Low Prices, Blighted Suburbs 

Contra Costa County wants to ban Wal-Mart's biggest store. The future of retailing and a new kind of poverty are at stake.

John Gioia has seen the future, and its name is Wal-Mart. While driving across the country recently, passing by the strip malls and subdivisions of Middle America, he saw the discount retail giant's most ambitious project: the Supercenter. At a scale of up to 228,000 square feet, the Wal-Mart Supercenter dwarfs every other big-box store that has come before it. Nothing else so dramatically exemplifies the company's strangely prosaic grandeur.

Wal-Mart has been opening Supercenters since 1988, but up to now, California has been untouched. That's about to change. According to company spokeswoman Amy Hill, Wal-Mart is opening Supercenters in Tracy, Yuba City, and Gilroy, luring untold thousands of shoppers to the fringes of the Bay Area and changing the face of California retail forever. Wal-Mart currently operates three stores in Contra Costa County and plans to open a fourth at Richmond's Hilltop Mall. But a county of 1 million people, whose median household income is more than $63,000, could buy a lot more cheap consumer goods than just four stores can offer, and Gioia is convinced that Wal-Mart intends to drop a Supercenter in Contra Costa sometime soon.

If Wal-Mart's Supercenters colonize Contra Costa County, Gioia worries that the discount retail giant will deal a body blow to its competition, wiping out hundreds of union jobs, depressing wages, and sapping the vitality from downtowns and older commercial districts. So he's determined to put a stop to it. After all, Gioia isn't just any chump. As a member of the Contra Costa Board of Supervisors, he recently pushed through legislation banning all Wal-Mart Supercenters on unincorporated county land. Along the way, he has provoked the greatest electoral battle in the company's history.

Food is the key to the success of Supercenters. Unlike other Wal-Mart stores, Supercenters offer cheap groceries to lure in shoppers, and once they start wandering through the aisles, people who set out to buy a loaf of bread suddenly find themselves blowing a wad on a toolbox or stereo component. That's where Wal-Mart cashes in.

And that's what's Gioia says he doesn't like. If Wal-Mart were to build a Supercenter on unincorporated land, the county would be on the hook to build and maintain the access roads and other infrastructure. These roads would get far more than their share of use, but because groceries are not subject to sales taxes, the county wouldn't be able to use sales tax to finance their upkeep. So the county would get nightmare traffic without the sales tax to deal with it. "The impacts in terms of traffic and air quality are substantial, and yet you don't recover tax revenue to mitigate the negative impacts of those facilities," he says. "So it's a planning ordinance."

This isn't the real reason Gioia has picked a fight with Wal-Mart -- which is fine, since it's not a very strong argument. But that is ostensibly why the Board of Supervisors voted on June 3 to ban all stores larger than 90,000 square feet from devoting more than 5 percent of their floor space to nontaxable items, thus barring Supercenters from unincorporated county land.

Immediately after the vote, Wal-Mart officials spent $100,000 collecting enough signatures to force the board to either rescind its ordinance or put it on the ballot and let the voters decide. Wal-Mart spokeswoman Hill claims that, far from being an attempt at sensible planning, Gioia's ordinance is just a sneaky favor for the United Food and Commercial Workers Union, which represents grocery clerks at Albertsons and Safeway, the chains mostly likely to suffer if Wal-Mart Supercenters move in on their action.

"This ordinance was brought to Contra Costa by the UFCW, which is the grocery union," she says. "It's anticonsumer and anticompetition. ... They have definitely tried to stop our development, and it's due to a frustration by their inability to organize in our stores. More than a million people in the US work for Wal-Mart, and about 100,000 are eligible for union membership. That's a lot of potential dues, and they are a business, too." On July 2, Wal-Mart officials turned in almost twice the number of signatures they needed, and county supervisors are expected to place the ban on the ballot next week.

Wal-Mart is a battle-hardened veteran of such wars. In many cities, local leaders have tried to keep out the discounter, only to be overwhelmed by the vast amounts of money it can throw into such a campaign. Although Wal-Mart has faced occasional setbacks in exceptional cities such as Eureka, it has beaten back similar ordinances in Calexico, Inglewood, and Clark County, Nevada. According to company critic Al Norman, Wal-Mart will spare no expense to overturn such an ordinance, blitzing voters with every imaginable campaign strategy. "Voters better fasten their seat belts, 'cause they'll get hit with several full-color mailings, they'll be telemarketed, they'll create some citizens group, like Citizens for Economic Development," he says. "In some cases, like in Texas, they've even produced little three-minute videos and mailed them to people." And those were just the small markets. In the company's entire history, no market as big or rich as Contra Costa has ever challenged it, Hill notes.


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