Friday, December 17, 2010

Combating Walmart With the San Diego Model

We're all aware that the Walmart narrative is all about the supposed economic benefits of the retail giant-in a word: jobs. But communities all over the country are beginning to realize that this story is more of a fable than it is an accurate gauge of the benefits that localities receive from the entry of Big Wally. No one has done more to deconstruct the Walmart (big box) myth than Stacy Mitchell. Her New Rules Project, details the manner in which box stores drain local resources-and how independent neighborhood businesses, in the aggregate, are more robust contributors to local economies.

In a recent post, New Rules highlights how San Diego is legislating to preserve its local economy-and its statute should provide a guide for New York as it contemplates the invasion of the Walmonster:

"San Diego enacted, in 2007 and 2010, two separate ordinances that require the city to review the economic and community impact of large-scale retail development proposals before deciding whether to approve them. In 2007, the city adopted a Large Retail Ordinance. It requires that proposed stores over 50,000 square feet obtain a Neighborhood Development Permit, and those over 100,000 square feet obtain a Site Development Permit. (The measure also applies to expansions of existing retail that would result in a store larger than these size thresholds.) A Neighborhood Development Permit cannot be approved unless the city determines that the project is consistent with the its General Plan and would not adversely affect the public welfare. The decision is made by city staff with the opportunity for the decision to be appealed to the planning commission."

Of course, the city leaders in San Diego have a much more heightened sensitivity to the importance of indigenous business than do the Bloombergistas-and NYC small business isn't even an afterthought for the city's EDC officials. And check out the following San Diego mandate-something that will shock our small business desensitized NYC souls: "The Economic Prosperity Element of San Diego's General Plan calls for, among other things, promoting "economically vital neighborhood commercial districts that foster small business enterprises and entrepreneurship" and development that results in "a higher standard of living through self-sufficient wages and an increase in citywide real median income per capita." It also notes the problem of excessive retail development and the potential for commercial blight, and favors limiting the amount of land designated for commercial development."

Now that's real sustainability planning-unlike the faux efforts by the Bloomberg administration. Along with this, is a strong review process
that insures a real guage of a project's economic impacts: "The General Plan itself establishes the need for a review process for large-scale development. It notes the importance of "an informed public decision-making process providing economic information to the public and decision-makers" and specifically calls for economic impact review for retail development projects over 100,000 square feet."

But the city doesn't stop there-and this year has added a layer of further review for superstores: "In November 2010, the city of San Diego enacted a second ordinance the requires any proposed superstore — defined as a retail establishment of 90,000 square feet or more that devotes 10 percent or more of its floor area to nontaxable merchandise (i.e., groceries) — to obtain a Site Development Permit (SDP). The measure creates additional review criteria for these stores and requires a more extensive study."

The barriers to entry are intriguing-as are the elements of the site development plan: "An SDP for a superstore cannot be approved unless the relevant government body makes a finding that the proposed store will not:
  • increase neighborhood blight;
  • adversely affect the city's neighborhood and small businesses;
  • negatively impact the city's Business Improvement Districts, Redevelopment Areas, or Micro Business Districts; or
  • adversely affect the character of the surrounding area.
For those of us who have railed against over development in NYC-and especially mega retail-this is nothing short of revolutionary. Imagine, evaluating a small business impact. But as good as the SD protocol is, it is only as good as the consultants hired to gauge the impacts: "To help the city make this determination, the ordinance requires that the developer pay for an economic and community impact analysis conducted by a consultant approved by the city." Which only works well in a city that truly cares for these kinds of things.

As we have argued, it is essential that the consultants chosen are truly independent of both the developer, and the city's economic development agency that has been nothing but a hand maiden for those same developers. In NYC there is no real distinction between the two classes; as we have seen with the Willets Point EIS and ramp reports, and the Flushing Commons EIS that are both performed by the same cohort of consultants even though the first was done under the aegis of EDC and the latter by the developer TDC.

The San Diego parameters are, however, still quite good: "This analysis must include, at a minimum, an assessment of:

  • the extent to which the proposed superstore will capture a share of retail sales in the economic and community impact area.

  • how the construction and operation of the proposed superstore will affect the supply and demand for retail space in the economic and community impact area.

  • the number of persons employed in existing retail stores in the economic and community impact area, an estimate of the number of persons who will likely be employed by the proposed superstore, and an analysis of whether the proposed superstore will result in a net increase or decrease in employment in the economic and community impact area.

  •   the costs of public services and public facilities resulting from the construction and operation of the proposed superstore and a description of how those services and facilities will be financed.

  • the public revenues resulting from the construction and operation of the proposed superstore.

  • the effect that the construction and operation of the proposed superstore will have on retail operations, including grocery or retail shopping centers, in the same economic and community impact area, including the potential for blight resulting from retail business closures.

  • And this is just a partial list-but you can get what San Diego's leaders care about. There is a real concern for sustainability and community quality of life that is missing in NYC: "The primary purpose of the ordinance is to protect the economic viability of the city's neighborhood commercial districts, which could be negatively impacted by large-scale retailers. The ordinance also aims to protect the community from blight, increased traffic, reduced air quality, and a decline in the city's financial health that could undermine the provision of public services. The ordinance closely aligns with the goals of San Diego's General Plan, which includes a "City of Villages Strategy" aimed at steering growth to mixed use centers that are pedestrian-friendly. San Diego's general plan also calls for promoting "economically vital neighborhood commercial districts that foster small business enterprises and entrepreneurship" and retaining "the City's existing neighborhood commercial activities and develop new commercial activities within walking distance of residential areas." (emphasis added)

    NYC is a city of neighborhoods-and its 200 neighborhood shopping strips are treated with disdain by the Bloombergistas-taxed twice in Business Improvement Districts that have eroded the political clout of small retail businesses. The invasion of Walmart would do incalculable damage to this neighborhood diverse city that Mike Bloomberg rarely sees and little appreciates-exacerbating the trend of mega retail that he has promoted from his first day in office-orchestrated by smarmy Deputy Dan Doctoroff.

    What we need is for the NYC Council to adopt San Diego Rules, rules that promote sustainability and a livable, pedestrian-friendly city of  "economically vital" neighborhoods. A proliferation of Walmonsters is a nightmare scenario for New York and whatever low prices it might bring would be more than offset by the colossal damages it would cause.