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Monday, Nov 21 2011 10:00 PM

Walmart ramps up ballot threats to speed new stores

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    By Brian Cragin/California Watch

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BY WILL EVANS California Watch

In a push to expand across California without interference, Walmart is increasingly taking advantage of the state's initiative system to threaten elected officials with costly special elections and to avoid environmental lawsuits.

The Arkansas-based retailer has hired paid signature gatherers to circulate petitions to build new superstores or repeal local restrictions on big-box stores. Once 15 percent of eligible voters sign the petitions, state election law puts cash-strapped cities in a bind: City councils must either approve the Walmart-drafted measure without changes or put it to a special election.

As local officials grapple with whether to spend tens of thousands or even millions of taxpayer dollars on such an election, Walmart urges cities to approve the petition outright rather than send it to voters.

The tactic hasn't been seen in Bakersfield, which requires urban decay studies -- and has architectural design standards for -- large centers.

While most development projects don't attract much controversy, Walmart has become a lightning rod almost everywhere it goes in California. Backers of organized labor have demonized the company for opposing unions and paying low wages, while other critics say its superstores cripple local businesses and increase sprawl.

Now, Walmart's use of the initiative process has angered elected officials who say the company's political strategy effectively holds them hostage.

"They circumvented the system and blackmailed the town," said Rick Roelle, a councilman in Apple Valley, where Walmart pushed through a superstore proposal in April. "We've had controversial projects, but we were never bullied like Walmart."

Walmart and its supporters argue that the strategy helps speed up development that can boost employment and tax revenue, as well as low-price shopping. The initiative process, according to the company, pressures cities only because it shows the strong community support for Walmart.

"The initiative process was an opportunity that allowed voters to voice their support for the benefits that Walmart would bring their community, including jobs, affordable groceries, increased tax revenue, and infrastructure improvements," Walmart spokeswoman Delia Garcia said in a statement.

UP AND DOWN THE STATE

Walmart has employed the same well-honed strategy across the state, from the Central Valley agricultural community of Kerman to the Silicon Valley suburb of Milpitas to the High Desert town of Apple Valley, where the main street has a special crosswalk button for horse riders.

Walmart has ramped up the campaign in the last year, pushing through four new superstore projects and fighting big-box regulations in San Diego. The company spent $2 million on the effort, paying election lawyers, campaign consultants and public relations firms.

Walmart often rallies a crowd of supporters at city council meetings to back up its position. Pastor Ray Smith, president of a group called Pastors on Point, asked his followers to support Walmart in San Diego. He spoke passionately against an ordinance imposing new regulations on superstores, saying other stores don't hire enough African Americans.

At one city meeting, he called on a group of young people to stand and told the city council, "You want to stop the violence? We need jobs."

Walmart paid Smith's church to bus supporters to council meetings and shuttle young people who gathered signatures for a ballot initiative petition against the regulations. Walmart's local political committee also reported paying $13,400 in salary and consultant payments to Smith directly, in addition to $5,500 labeled "van/bus rental."

Smith said the campaign filings were incorrect. "They did rent our buses ... but I was never a consultant for them," he said.

Walmart uses the ballot initiative process in part to shield its superstores from lawsuits under the California Environmental Quality Act. The landmark 1970 law requires state and local agencies to review and mitigate the environmental and traffic impacts of development projects. Lawyers often sue Walmart, contending that the review didn't go far enough -- something that has happened in Bakersfield.

The company has found a loophole: Once it switches to a ballot initiative, the law doesn't apply.

Other companies occasionally pursue ballot initiatives on development projects. But Walmart is the main player, and California is the main battleground.

Walmart's successful strategy raises questions about whether California's communities -- dogged by economic woes -- can afford an aggressive use of the state's system of direct democracy. Other interest groups could use the same strategy to pressure elected officials, as medical marijuana advocates recently did to defeat pot club regulations in San Diego.

FIVE VICTORIES

This year, four cities approved Walmart's initiative petition without an election. One of them, San Diego, repealed its own superstore regulations in the face of an election that could have cost $3.4 million. Only Menifee in Riverside County held a special election, costing taxpayers $79,000. Walmart spent nearly $400,000 there -- and won handily.

The strategy violates the spirit, if not the letter, of state environmental law, said Richard Frank, former California chief deputy attorney general for legal affairs.

