Decision nears on big-box ordinance

Decision time in Galt
City Council to weigh limits on planned Wal-Mart

Sheila Frizzell, who has operated Sheila’s Country Rose Florist in Galt for 17 years, says a Wal-Mart Supercenter, with its low prices and wide selection, would hurt local businesses. “Galt’s retail is made up mostly of local people. ... It just doesn’t seem fair for a big store to come in and take away business,” she said.

Shopping and convenience don’t go together in Galt, where locals have to drive at least 10 miles just to buy children’s shoes or a winter coat. Now the rural town on Sacramento County’s southern edge confronts the same vexing question other cities in the region have faced: Do you want a Wal-Mart?

The answer is coming. One month after the world’s biggest retailer proposed a discount grocery and general merchandise store for the city’s growing east side, Galt’s City Council on Tuesday will consider an ordinance to limit the size of new stores that sell food. Wal-Mart’s planned store exceeds those limits.

The Wal-Mart debate brings sharply into focus Galt’s struggle to harmonize its slow-moving rural heritage with its recent growth as a bedroom community for Sacramento and Stockton. Some residents and business owners worry the city is losing its country charm. Others figure it’s time for Galt to grow its retail offerings instead of pushing shoppers into other cities.

“The people here want controlled growth, but they want retail,” said Mayor Tim Raboy, citing a recent survey that found 70 percent of Galt residents think the city doesn’t have enough stores. “They want to be able to shop in Galt, but they want to avoid being too big of a city.” Raboy declined to say how he will vote.

Wal-Mart spokesman Aaron Rios said that support for a new Galt store is “strong” and that the Bentonville, Ark.-based retailer is committed to entering Galt.

“We are never supportive of anything that restricts consumer choice,” Rios said. “We would be displeased if (the ordinance) passes.”

For decades, retail was a low priority for Galt. Residents thought nothing of driving 20 miles north to Sacramento or 10 miles south Lodi to shop.

While many cities put stores and restaurants on their highway frontage to attract passers-by, Galt built homes along much of Highway 99. The city’s population since 1990 has nearly tripled to more than 23,000, but stores and the sales tax base haven’t kept up, said Ted Anderson, Galt’s city manager.

“The consensus was that they didn’t want that kind of stuff,” Anderson said.

The city didn’t have a major grocer until the early 1990s when Modesto-based Save Mart Supermarkets anchored a new shopping center on the west side. “And that was about it until Raley’s opened” in January 2003, Anderson said.

The two supermarkets are Galt’s biggest retailers, but they add relatively little to city coffers because groceries are exempt from sales tax. The city’s largest source of sales tax is the Galt Market, a giant flea market that operates just two days a week.

The Wal-Mart question is particularly vexing for Galt because it perennially finishes last among Sacramento County municipalities in sales taxes revenue per resident.

Last year it ranked 313th among California’s 518 cities and counties with $116 per resident, according to statistics compiled by the HdL Cos., a Diamond Bar, Los Angeles County, consulting firm that analyzes government finances.

Galt tried to pump up its older west side retail core by pouring millions into street, sidewalk and lighting improvements. Business and property owners didn’t respond, and the area remains dominated by struggling small proprietors, outdated buildings and empty storefronts.

Meanwhile, Galt’s neighbors are on a retail binge. Elk Grove is building a 1 million-square-foot mall about eight miles to the north. Galt’s most recent retail coup? A new Pizza Guys takeout shop in a tiny strip center that remains two-thirds empty.

Little wonder, then, that Wal-Mart’s supporters think a store in Galt would be a shopping oasis in a retail desert. The company’s proposal calls for a 132,000-square-foot outlet on Twin Cities Road with about 24,000 square feet dedicated to groceries. The site is across the street from Raley’s store.

While that would vault Wal-Mart into the top spot in Galt’s limited retail universe, the store would be smaller and carry fewer groceries than its full-sized Supercenters, which combine a full-line supermarket with a general merchandise discount store.

Still, advocates say the new store would keep money in town that now leaks to other cities. City consultants three years ago estimated a single big-box retailer such as Wal-Mart could generate $30 million in taxable sales each year.

