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Shopping Centers Today -> November 1999
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'Big-box' bill vetoed in California
By Jon Springer
Costco
and other big-box stores were spared when Gov. Gray Davis of California
vetoed Assembly Bill 84.
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Assembly Bill 84 — dubbed AB 84, or the "big-box bill''— would have prohibited local governments and state agencies from approving construction of retail stores of more than 100,000 square feet that devote more than 15,000 square feet to groceries, drugs or other nontaxable items. Clearly aimed at discounters such as Costco, Kmart and Wal-Mart, the bill was supported by the United Food and Commercial Workers (UFCW) union, which is concerned about its employers losing market share to large discount stores, which typically are nonunion shops.
A UFCW spokesman told The San Francisco Chronicle that big-box stores "use food as a loss leader to put traditional-format grocery stores out of business.''
The bill, which shot through the state legislature on the final night of the session without public hearings or scrutiny typical of such measures, met swift opposition on a variety of fronts, including shopping center owners as well as developers, cities and large retailers themselves.
Dozens of property executives wrote letters opposing the measure, said Rex Hime, a Sacramento-based ICSC lobbyist and president of the California Business Properties Association. Thomas L. Schriber, president of Newport Beach-based developer Donahue Schriber, warned the governor that AB 84 "is far-reaching with negative impact throughout the state...This bill encroaches on free-market competition and denies the public the benefit of choice and would ultimately mean higher drug [and] grocery prices. It would be an irreversible blow ... to our country and state.''
Issaquah, Wash.-based discount club Costco, one of the bill's main targets, distributed postcards at its California stores and on its Website to send to Gov. Davis in opposition of the bill, and bought newspaper advertisements in several influential daily newspapers to publicize its point of view.
Costco asserted AB 84 was "rushed through the state legislature at midnight before the close of the session,'' and pushed by supermarket unions. Costco has 88 stores in California, 50 of which are nonunion. If the bill is signed, Costco — whose stores sell groceries, drugs and other items and average around 130,000 square feet — could not build additional stores.
Additionally, Wal-Mart also gathered signatures at its Sam's Club and Wal-Mart outlets in the state, said Cynthia Lin, a spokeswoman for the Bentonville, Ark., mass merchant. None of Wal-Mart's locations have unionized workers, said Lin, adding that several efforts to organize have been voted down by Wal-Mart workers in the past.
The California League of Cities also objected, saying in a letter to the governor that AB 84 is "an example of heavy partisan and special-interest arm-twisting.''
In an unusually strong veto message, Gov. Davis ripped the legislature for what he called "the worst kind of end-of-session maneuvering by special interests,'' and said the bill was, as, many ICSC members argued, "anticonsumer and anticompetition.''
"The governor used language directly out of our lobbying efforts,'' said Becky Sullivan, ICSC's staff vice president of government relations in Arlington, Va. "All that letter writing worked.''
Hime said his organization would remain vigilant in case similar efforts come up again. Some speculate the Assembly could take up the matter again when it reconvenes in January.
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