Big-box theory

The debate over Sacramento's superstores ordinance isn't really about whether you love Walmart or loathe it, or whether you believe Sacramento is “business friendly” enough. It's really about information.

All kinds of questions arise when a big-box store sets its sights on a community.

What impact is that new Walmart going to have on the local grocery store? Will it undercut local business with lower prices, but also with lower wages and benefits?

You can guess the answers to these questions. You can call Walmart and ask them. You could go on Facebook and ask your friends; surely, they'll come back with all sorts of links from the Democratic Underground and The Huffington Post.

But you won't get any real information that way. For actual data on local impacts, you need an economic-impact analysis, and a wages and benefits comparison.

That's really all that is required by the city's current superstore ordinance¡ªinformation. The rules kick in automatically for any big-box store more than 90,000 square feet, if that store also sells groceries. (Some bulk retailers and membership clubs like Costco are excluded.)

Business groups like Region Builders and various chambers of commerce say doing this analysis and disclosing it to the public is too “onerous” for big-box developers.

They want city council to repeal the five-year-old ordinance and do away with the automatic economic analysis for box stores, and they don't want the city to any do wage and benefit analysis at all as part of the land-use process. They say the current rules have already prevented several big-box stores from locating inside the city.

Not everyone would agree that's a bad thing, or even that it's true. But what exactly is it that is so onerous about the superstore ordinance?

It's not the cost. City staff estimates economic-impact studies cost $50,000 to $100,000 each. But full development applications costs hundreds of thousands of dollars, and that's not going to change. (And besides, the Walmart company makes $50,000 in about two minutes.)

City planner Scot Mende says the real burden to business is uncertainty. By introducing an analysis of wages and benefits, “It's a known process vs. an unknown process.” Information.

Some argue it's a more political process. Certainly, it was city council politics circa 2006 that brought us the superstores ordinance. Same politics that kept a Walmart from opening in Downtown Plaza back then.

But so what? Repealing the ordinance is political, too: Consider the extensive lobbying done on the issue by Region Builders and the California Retailers Association.

And there's nothing whatsoever in the ordinance that prevents a big-box store from opening a store in the city, just because they pay crappy wages. It merely requires that information and analysis be given to the public.

Bites' neighborhood is nothing fancy. But it's got a union grocery store that pays enough for some workers to buy some of the modest houses nearby. That's good for the neighborhood. Likewise, there's a busy independent hardware store that helps neighbors fix problems in those modest houses. What's wrong with asking about the impact on these places from “category killers” like a Walmart?

“It may be useful information for consumers,” said Mende. “But it has a chilling effect on applications.”

Mende said the city council would still have discretion to require an economic analysis in some cases, for example, “If a large-format store is proposed in the Midtown area.”

And no doubt folks in specially protected and connected neighborhoods like Midtown would ask for, and get, their economic-impact studies. But what about the rest of us?

Some people think Mayor Kevin Johnson ought to recuse himself from voting on the superstore-ordinance repeal, given that Walmart pumps so much money into StudentsFirst, the anti-teacher-union lobbying group founded by Johnson's wife, Michelle Rhee. The Walton Family Foundation (named for the family that founded and controls Walmart) recently committed $8 million to Rhee to help bust unions and privatize public schools and push for more student testing.

That's a lot of money. But Bites thinks this misses a more direct conflict of interest. After all, the Walmart people give plenty to the mayor directly.

In 2012, the Walton Family Foundation gave $500,000 to K.J.'s Stand Up nonprofit. That was part of the much larger chunk of money that Johnson illegally failed to disclose last year, until reporters started poking around. The separate Walmart Foundation also gave $25,000 to Councilman Jay Schenirer's WayUp Sacramento nonprofit. Not Johnson's level to be sure, but he's learning. He's learning.

The superstore issue highlights just how remarkable this end-runaround campaign-finance laws really is. Do we want companies like Walmart funneling unlimited dollars to city council members while they vote on policies like the superstore ordinance? Would it be too “onerous” for business to regulate that as well?