Big-box foes push for more legislation - legislation proposed in San Francisco to require conditional-use permits from large retailers - Brief Article

DSN Retailing Today, Feb 25, 2002 by Doug Desjardins

SAN FRANCISCO -- Large retailers looking to expand their reach are facing a new wave of anti-big-box legislation geared to keep them out of small towns, large cities and, in some cases, entire states. The newest battleground is San Francisco, where local opposition to a proposed Home Depot has produced legislation that could make it difficult for large stores to open within city limits.

The law proposed by San Francisco Board of Supervisors president Tom Ammiano would require a conditional-use permit for any retailer looking to build a store larger than 50,000 square feet. It would require a special review process to address a wide range of issues, including increased traffic and the impact the store would have on nearby small businesses (the law would exempt supermarkets).

An aide for Ammiano said the law is designed to protect the interests of local residents and to update local zoning laws. "There's no process in place right now that specifically addresses the impact stores this size could have," said aide Brad Benson. "As it stands, if a small business wants to add an additional 3,000 square feet, it triggers the same review process as a new Home Depot."

Though no action is expected on the legislation until early fall, when an environmental impact review is completed for the proposed 150,000-square-foot Home Depot, company officials are concerned about the effect it could have on a project they believe would help the area.

"This project would create jobs and be a great economic engine for a very depressed area of San Francisco," said Home Depot spokeswoman Yvette Davis. "What supervisor Ammiano has done is drafted legislation at the behest of a small group of residents and business owners who don't want a Home Depot near their neighborhood."

Benson agrees that opinion is divided among residents who live near the proposed Home Depot site, which sits on an old lumberyard on Bayshore Boulevard. "We're continuing to work with two neighborhoods, one that wants it for the jobs it would create and the other that's worried about the traffic impact," he said.

Another retailer that may have to deal with the law is Target, which is proposing to build its first store in San Francisco on a site south of Market Street.

Though the controversy over Home Depot is something new to San Francisco, which has had little experience with large retailers, it's a common scene to industry insiders who track legislation targeting big-box chains.

"The only unusual thing about San Francisco is the size of the stores being targeted because 50,000 square feet is not very big," said Jason Todd, manager of state government affairs for the International Mass Retail Association. "Usually, the laws affect stores in the 80,000- to 120,000-square-foot range."

California has been fertile ground in recent years for anti-big-box legislation. In 2001, the cities of San Diego and Los Angeles both considered laws that would have limited the amount of space large retailers could devote to grocery items (both were defeated). A similar bill was actually passed by the California State Assembly in late 1999, but was later vetoed by Gov. Gray Davis. All three proposals were backed by the state's major supermarket chains and their unions.

But the more common scenarios are similar to the one being played out in San Francisco, with local residents and small business owners pushing for laws that either ban big-box retailers or make it difficult for them to enter an area. "Most of these laws are variations on the same theme," said Todd. "It's just the wording of the laws and the size of the stores they target that are different."

Laws that would restrict or ban big-box retailers are now being considered in other cities and states. They include: Agoura Hills, Calif., where residents on March 5 will vote on a measure that would ban construction of any store larger than 60,000 square feet in the city. The measure was drafted by residents against construction of a Home Depot in the city of 21,000 outside Los Angeles; and Maryland, where state officials are considering Senate Bill 684, which would ban construction of stores larger than 120,000 square feet. The bill is currently being reviewed by a state committee.

Though anti-big-box laws have had little impact to date on the retail industry, they're an ongoing concern to major players like Home Depot and trade groups like IMRA, which oppose them on principle and worry successful passage of one law could set a dangerous precedent.

"We're against this type of legislation because the government shouldn't be in the business of telling Wal-Mart or Kmart where they can or cannot build," said Todd. "The laws discriminate against large retailers and they ultimately hurt the consumer."