BILL ANALYSIS Ó
AB 667
Page 1
Date of Hearing: May 1, 2013
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
K.H. "Katcho" Achadjian, Chair
AB 667 (Hernandez) - As Amended: March 19, 2013
SUBJECT : Land use: development project review: superstores.
SUMMARY : Requires a local agency to do an economic impact
report prior to permitting the construction or alteration of a
superstore in an economic assistance area, as defined, and
requires the local agency to make a finding that the superstore
will not adversely affect the economic welfare of the impact
area, based on that report. Specifically, this bill :
1)Defines the following terms:
a) "Economic assistance areas" means existing economic
development areas, that may be amended from time to time by
the Legislature, including an enterprise zone, a local
agency military base recovery area, a manufacturing
incentive area, a targeted tax area, or a redevelopment
area identified by any successor or agency to a former
redevelopment agency, or recipients of over $100,000 of
financial assistance, as specified;
b) "Financial assistance" includes, but is not limited to,
any of the following in the amount of $100,000 or greater:
i) Any appropriation of public funds, including, but
not limited to, loans, grants or subsidies, or the
payment for or construction of parking improvements;
ii) Any tax incentive, including, but not limited to,
tax exemptions, rebates, reductions, or moratoria of a
tax, including any rebate or payment based upon the
amount of sales tax generated from the superstore;
iii) The sale or lease of real property at a cost that is
less than fair market value; or,
iv) Payment for, forgiveness of, or reduction of fees.
c) "Impact area" means a five-mile radius surrounding the
proposed location of a superstore; and,
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d) "Superstore" means a business establishment that exceeds
90,000 square feet of gross floor area, sells a wide range
of consumer goods, and devotes 10,000 square feet or more
of the sales floor area, as specified. "Superstore" shall
include a retail establishment with multiple tenants, and
the cumulative sum of related or successive permits that
may be part of a larger project, including piecemeal
additions to a building, where consumer goods and
nontaxable items are sold under the same roof with shared
checkout stands, entrances, and exits. "Superstore" does
not include a discount warehouse or retail store where more
than one-half of the items carried by the discount
warehouse or retail store are sold in large quantities or
in bulk, and the discount warehouse or retail store
requires shoppers to pay a membership or assessment fee.
2)Requires, prior to the permitting of the construction of, the
addition to, or the alteration of, any buildings or structures
which would create a superstore in an economic assistance
area, the legislative body of the city or county to make a
finding that, based on the consideration
of all economic benefits and costs, the superstore will not
materially adversely affect the economic welfare of the impact
area, in addition to the findings otherwise required by any
ordinance or regulation by the city or county.
3)Requires the finding to be based upon information contained in
an economic impact report, any other information received or
obtained by the designated agency of the city or county, and
any other information received before or at a public hearing
conducted, as specified.
4)Allows the city or county to prepare the economic impact
report or contract with a private entity, other than the
permit applicant, or with another public agency for the
preparation of the report. Any private entity or other public
agency contracted to prepare the economic impact report shall
be qualified by education, training, and experience to conduct
economic and fiscal impact analyses.
5)Requires the applicant for the proposed superstore to pay the
city or county for the costs of preparing the economic impact
report.
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6)Requires the report to include, but not be limited to, all of
the following:
a) An assessment of whether the proposed superstore will
meet the purposes of any designated economic assistance
areas, including an enterprise zone, a local agency
military base recovery area, a manufacturing enhancement
area, a targeted tax area, or any plan administered by a
successor agency to a former redevelopment agency, in which
the superstore is proposed to be located;
b) An assessment of whether the proposed superstore will
negatively impact any retailer that is the beneficiary of
any benefits from any program adopted in connection with
any designated economic development area, including an
enterprise zone, a local agency military base recovery
area, a manufacturing enhancement area, a targeted tax
area, or any program adopted by a successor agency to a
former redevelopment agency, in which the superstore is
proposed to be located;
c) An assessment of the extent to which the proposed
superstore will capture a share of retail sales in the
impact area;
d) An assessment of the extent to which the construction
and operation of the proposed superstore will affect the
supply and demand for retail space in the impact area; and,
e) An assessment of the extent to which the construction
and operation of the proposed superstore will affect
employment in the impact area, including all of the
following:
i) The number of person employed in existing retail
stores in the impact area;
ii) An estimate of the number of people who will likely
be employed by the proposed superstore;
iii) An analysis of whether the proposed superstore will
result in a net increase or decrease in employment in the
impact area; and,
iv) The effect on wages and benefits of employees of
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other retail businesses, and community income levels in
the impact area.
