City urged to consider "big box" law

GreshamFirst says such issues as how a megastore might affect existing business need to be weighed alongside existing rules

Thursday, July 21, 2005
CATHERINE TREVISON

GRESHAM -- During the first meeting for neighbors on a proposed Gresham Wal-Mart, some of the hundreds of people against the store yelled their opposition, fists clenched and faces red.

But when the shouting was over, many realized the city's development rules were deaf to part of their debate.

Those development rules deal with the physical reality of a new business, from traffic to pollution to landscaping. But plenty of neighbors were voicing other fears, such as how the proposed supercenter -- a 142,791-square-foot discount store with a 42,631-square-foot grocery -- would affect existing businesses.

"The city planner said, 'I can't address those concerns,' " said Javon Gilmore, a spokeswoman for GreshamFirst, the group opposing Wal-Mart's Gresham proposal. "That's really significant. For a lot of people, that is the problem."

Now GreshamFirst is asking the city to consider a "big box" law that would tackle those issues head on. A new law wouldn't affect existing applications, including the supercenter that Wal-Mart has proposed on Powell Boulevard. But it could affect which stores come to Gresham in the future.

Cities have tried to regulate the scale of buildings since the dawn of zoning, said Stacey Mitchell of the New Rules Project, which collects and promotes policies that favor "community-based enterprise." But the number of regulations singling out big retailers has accelerated dramatically in the past 15 or 20 years, as big box chains have expanded, she said.

These new rules come in at least three main flavors and various combinations, she said. Some cities ban stores that exceed a certain limit -- a 45,000-square-foot limit in Ashland, for example, or a 150,000-square-foot limit in Santa Fe, N.M. Others cap the amount of space that a very large store can devote to food. Still others, such as GreshamFirst's proposal, would require a big box developer to pay for an independent analysis of the economic impact of the store.

Not too big

Straightforward size caps are rarely challenged after they're passed, said Mitchell, who recommends them to many communities.

"If you're a small town, you only have so many retail dollars to go around," she said. "Do you want a single player to become that dominant?"

But size-cap proposals can be opposed by people who see them as anti-growth.

"You run the risk of throwing the baby out with the bathwater," said Gresham-based shopping center developer Fred Bruning. "How do you differentiate a Macy's from a Wal-Mart? Wal-Mart is a big traffic generator and has an impact on local businesses. I'm not denying that happens. But there are other users like a department store that might get caught up and hoisted by the same petard."

That's one reason GreshamFirst rejected the size-cap approach, Gilmore said.

"We're not opposed to development," Gilmore said. "We're looking for responsible smart growth that will give back to the community. If there's something like that, we'd like to see that corner occupied" at Powell Boulevard and 182nd Avenue.

Limit on food

Rules that limit the area devoted to food essentially target supercenters -- the stores that marry general merchandise departments with full-size groceries. Opponents say these rules discriminate -- and they've taken them on both in court and by ballot initiatives.

One example is Turlock, Calif., where the city council passed a grocery limit for big boxes at the beginning of 2004. City councilors feared a supercenter would ruin plans for neighborhood-centered commerce that people could reach by foot and bike, said Turlock's planning manager, Michael Cooke.

Wal-Mart sued in both federal and state courts, saying the city was using zoning to try to regulate business competition. Although a state judge ruled the city's limit was reasonably related to its desire to limit traffic, blight and pollution, Wal-Mart is appealing. The federal case is pending.

Another example is Flagstaff, Ariz., where the issue ended up before voters. The city council had passed a big-box ordinance with several requirements, including a cap on floor space for grocery items. Opponents, backed by more than $280,000 from Wal-Mart, launched an initiative to get the issue on the ballot. In May, the ordinance was defeated by a tight margin.

Effect on taxpayers

The third approach, requiring an economic impact analysis for large stores, is a relatively new trend. It didn't hit Oregon until this spring.

A few areas in the state have adopted size caps, including Hood River County and Oregon City, said Greg Hathaway, a land-use lawyer who represents Wal-Mart in Oregon. Central Point adopted a size cap that was later overturned, he added.

But Hathaway hadn't seen an Oregon proposal for analyzing the economic impact of large stores until this March. That's when state Sen. Charlie Ringo, D-Beaverton, asked the Legislature to consider that idea for the area near Beaverton where Wal-Mart was considering a store.

In May, Gilmore brought the idea to a group of neighborhood association leaders in Gresham; they agreed to ask the City Council to look into it.

Hathaway said Wal-Mart has nothing to fear from a real economic analysis. He said some studies show the company helps attract customers to other nearby businesses and does not put good competitors out of business. Wal-Mart notes that its supercenters employ about 400 people, and says its low-price competition means all consumers save on grocery bills when Wal-Mart arrives.

GreshamFirst says some research shows Wal-Mart does put others out of business and eliminates as many jobs as it creates "because consumer spending is a relatively fixed pie." The group raised questions about the company's wages, health insurance, and use of public services such as police and fire.

"We felt there was a hole in the development code where we couldn't address cost to taxpayers," Gilmore said.

Several cities have adopted economic analysis rules, from Vermont to California. But so far, experts know of only one city -- Homer, Alaska -- that has actually put it into action by requiring an economic impact analysis of a proposed Fred Meyer.

An economic analysis of a retailer can be difficult, said Dan Houston, a partner in the Texas-based firm of Civic Economics, which is performing the Homer study. The numbers don't just deal with what happens within the four corners of the store, but also how that store will affect other retailers and the city's coffers over the course of several years.

The analysis in Oregon may differ from that in other states because there is no sales tax here, Houston said.

Some criticize this approach as tantamount to a ban because it would discourage retailers from applying in the first place. Houston said if the underlying retail market is good, businesses will jump through hoops to enter it.

Bruning, the Gresham-based developer, fears an economic analysis requirement could lead to lawsuits about how the analysis was performed.

"It's a noble idea. In the execution, it might come undone," he said.

Others say city-by-city ordinances don't help; a big box turned away by one town can try the one next door. It makes more sense to attempt these kinds of rules on the state level, Gresham City Councilor Paul Warr-King said.

Gilmore said she hoped regional and state leaders would get involved.

However, the community "is where our first step is," she said.

Catherine Trevison: 503-294-5971; ctrevison@news.oregonian.com
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