The Los Angeles City Council on Tuesday overwhelmingly backed a proposed
law that would make it harder for Wal-Mart to erect superstores in the
city by requiring the company to study whether surrounding areas would
be harmed by the addition of the mammoth centers.
City officials
pushing the law believe that Wal-Mart may have a tough time showing
that its mega-stores would have a positive impact on communities, which
could give the City Council a reason to reject them.
But Wal-Mart
officials declared Tuesday that the proposed law was a win for the company,
saying the firm kept Los Angeles from adopting an all-out ban on the
Supercenters -- 200,000-square-foot stores that combine the traditional
discount offerings with groceries.
Under
the ordinance, retailers wanting to build stores larger than 100,000
square feet that devote more than 10% of their sales floor to food and
other nontaxable items would have to pay for an economic analysis. The
report would forecast whether a proposed store would eliminate jobs,
depress wages or harm neighborhood businesses in many parts of the city.
"This
is highly significant," said Nelson Lichtenstein of the Center
for Work, Labor and Democracy at UC Santa Barbara. He added that the
law, which has the support of 13 of the 15 council members, could help
transform the way the world's largest company does business.
The council
gave its initial approval to the law Tuesday and will vote today on
the actual ordinance, which applies not only to Wal-Mart but also to
other retailers, such as Target.
The ordinance
could become effective as soon as September.
Labor
leaders and their allies on the council hope the law will become a national
model. Since the nonunion Wal-Mart announced plans to build 40 Supercenters
across California, unions and some local governments have battled the
Bentonville, Ark., company.
Tuesday's
City Council vote on the issue, one of labor's top priorities, comes
in the midst of a mayoral election campaign in which two candidates,
incumbent James K. Hahn and Councilman Antonio Villaraigosa, are vying
for union support. In 2001, when the pair also faced off, Villaraigosa
had the backing of much of organized labor.
Hahn and
Villaraigosa both support the proposed law.
Two years
ago Councilmen Eric Garcetti and Ed Reyes proposed banning superstores
in economically depressed areas of the city, but later scaled back their
measure.
Speaking
by cellphone from the barbecue section of the Wal-Mart in Baldwin Hills,
company spokesman Peter Kanelos said, "Organized labor and other
special interests have failed in their objective."
He said
Wal-Mart had already provided a huge economic boost to three Los Angeles
neighborhoods with its discount stores.
Bernard
C. Parks, the only council member to vote against the policy, said it
would "make it rough ... to do business in L.A." and would
send businesses and jobs to other cities that would absorb them like
a sponge."
Parks,
who is running for mayor as a pro-business candidate, said the Baldwin
Hills shopping center sat half-empty for five years until Wal-Mart opened
a store there last year. Now, the area has sprung back to life, he said.
"There's
a whole lot of folks in Los Angeles that would give their left arm for
a $9-an-hour job," he said.
But many
labor and community groups believe that the discount retailer has a
devastating effect on local communities, depressing wages, driving out
existing businesses and creating nightmarish traffic.
On Tuesday,
some pointed to a UC Berkeley Labor Center report released last week
that said Wal-Mart cost California $86 million annually in state aid
by giving its workers inadequate wages and benefits. Wal-Mart dismissed
the report as biased.
The specter
of the coming Supercenters also fueled the longest supermarket strike
in Southern California history last fall and winter, as union employees
protested health-benefit reductions that the supermarkets said they
needed to hold their own against Wal-Mart.
Some California
municipalities have enacted bans that would prohibit superstores, prompting
Wal-Mart to fight back. In the Bay Area's Contra Costa County and the
border town of Calexico, the company sponsored referendums and persuaded
voters to repeal the bans. In Alameda County and the San Joaquin Valley
city of Turlock, the company filed lawsuits.
In Inglewood
earlier this year, Wal-Mart tried a different tack. The company sponsored
a sweeping initiative that would have allowed construction of a shopping
center the size of 17 football fields without normal city input. Voters
defeated the idea soundly.
The lesson
Los Angeles officials took from these battles was that communities were
more likely to support tighter control over development than outright
bans. A month after the Inglewood vote, Los Angeles officials decided
to retool their ordinance to require companies to pay for reports on
the economic impact of the proposed developments.
The reports
would be submitted to the city's Planning Department and would be considered
by the City Council.
Membership-based
stores such as Costco and Sam's Club, which is owned by Wal-Mart, would
be exempt.
At the
state level, Sen. Richard Alarcon, who is also running for mayor of
Los Angeles, has introduced a proposal that would make reports similar
to those in the city's ordinance mandatory statewide.
Gov. Arnold
Schwarzenegger said Tuesday that decisions on whether to build Wal-Mart
stores should be left to individual communities.
"In
most cases in America, the communities welcome them because you have
cheaper prices and you have great additional employment," he said.
"But in some communities, there's the argument: 'I like my little
store, where they hand-make the ice cream and you still go shopping
the way you did in the old days.' "
California's
first Supercenter opened this spring in La Quinta, and others are slated
to open in Hemet and Stockton in the fall.
Labor
and city officials in Los Angeles stressed that the ordinance would
protect vast swaths of the city that have been declared economically
vulnerable.
"Fundamentally,
this is about land use and about blight," Garcetti said. "We
have a flexible, thoughtful, rational ordinance that says ... we have
a basic right to comment on what happens in our communities."
As assembled
opponents of Wal-Mart cheered in the audience, Councilman Martin Ludlow
added some sharp words for the company itself.
"I
think we have a moral obligation to vote this vote today," he said,
"to send a message loud and clear that we are open for business,
but we are not open for abuse."
Councilman
Greig Smith recused himself, saying he owned stock in Wal-Mart.
In contrast
to past hearings on the ordinance that have been packed with partisans
on both sides of the issue, no one spoke against the measure Tuesday.
Wal-Mart
spokesman Kanelos said officials would "reserve all of our options"
as they saw "how this ordinance is applied and make sure it is
applied fairly and equitably to all businesses."
Some analysts
were perplexed by Kanelos' attempt to portray the council vote as a
victory, and predicted that the company would fight hard if the council
used the reports to keep Supercenters out of the city.
"That's
the kind of victory where, if you have many more of them, you're going
to want a defeat now and then," said Harley Shaiken, a geography
professor at UC Berkeley who studies labor and the political economy.
"For Los Angeles, this is something that concerns the city. But
for Wal-Mart, this concerns all of California and other places as well."
Times
staff writers Noam N. Levey, Abigail Goldman and Peter Nicholas contributed
to this report.
