SAVE ATASCADERO UPDATE
December 2, 2011
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Editor: Lee Perkins
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WAL MART STATUS IN ATASCADERO
- ARTICLES IN TT AND A NEWS
These recent articles in the TT and A News indicate the level of animosity between so called co-developers of the Del Rio Development. There may be suits filed based on the final outcomes of the development negotiations. The City is right in the middle of everything. If the City leans on the side of Wal Mart, Rottman could sue the City and Wal-Mart.
It is SAVE ATASCADERO’S observation that it would be a good time for the City of Atascadero to step back and out of the middle of these Rottman/Wal-Mart disagreements.
Let your Council know your thoughts and come to the next Atascadero City Council Meeting on Tues., Dec. 13 at 6 pm and join the voices asking for the City who represents us, the taxpayers and business owners, to ask the City Staff to cease negotiations until Rottman and Wal-Mart come to a resolution.
Viewpoint Nov. 15, 2011
Wal-Mart holding project plans hostage
By Steven Rottman
The proposal to bring a Walmart store to Atascadero has been in the works for more than six years and now that it is time to move ahead in earnest, Wal-Mart is trying to backpedal on commitments it made with respect to the traffic mitigation for the project.
You might find the preceding statement a curious one, coming as it does from the very people who introduced Wal-Mart to Atascadero: namely me, Steven Rottman, and my partners at the Rottman Group. As longtime developers we are often caught in crossfire and peppered with accusations. That comes with the territory.
But what doesn’t come with the territory are Wal-Mart’s actions regarding the proposed development at the corner of Del Rio and El Camino Real. I am writing this Viewpoint to explain a long and torturous process that has left us in an untenable situation.
Some background: In 2005, the Rottman Group began working with Wal-Mart to locate a 200,000-plus-square-foot store on Del Rio in Atascadero. The Wal-Mart proposal generated great public debate, but in the end, residents voted overwhelmingly to support it. Actually, of those that voted, and the voting was low, voters voted “no” on restricting Wal-Mart to
sf with a maximum of groceries. Of those that voted 2/3’s were in favor of not restricting Wal-Mart’s size and groceries. However, 3,000 of those that voted wanted to restrict Wal-Mart…
In 2006, Wal-Mart purchased the property for the store from the Rottman Group. At that point, Wal-Mart told us that Wal-Mart would take the lead on its own project, would pay for the environmental impact report (EIR) needed to support it, which they did, and stated publicly that Wal-Mart would fund the traffic mitigation measures, once they were identified in the EIR. Concurrently, Rottman would proceed with our plan to develop a second property on Del Rio. It appeared all plans were moving forward.
So what’s the problem? Wal-Mart changed its plans 16 times over five years, responding to a changing economy and in essence revising its business plan. Wal-Mart ultimately decided to build a smaller store. We have no problem with that decision, but we do object to Wal-Mart now wanting to change the rules by limiting its contribution on the traffic mitigation measures, and compel the city, Rottman or other property owners to pay the difference (approximately $2 million).
Wal-Mart argues that there is nothing in writing that requires it to fund the traffic mitigation measures, but we relied on Wal-Mart’s assurances (and perhaps the city did too).
The Wal-Mart project has dragged on for years and has cost the city hundreds of thousands of dollars as well as countless staff hours. Wal-Mart knows Atascadero wants and needs this store, and is now holding both the city and Rottman hostage.
Wal-Mart should stop trying to save itself $2 million and should fund the traffic improvements that have been identified in the EIR. While every market is unique, Wal-Mart certainly has the financial ability to pay for the improvements. Wal-Mart’s CEO discusses the company’s 2011 performance on its website ( walmartstores.com/sites/ annualreport/2011/letter): “Wal-Mart delivered solid financial performance for fiscal year 2011. … We continued to deliver a stable return on investment of over 19 percent. We closed out the year with almost $11 billion in free cash flow.”
Wal-Mart should quit pressuring the city to assign increased fees to the adjacent properties and encumber future developments with liens that may impede progress in the City. Wal-Mart should fund the improvements.
