Court Upholds Superstore Ban in Turlock, CA

By John Holland 
First published by the Modesto Bee, Dec 22, 2004

TURLOCK – A Stanislaus County Superior Court judge has upheld a city ordinance that kept Wal-Mart from building a supercenter near Fulkerth Road.

Judge Roger Beauchesne rejected Wal-Mart’s claim that the ban illegally interfered with retail competition.

The judge said the stated goals of the nearly year-old ban – preventing traffic jams and protecting neighborhood grocers – were “reasonably related to the public welfare.”

The nine-page ruling was delivered to the city and Wal-Mart on Monday.

“It’s very encouraging,” Mayor Curt Andre said Tuesday. “This is about being able to be responsive to the voters and the values of the community.”

Wal-Mart spokesman Peter Kanelos said the chain’s management had not decided whether to appeal the ruling. It resulted from a lawsuit filed by the company in February, a month after the City Council approved the ban on a 5-0 vote.

“We strongly believe that the impact of this ordinance will be to limit consumer choice,” Kanelos said.

He noted that a federal judge had yet to rule on a parallel lawsuit charging that the ban violated Wal-Mart’s right to conduct commerce under the U.S. Constitution.

Wal-Mart, which has had a 125,000-square-foot store on Fulkerth since 1993, proposed last year to build a 225,000-square-foot supercenter nearby. The larger store would have combined the department store selections of a conventional Wal-Mart with a full-service grocery section.

Backers cite congestion, blight
Backers of the ban said the proposed store would worsen congestion as customers made frequent crosstown trips to buy groceries. Backers also said the store could lead to the closure of supermarkets that anchor small shopping centers around the city – a change that could bring “blight” to the neighborhoods.

The debate was among the fiercest in Turlock in recent years, drawing overflow crowds to Planning Commission and council meetings last year.

“The main issue I had against Wal-Mart was that they were trying to force their way into a city that didn’t want them,” Jacqueline Hollcraft, a Turlock homemaker, said Tuesday. “If a city wants them, that’s fine for that city.”

Some opponents brought up the nationwide debate over Wal-Mart wages and benefits – are they adequate?

People who opposed Turlock’s ban said city shoppers would lose out on Wal-Mart bargains, and the city would lose out on sales tax.

“I think there was a great opportunity to get an enormous amount of sales tax to go to their budget, which they are in dire need of,” Bob Santo, a retired sales representative for the American Automobile Association, said Tuesday. “I also think (Wal-Mart) employs a lot of people.”

Wal-Mart, the world’s largest retailer, has more than 1,200 supercenters but only recently brought the concept to California. One of the stores opened in Stockton in October, to little protest. Lodi voters last month rejected a measure that would have hindered plans for a store there.

Officials in Oakdale and Riverbank have talked about the impacts that supercenters might have, though no such stores have been proposed in those cities. On Monday, the Oakdale City Council passed new rules regulating “big-box” stores.

The Turlock ordinance bans most new or expanding discount stores that exceed 100,000 square feet and devote at least 5 percent of the space to groceries and other nontaxable items.

The ordinance exempts membership stores, such as the new Costco Wholesale near Monte Vista Avenue, on the grounds that their customers shop infrequently and buy in bulk, and therefore do not jam traffic.

Wal-Mart claimed that the ordinance singled out the retailer and violates state law by using zoning powers to regulate business competition.

According to the lawsuit, Turlock officials at first welcomed a supercenter but then moved to ban it after meeting with executives from competing grocery chains and a leader in the grocery workers union.

Judge sees legitimate concern
City officials said such meetings are a proper way of hearing the views of constituents.

Beauchesne cited appellate rulings in other cases in concluding that the ban is valid. He acknowledged that it will affect grocery competition, but said Turlock officials had “a legitimate concern for blight, traffic congestion and its resulting air pollution.”

“The fact that the ordinance does or will have an incidental effect on competition is irrelevant so long as there is otherwise a valid purpose in enacting the ordinance,” the judge wrote.

Wal-Mart argued that the ban forces residents to go to multiple stores for groceries and other items, thus producing more traffic and air pollution than if they did one-stop shopping at a supercenter.

Under state law, the lawsuit stated, these environmental effects had to be studied before the council could enact the ban.

City officials said no environmental study was needed, because the ordinance was simply a means of carrying out land-use policies outlined in the Turlock general plan, which had its own environmental review.

Beauchesne agreed.

The council so far has authorized $130,000 in payment to the Oakland law firm defending the city against the Wal-Mart lawsuits. The expense spurred protests from some residents, but Andre said the money is being well-spent.

© 2004 Modesto Bee

Update, April 2006: A California appeals court upheld this ruling after an appeal by Wal-Mart.

For those seeking to learn more about legal tools for controlling the impacts of chains, we suggest visiting NewRules.org. To learn about community alliances to support community-based business, see AMIBA.net.

Index of articles and studies on Wal-Mart and big box stores