Open For Business

Banning big-box was a bad idea anyway

Back Commentary Oct 1, 2013 By Winnie Comstock-Carlson

I don’t think anyone can dispute the fact that local consumer demand is what drives the success of big-box stores. And, overall, I believe that success has brought more positives than negatives.

Back in 2004, then-Gov. Arnold Schwarzenegger wisely vetoed a bill requiring so-called “big-box” stores to do tons of research about their impact on municipal services, the environment and local businesses before they would be permitted to build new facilities.

That failed legislation was part of a national backlash against superstores moving into communities and attracting consumers with their lower-cost, one-stop-shopping format.

Unfortunately, it was also a model for laws in a handful of California cities, including Sacramento. Here, the ordinance on the books required extensive analysis and added an additional layer of regulation for the largest superstores. It essentially amounted to a ban on big-box stores — a ban that pushed development, business, tax revenues and jobs to surrounding jurisdictions, where some 35 superstores now serve regional shoppers.

Now, I’m glad to say, the Sacramento City Council has struck down most of that ordinance. In late August, after weeks of study and public meetings, the Council voted to end requirements that superstore chains conduct wage and benefit studies of nearby businesses before being permitted to build new facilities.

Economic impact studies requiring big-box chains to survey the impact of new superstores on tax revenue and nearby businesses will still be needed for some retailers.

But the requirement will be waived in two important categories: major planned developments for which the City Council has already approved large-scale retail projects (such as the Delta Shores project in North Natomas), and “food deserts,” areas of the city with limited access to fresh produce and groceries.

Predictably, labor unions were the strongest supporters of retaining the existing law, lambasting big-box stores, especially nonunion Wal-Mart, which they claim mistreat workers and undermine local businesses. Others accuse the superstores of homogenizing and weakening communities.

But, I don’t think anyone can dispute the fact that local consumer demand is what drives the success of big-box stores. And, overall, I believe that success has brought more positives than negatives.

First of all, these superstores have increased consumer choice and lowered consumer costs while increasing retail productivity and innovation. Second, their lower prices boost retail sales — and therefore taxes — in host communities. Third, big-box merchants who build on previously undeveloped land increase local property tax revenue.

Yes, superstores have disrupted the retail landscape during the past two decades of their aggressive growth. But, they now face a similar disruption from Internet retailers (Amazon in particular) who are luring customers with even lower prices and greater convenience.

These are natural market cycles that should be as unrestricted as possible. I’m not saying we should do away with all restrictions. In Sacramento, for example, there are still zoning codes and land-use policies that limit development based on the overall strategies for particular neighborhoods, traffic density and the like. I call that sensible planning.

What is not sensible are unnecessary and burdensome rules that stifle market competition. Eliminating costly hurdles to retail development is one more step in City Hall’s plan to be more business-friendly, which also includes revamping antiquated zoning codes and making it easier to get business permits.

All of these steps are good for companies and the economy, good for consumers and good for the city. I applaud the City Council for making it clear that Sacramento is open for business.

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