Some readers may tell me we should have expected an unsavory outcome when we first began this process. All that aside, the facts are that Rottman has met its commitments and will continue to work with the city and Wal-Mart to ensure that this project moves forward with appropriate traffic improvements. Nonetheless, we believe Wal-Mart should now do what it said it was going to do. I sincerely hope residents will speak up and tell Wal-Mart to fund the traffic mitigation measures.
Steven Rottman is the CEO of Santa Barbara based Rottman Group, developers of projects throughout the Central Coast.
Developers’ road-fee dispute goes to council – July 2011
At issue tonight is who will pay how much and whether money will come out of traffic funding
By Tonya Strickland
tstrickland@thetribunenews.com
About four months after the release of an environmental review of Atascadero’s long debated and controversial Walmart proposal, the developers continue to disagree on how to pay for traffic improvements.
The Atascadero City Council will be asked tonight to mediate between the two groups on how to fund a $3 million to $4.5 million Del Rio Road freeway interchange at Highway 101, a traffic improvement that consultants say is needed if the retail giant opens on the north side of town.
Three roundabouts on Del Rio Road are also recommended, as well as additional improvements.
The applicants are Wal-Mart Stores Inc., proposing a commercial and residential project, and the Santa Barbara-based Rottman Group, which wants to build an adjacent shopping center called The Annex.
While the projects are separate, the applicants submitted a joint specific plan that consultants used to determine what environmental impacts the developments could have on roads, noise and the environment.
In the original deal, Wal-Mart said it would pay for the entire environmental review and the traffic improvements it recommended, said Keith Mathias, Rottman’s senior vice president. But now Wal-Mart is asking to split those costs, he added.
“Rottman had an understanding with Wal-Mart that they would pay … since they’re the much bigger store,” Mathias said. “But now they’re looking at us since our square footages are about the same after they downsized.”
On Monday, a Wal-Mart spokeswoman said the retailer remains committed to paying its “full fair share” — estimated to be more than $1.7 million — toward the construction of traffic improvements.
But what remains in question is where that money would come from. The city could use the developers’ already-planned traffic impact fees. Developers pay those fees to the city to fund regional road improvements where development occurs.
Whether Wal-Mart’s estimated $1.7 million contribution would come from traffic impact fees was not clear Monday. Mathias said the combined traffic impact fees from both developers would total around $3 million. His impact fees total about $1.5 million, he said.
Meanwhile, Wal-Mart critics fear city funds could be used.
A group called Save Atascadero says it’s “adamantly opposed to using taxpayers money” to fund any part of required traffic improvements.
Wal-Mart is going forward with a scaled-back plan compared with failed proposals in 2007. The development is now slated to have 123,000 square feet of retail and grocer y items plus about 6,500 square feet of outdoor garden services.
The Annex would have more than 120,000 square feet of commercial space with the option for a single-family residential development.
Don’t Subsidize Big Boxes at Local Shops’ Expense
When governments use public money to woo national chains, economic growth and job creation are negligible. Independent retailers also suffer.
Sifting though the postmortem news of Borders Group’s demise, I came across a local newspaper story about a California town that had spent $1.6 million to lure a Borders bookstore to a local shopping center. According to the paper, government officials in Pico Rivera in 2003 agreed to pay part of a new Borders store’s operating expenses by providing a $10,833 monthly subsidy for the next 15 years.
That might seem like an astonishing amount of public money to give a retail shop, but what’s truly remarkable about the deal is just how unexceptional it actually is. Handing out multimillion-dollar subsidies to large chains has become commonplace in much of the country. These deals are premised on the idea that new shopping centers and big-box stores expand employment and create economic growth. The trouble is, these giveaways have done little more than help large retailers at the expense of small businesses.