Galt’s general fund would get 1 percent of the taxes attached to those purchases, or $300,000. Last year, the city took in $2.66 million in sales tax revenue, the HdL Cos. reported, or about a third of its general fund. Galt’s biggest general fund expense is police services, about $5.4 million.

“We simply need more sales tax revenue,” said Gary Tuttle, who owns Gary’s Country Deli on Galt’s west side. “And I think Wal-Mart would help my business. It’ll keep people in town. If they stay in town, they’ll eat in town.”

Galt resident Julie Ring said she would shop at a new Wal-Mart, though the store might hurt other businesses.

“I’m sick of driving out of town for everything except food,” Ring said as she loaded grocery bags in her car in Lee’s Food King parking lot on Galt’s west side. “Galt needs to grow up.”

Wal-Mart, with $350 billion in annual sales, is America’s biggest grocery seller. It has found support around the Sacramento region.

West Sacramento’s Supercenter opened earlier this year as part of a big box troika on Reed Avenue that includes Ikea and a soon-to-open Home Depot. Another Supercenter will soon anchor the new Florin Towne Centre on the site of the old blighted Florin Mall.

The company has planted nine of its 31 Supercenters in Northern California, with a goal of 40 statewide within the next few years.

A Wal-Mart can jump-start retail development in blighted districts or underserved communities such as Galt, said Heath Kastner, a retail property specialist with commercial broker CB Richard Ellis.

“A lot of stores and restaurants follow Wal-Mart’s wake,” Kastner said. “They figure, ‘If Wal-Mart is going there, we should be there too.’ “

Yet a new Wal-Mart store proposal like the one in Galt often attracts critics who find fault with its employee wages and benefits, its impact on existing retailers and the crime and traffic congestion that can go with 24-hour big box retailing.

Those concerns led Elk Grove in July to slap a partial ban on Supercenter-type stores after Wal-Mart’s controversial proposal for one on the city’s northeast side. A Supercenter plan for Lodi has languished in the courts for years.

And Stockton, which welcomed Wal-Mart’s second California Supercenter three years ago, recently banned further big box grocery development. Modesto-based Save Mart has closed three stores there since the Supercenter opened.

In defense, Wal-Mart’s Rios points to a study his company commissioned that found the Stockton Supercenter generates $12.5 million in added tax revenue for Stockton and other San Joaquin County governments. Chicago-based Navigant Consulting Inc. also found that the store created 726 jobs from direct employment and 446 jobs elsewhere in Stockton.

Although Save Mart has closed three markets, the Navigant study counters that 30 new retail stores have opened throughout Stockton, “including eight additional supermarkets and grocery stores.”

It also brings jobs. A Wal-Mart Supercenter can employ as many as 500 people, though the proposed Galt store is not likely to be as big as a typical Supercenter.

Galt floral shop owner Sheila Frizzell is convinced a new Wal-Mart will bowl over local businesses that can’t compete on price or selection.

“People who are in favor of Wal-Mart are thinking convenience, but this goes deeper than that,” said Frizzell, who has operated Sheila’s Country Rose Florist for 17 years. “Galt’s retail is made up mostly of local people. It makes us different from a place like Elk Grove. It just doesn’t seem fair for a big store to come in and take away business.”

As the debate climaxes, no one is predicting which way the City Council vote will go. Advocates on both sides have been working to rally support. The Galt Planning Commission voted 4-1 in late September to support the ordinance.

Wal-Mart’s Rios said the company sent mailers to every home in Galt. United Food and Commercial Workers 8 President Jacques Loveall, a frequent critic of non-union Wal-Mart’s employment policies, said the 30,000-member local based in Roseville is “working with community and environmental groups, as well as other unions, to protect the people of Galt against this threat.”

Raley’s and Save Mart, which both have labor contracts with the UFCW, declined to comment on the Galt ordinance. But in an e-mail, Save Mart spokeswoman Alicia Rockwell said the company “encourages it’s employees to take part in their community in any way that they feel is appropriate and helps keep their communities strong. Our employees are aware of the impact that big box projects have had on communities and our industry.”

Raley’s spokeswoman Amy Johnston said via e-mail that the West Sacramento-based company “respects its employees’ right to choose to attend public meetings on such matters.”