No economic impact study required

– City Council will not make Wal-Mart study the impact it will
have on the Gilroy economy when the nation’s largest chain store
brings a Supercenter version of its store to town.
GILROY – City Council will not make Wal-Mart study the impact it will have on the Gilroy economy when the nation’s largest chain store brings a Supercenter version of its store to town.

Council voted down, 4-3, a request to consider making Wal-Mart do an economic impact report showing the harm or benefit the 220,000-square-foot store would bring to the economic condition of the community. The decision could make it more difficult for City Council to deny Wal-Mart from moving into the Pacheco Pass Shopping Center at Highway 152 and U.S. 101 and out of its existing Gilroy store on Arroyo Circle.

“I think we all need to operate on the basis of knowledge. I’m disappointed City Council is not being more careful,” resident and former Councilwoman Connie Rogers said. “I think these shopping centers are premature, and we’re not giving the community time to absorb one before we get into the next one.”

Rogers, David Rosas and Miguel Correa, all members of a grassroots group called Gilroy First!, spoke in support of an economic impact study during the public comment portion of Monday’s City Council meeting. Because it was not on Monday’s agenda, City Council could only discuss whether to consider the matter in the future.

“This big box store system, we don’t need it,” Rosas told Councilmembers. “You’re making downtown a ghost town.”

By meeting’s end, Councilman Peter Arellano broached the topic, asking City Council to place on a future agenda a request that the Wal-Mart project be forced to go through an economic review that would analyze things such as changes in sales tax revenue and affect on existing businesses.

As with the environmental impact report Wal-Mart is voluntarily conducting, the company would foot the bill for the economic study.

Voting for the economic impact report were Arellano, Charlie Morales and Roland Velasco. Opposed to making Wal-Mart study its impact to local businesses were Mayor Tom Springer, Bob Dillon, Craig Gartman and Al Pinheiro.

“(An economic study) is something we need to do to get information instead of just assuming the store is bringing in money (to the city),” Arellano said. “If we’re going to make an informed decision, let’s do a study.”

Mayor Springer had a different take. Springer doubts the city has the authority to request an economic impact report since Wal-Mart is only moving from one commercial location to another. Even if the City Council could ask for an economic study, Springer questioned whether the information could be used in any discretionary decision.

“Every business in town can complain there will be an economic impact on them whenever a similar business moves into town,” Springer said. “If you do it for one, you better do it for all.”

Company spokesperson Amy Hill could not be reached for comment before deadline, but in past interviews she said the company was considering conducting an economic study.

“We believe it will demonstrate a positive impact to the city,” Hill said last week. “But we don’t believe we should be held to a different standard than other businesses.”

Hill believes the positive economic impact comes from bringing more out-of-town consumers to Gilroy. She also claimed towns see overall grocery prices drop when Wal-Mart’s Supercenters are brought into a community. However, it is not clear how existing grocers are impacted.

In addition to the wide variety of low-cost and bulk products sold at regular Wal-Marts, Wal-Mart Supercenters have full-scale grocery stores inside.

At issue for those seeking the economic study is the impact Wal-Mart Supercenter will have, not only on grocery stores, but the smaller stores in the strip malls of supermarkets like PW Marketplace and Arteaga’s Super Save on 10th Street near where the Supercenter would be built.

“The supermarkets serve as an anchor to those other businesses,” Rogers said.

The argument goes like this: Wal-Mart Supercenter drives business away from Arteaga’s and PW, the markets go out of business leaving their space empty at least for a time. Meanwhile, the side stores struggle for customers as the supermarket spaces get refilled, if ever.

Meanwhile, the city is moving along with the environmental impact report related to the Wal-Mart move. Planner Melissa Durkin said both the Planning Commission and City Council would review the results of the study within the next couple of months.

Regardless of the environmental review and lack of an economic study, City Council still has the authority to reject the Wal-Mart project, Durkin said.