No one knows exactly how much public money has flowed to chains. These subsidies take different forms—property tax exemptions, sales tax rebates, job tax credits—and most states do not keep a central record of every municipal and county development incentive. But Good Jobs First, a nonprofit research group that tracks these deals, estimates that large retailers have received at least several billion dollars over the past 15 years. Its executive director, Greg LeRoy, says the giveaways have continued through the recession, despite budget shortfalls and a glut of vacant retail space.
BIG BENEFICIARIES
Wal-Mart Stores (WMT) has been a frequent recipient. From 2008 through 2009, the company pocketed $7.9 million in tax exemptions from local development agencies in New York, according to data from the state comptroller. Wal-Mart also received $1.8 million in tax credits and rebates in 2009 to build five super centers in Louisiana, records kept by the state’s Board of Commerce & Industry show. Last year, the St. Louis Post-Dispatch reported that the city of Bridgeton, Mo., approved a $7.2 million deal to finance construction of a single Wal-Mart super center.
Other big retailers have been at the public trough, too. Target (TGT) picked up $1.4 million in local tax breaks to build a store in the small town of Kenner, just outside New Orleans, according to the Times-Picayune. Amazon (AMZN) secured a five-year sales tax exemption from the South Carolina legislature in exchange for opening a distribution center in the state.
Subsidy recipients and government officials often justify these deals on the basis of job creation and economic growth. While Wal-Mart and Amazon did not respond to requests for comment, Molly Snyder, a Target spokeswoman, says the “Kenner Target store created more than 200 new jobs.” She notes: “The business development agreement was a key factor in helping to get the project built.”
SCANT ECONOMIC GROWTH
A recent study, however, indicates that subsidizing retail development produces neither job gains nor new tax revenue. Earlier this year a consortium of local governments in the St. Louis metro area found that cities and counties in the region had diverted more than $5.8 billion in public tax dollars to finance private development. More than 80 percent of these funds supported the construction of new chain stores and shopping centers.
Yet the region has seen virtually no economic growth. “The number of retail jobs has increased only slightly and, in real dollars, retail sales per capita have not increased in years,” the authors of the study wrote, noting that many of the region’s municipalities are now broke. According to the study, more than 600 small retailers have closed in the St. Louis metro area. The resulting job losses have offset the job gains from the new development.
These findings should prompt other cities and regions to reconsider the wisdom of giving big retailers tax breaks and subsidies. Not only is evidence of a public benefit lacking, but local businesses shouldn’t see their tax dollars used to boost their biggest competitors.
A more prudent, and fairer, way for cities to support economic development would be to invest in infrastructure, education, and other community assets that are broadly beneficial to a wide variety of businesses and potential entrepreneurs.
Had Pico Rivera taken such an approach, it might still have a bookstore. In the years since the city began funding Borders, more than 400 new independent bookstores have opened nationwide, according to the American Booksellers Assn. Virtually all did so without the benefit of public funding, staking their success instead on smart business skills and the kind of community support that must be earned one customer at a time.
AND REGARDING WAR-MART’S GREENING??????????????
Sustainability as growth strategy
Walmart’s growth has been go-go-go ever since it launched its sustainability initiative.
Walmart adopted sustainability as a corporate strategy in 2005. It was struggling mightily at the time. Bad headlines stalked the chain, as its history of mistreating workers and suppliers finally caught up with it. One analysis found that as many as 8 percent of Walmart’s customers had stopped shopping at its stores. Grassroots groups were blocking or delaying one-third of its development projects. Stockholders were growing nervous. Between 2000 and 2005, Walmart’s share price fell 20 percent.
As then-CEO Lee Scott told The New York Times, improving labor conditions would cost too much. It would also mean ceding some control to employees and perhaps even a union. Going green was a better option for repairing the company’s image. It offered ways to cut costs and, rather than undermining Walmart’s control, sustainability could actually augment its power over suppliers. Environmentalism also had strong appeal among urban liberals in the Northeast and West Coast—the very markets Walmart needed to penetrate in order to keep its U.S. growth going.
