May 28, 2006

California town the latest to snub Wal-Mart

By Jim Christie

SAN FRANCISCO (Reuters) - The town of Hercules, California,
has upscale aspirations and its vision of the good life rules
out a Wal-Mart store.

Similarly, three Maine towns are considering a "box-free"
zone to prevent Wal-Mart from opening in an area of coastal New
England known for its colonial charm, an idea mirroring wealthy
and quaint Nantucket's recent ban on chain stores.

The city council of the mixed-race bedroom community of
23,000 east of San Francisco voted this week to invoke eminent
domain to block Wal-Mart Stores Inc. from building a 99,000
square foot (9,200 sq meter) store near the town's waterfront.

The area is the centerpiece of Hercules' redevelopment
effort, which aims to create a destination on par with high-end
Sausalito across the bay. That would complement Hercules' plan
to market itself as an "anti-suburb" with new neighborhoods
appealing to home buyers nostalgic for old-fashioned
residential areas within cities.

The unusual move stunned California's big-box retailers,
who usually benefit from eminent domain, which allows
government to take private property for its use or for use by
third parties if their projects would benefit the public.

"To use eminent domain is such an abuse of the process,"
said Rex Hime, president of the California Business Properties
Association, which represents large retailers.

"We've seen cities come up with land restrictions, we've
seen cities come up with environmental restrictions, we've seen
cities do any number of things ... but never going so far as to
using eminent domain," Hime said. "This is the beginning of a
very slippery slope ... Next year those laws could apply to
Target, Home Depot, Lowe's; it just keeps right on going."


Wal-Mart is no stranger to hostility. In a garden variety
instance of opposition fueled by union activism, officials in
Oakland, California, another San Francisco Bay area city, had
tried to bar big-box retailers altogether because Wal-Mart
aimed to enter their market.

Wal-Mart faces a different and more confounding source of
anger in Hercules -- a "class war," according to Roger Pilon, a
legal affairs specialist at the libertarian Cato Institute.

"The people in Hercules are coming across as looking down
their noses on those who shop at Wal-Mart, as not wanting
'those people in our neighborhood,"' Pilon said.

Wal-Mart opponents in Hercules say its presence would
blight their town, the first in California with planning codes
guided by "New Urbanism," a school of urban design focused on
pedestrian-oriented neighborhoods mixed with homes and shops
and lacking big-box retailers.

"It's the quality of living in Hercules that we're dealing
with," said Steve Kirby, a Hercules resident since 1988. "One
thing that we don't want is a regional-type business in there
that brings in a lot of traffic."

To some in Hercules, Wal-Mart's low prices raise the
prospect of low-income visitors from neighboring towns to the
north, which have median family income levels well below that
of Hercules, and southern neighbor San Pablo, a gritty
blue-collar town.

"Hercules is a high-income enclave in a larger lower-income
trade area that is currently underserved by retail activity,"
noted a 2005 analysis done for the town planners by Strategic
Economics and Main Street Property Services.

Hercules residents opposed to Wal-Mart say they will press
their fight even if the retailer scales down its store plan.
Compromise is unlikely, Kirby said: "Now, forget it."

Wal-Mart spokesman Kevin Loscotoff declined to comment on
the company's troubles in Hercules, but said the retailer is
planning a legal challenge to the city council's action.