"It is disturbing because it appears to be a fairly overt circumvention of the CEQA process," said Frank, now director of the California Environmental Law & Policy Center at the UC Davis School of Law.

Walmart argues that it closely adheres to California's extensive regulations. The strategy is necessary, it says, to avoid spurious lawsuits targeting the company for political reasons. The retailer points out that it goes much of the way through a lengthy planning process, allowing for an environmental impact report and public input, before heading to the ballot box.

"In many places around the state," Garcia said, "we often obtain store approvals but are subjected to special interests that attempt to use political and legal challenges to unfairly delay a store's construction."

Ironically, since the 1990s, activists often have used ballot initiatives to block Walmart stores.

Walmart turned that strategy on its head when it began proposing its own initiatives. The company suffered a sobering, nationally publicized loss in Inglewood in 2004. The company spent more than $1 million on a ballot measure to open a superstore there. Unions fought back, and voters shot it down.

But Walmart hasn't lost in California since.

Last year, city councils approved Walmart superstore initiatives without an election in the small Gold Country city of Sonora and the Mojave Desert military base community of Ridgecrest. This year, with five victories, has been Walmart's busiest.

Walmart continues to see a big opportunity for growth in California. The company already has 212 stores and employs 67,525 people in the state.

PROPOSALS START WITH PLANNING COMMISSION

On the road to a superstore ballot initiative, Walmart starts out following the normal process: The local planning commission reviews the company's detailed plans to address traffic and environmental impacts. Once the planning commission approves the project, lawyers working for environmental or other anti-Walmart interests often challenge the decision, setting the stage for a lawsuit.

But before the city council gets a chance to weigh in, Walmart pulls its proposal and starts circulating an initiative petition detailing the same project.

To Walmart's supporters, the planning commission's public hearings and stamp of approval provide sufficient oversight. Some planning experts, however, argue that the city council's review is an important part of the process. Councils normally can make their approval of big development projects conditional on certain changes, like requiring developers to widen a road for additional traffic or help pay for a nearby public park.

In Fresno County, Kerman Councilman Doug Wilcox, for example, wanted to weigh in on whether students at a nearby school were sufficiently protected from increased Walmart traffic. The company's strategy didn't give him the opportunity.

"The strong-arm tactics and the way that they did it just left a bad taste in my mouth," Wilcox said.

For each initiative, Walmart creates and funds a political committee with the city's name, like it did with Apple Valley Consumers for Choice. The company relies on a stable of prominent firms to handle legal filings and communications strategies.

The company looks for a local resident to formally propose the initiative. Attila Csikos offered to be that person in Menifee, a recently incorporated city whose growth has been driven by master planned communities. Csikos said he likes Walmart's low prices and supports the initiative process.

"It should be up to the will of the people, not the regulations of a city council," he said.

Walmart's petitions, which can run longer than 60 pages, create special development rules for a specific area allowing for a superstore. They include language that bars appeals for future administrative approvals.

National Petition Management, which often handles Walmart's signature drives, works fast. In Milpitas, near San Jose, Councilwoman Althea Polanski was impressed that Walmart garnered 6,000 signatures in 16 days. The county registrar found that 3,745 signatures were valid, more than 15 percent of Milpitas' 24,000 registered voters.

"That speaks very, very clearly to me that a majority of the people in this city want an expanded Walmart," Polanski said at an April council meeting.

If the petition is signed by 10 percent of registered voters, it can go on the next regularly scheduled ballot. Fifteen percent triggers a special election that must be held between 88 and 103 days later, which can be much more costly. In Milpitas, it would have cost $436,000.

The only other option is to approve the initiative as Walmart wrote it.

Councilwoman Debbie Giordano originally supported Walmart but was alarmed by the initiative strategy. She worried it could be used by other activists to open marijuana dispensaries.

"I think that's a dangerous formula for government," Giordano said. "What does that say? Go use your money and your power, go get the signatures, and then we're going to force you to do whatever."

Giordano's fear already has been realized in San Diego. On the heels of a successful Walmart effort there, a group of medical marijuana supporters brought a ballot initiative to repeal regulations on pot clubs. Putting it on the next ballot would have cost up to $841,000. The council repealed its own marijuana ordinance, as council members bemoaned the costs of an election.

California Watch, the state's largest investigative reporting team, is part of the independent, nonprofit Center for Investigative Reporting. You can contact the writer at wevans@cironline.org.

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