Since Scott first unveiled Walmart’s sustainability program, the company’s head office in Bentonville, Ark., has issued a steady stream of announcements about cutting energy use, reducing waste, and, more recently, selling healthier food. Most of these announcements declare goals, not achievements. But the goals sound audacious enough to reliably produce sweeping headlines and breathless accounts of how Walmart could remake the world by bending industrial production to its will.
By 2010, the number of Americans reporting an unfavorable view of Walmart had fallen by nearly half, from a peak of 38 percent in 2005, to 20 percent.
What the news media haven’t reported
As I started to work on this series, I looked back at the coverage of Walmart’s sustainability campaign over the last six years and was shocked by just how much of a public relations boost the media have given the company and how little public accountability they have demanded in return.
Some of the most serious environmental consequences of Walmart’s business model simply aren’t on the table. Walmart doesn’t talk about them and, despite expending a lot of ink and airtime on the company’s green activities, the news media don’t either. Indeed, journalists rarely stray beyond the parameters of what Walmart has put in front of them.
More surprising is the absence of basic information essential to evaluating what Walmart is actually accomplishing. Take, for example, the share of Walmart’s electricity that comes from renewable sources. There have been thousands of news stories and blog posts on the company’s renewable energy activities since 2005, so one would think this number would be reported often. I couldn’t find it anywhere. (I did eventually dig up enough data to figure it out myself. The answer: less than 2 percent of the company’s electric power in the U.S. comes from its wind and solar projects.)
Or take the case of the Sustainability Index, Walmart’s much-publicized effort to put a green rating on every product it sells. Two years after the media fanfare surrounding the announcement, no journalist, as far as I can tell, has investigated what progress, if any, Walmart has actually made. (According to my research: not much.)
This series aims to fill in some of these gaps and, hopefully, inspire other writers and journalists to take a closer look at what Walmart is and isn’t doing.
What environmentalists haven’t paid attention to
“Walmart is here to stay”—that’s the refrain I often hear from the many environmental organizations and green-business advocates who have applauded the company’s sustainability efforts. The world’s largest retailer isn’t going away, the thinking goes, so anything it does to reduce its footprint is a good thing.
But Walmart circa 2005 is, in fact, long gone. Today’s Walmart is much, much bigger. It sells 35 percent more stuff in the U.S., and its international store count has almost tripled, from about 1,600 to 4,600 stores.
For Walmart, sustainability is a growth strategy—and a highly effective (and darkly ironic) one at that. Six years ago, Walmart was facing widespread opposition, including legislation that would have required better labor practices and limited the company’s growth. Thanks at least in part to its sustainability campaign, and the warm reception from many environmentalists, those roadblocks have eroded and Walmart’s expansion is once again rolling at full speed.
As it grows, Walmart pushes out existing enterprises and local economic systems and replaces them with its own, often far more polluting, global supply chain and sprawling stores. If any single fact could sum up what’s at stake, it would be that Walmart now controls one-quarter of our country’s grocery sales and aims to capture half—a prospect with disastrous implications for the environment, social justice, and local economies.
So far, though, most mainstream environmental organizations have focused on the small bits of good that Walmart could do—reduce PVC in packaging, for example—while ignoring the much larger consequences of its ever-expanding business model.
This series will mark, we hope, the beginning of a more comprehensive and critical response to Walmart’s sustainability initiatives. We’ll be publishing new pieces once or twice a week through early December, so keep an eye on the menu at right—and share your own insights in comments below.
Read the articles in the series so far:
- Walmart by the numbers: Green vs. growth
- Is your stuff falling apart? Thank Walmart
- Think Walmart uses 100% clean energy? Try 2%
- Walmart’s promised green product rankings fall off the radar
- Can you say ‘sprawl’? Walmart’s biggest climate impact goes ignored
Stacy Mitchell is a senior researcher with the Institute for Local Self-Reliance, where she directs initiatives on independent business and community banking. She is the author of Big-Box Swindle and also writes a popular monthly newsletter, the Hometown Advantage Bulletin. She lives in Portland, Maine, and has lately joined Twitter.
