has evolved over the past two years from an outright ban on retail giants in the city. Wednesday’s vote ends months of debate between unions, economists and superstore operators such as Wal-Mart.

“We don’t want to ban any stores,” said Mayor Jim Hahn at a press conference called Tuesday to gather support for the ordinance. “But we have invested millions of dollars into the economic-assisted areas of this city. We’ve invested too much to not ask these questions.”

Economic-assisted areas cover about half the city.

The ordinance does not single out Wal-Mart by name but is aimed at any store that is more than 100,000 square feet with 10 percent of its sales floor devoted to groceries — Target Greatland stores, Kmart SuperCenters and larger grocery stores are subject to the same requirements. But it is clear the world’s largest retailer stands to be most affected by the measure. Wal-Mart is the largest operator of superstores and has plans to open 40 of them in California within the next three to four years. The first Wal-Mart Supercenter in California opened in March in La Quinta. Membership warehouse clubs, such as Costco, are excluded from the ordinance based on a scale of impact that is considered by the city council to be less than that of a superstore.

Wal-Mart has not yet announced plans for a Supercenter in L.A., but on Wednesday claimed the effort, spearheaded by the union, had misfired.

“The union’s two-year-long campaign failed today,” said Peter Kanelos, a Wal-Mart spokesman, referring to the company’s most vocal opponent, the United Food and Commercial Worker’s Union. “The ordinance will allow Wal-Mart to build Supercenters in the City of Los Angeles. We simply view this as additional red tape.”

Although there have been California communities that have resisted Wal-Mart Supercenters — voters in Inglewood in April rejected the construction of one there — L.A. is the first American city to require economic analysis in addition to environmental and zoning requirements.

This story first appeared in the August 12, 2004 issue of WWD.  Subscribe Today.

The ordinance requires retailers to foot the bill for a report that would determine whether the large formats would depress wages, damage mom-and-pop stores or contribute to blight. A retailer can either choose from a short list of consultants approved by the city or hire its own consultant, who would then be subject to city oversight. The city would then approve or deny plans submitted by an applicant depending on the outcome of the report. Potential costs of the process were unknown at press time.

Former L.A. Police Department Chief and Councilman Bernard Parks was the sole holdout in Wednesday’s vote. “This ordinance sends a clear message to businesses that you need to go elsewhere,” he said.

Two more Wal-Mart Supercenters are scheduled to bow next month in California, in Hemet and Stockton.