f) A projection of the costs of public services and public
facilities resulting from the construction and operation of
the proposed superstore and the incidence of those costs,
including the cost to the state, city, or county of any
public assistance that employees of the proposed superstore
will be eligible for based on the wages and benefits to be
paid by the proposed superstore;
g) A projection of the public revenues resulting from the
construction and operation of the proposed superstore
retailer and the incidence of those revenues;
h) An assessment of the effect that the construction and
operation of the proposed superstore will have on retail
operations, including grocery stores or retail shopping
centers, in the impact area, including the potential for
blight resulting from retail business closures and the
nature of any businesses displaced;
i) An assessment of the effect that the construction and
operation of the proposed superstore will have on the
ability of the city or county to implement the goals
contained in its general plan, including, but not limited
to, local policies and standards that apply to land use
patterns, traffic circulation, affordable housing, and
natural resources, including water supplies, open-space
lands, noise problems, and safety risks;
j) An assessment of the effect that the construction and
operation of the proposed superstore will have on average
total vehicle miles traveled by retail customers in the
same impact area;
aa) An assessment of the potential for long-term vacancy of
the property on which the superstore is proposed in the
event that the business vacates the premises, including any
restrictions that exist on the subsequent use of the
property on which the superstore is proposed to be located,
including the provisions of any lease that, in the event
the owner or operator of the proposed superstore vacates
the premises, would require the premises to remain vacant
for a significant amount of time.
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bb) As assessment of whether the superstore would require
the demolition of housing or any other action or change
that would result in a decrease or negative impact on the
creation of extremely-low-, very low-, low-, or
moderate-income housing;
cc) An assessment of whether the superstore would result in
the destruction or demolition of park or other green space,
playgrounds, child care facilities, or community centers;
dd) An assessment of whether the superstore would result in
any other adverse or positive economic impacts or blight in
the impact area; and,
ee) An assessment of whether any measures identified by the
superstore are available that may mitigate any materially
adverse economic impacts of the superstore.
7)Requires a city or county, at any regularly scheduled meeting
or meetings of the legislative body of the city or county, to
provide the opportunity for public comment on the economic
impact report and its findings, following the completion and
approval of the economic impact report as required and 30 days
prior to the issuance of any entitlement, including, but not
limited to, a building permit.
8)Finds and declares that the review and regulation of
superstores is a matter of statewide concern and not merely a
municipal affair, thereby applying the bill's provisions to
charter cities and to charter cities and counties.
9)States that no reimbursement is required pursuant to the
bill's provisions because a local agency or school district
has the authority to levy service charges, fees, or
assessments.
10)States the intent of the Legislature to promote economic
development in all communities of the state.
EXISTING LAW :
1)Requires, under the Permit Streamlining Act, each state agency
and local agency to compile one or more lists that specify in
detail the information that will be required from any
applicant for a development project, and requires a public
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agency that is the lead agency for a development project, or a
public agency which is a responsible agency for a development
project that has been approved by the lead agency, to approve
or disapprove the project within applicable periods of time.
2)Prohibits a local agency from providing any form of financial
assistance to a vehicle dealer or big box retailer, or a
business entity that sells or leases land to a vehicle dealer
or big box retailer, that is relocating from the territorial
jurisdiction of one local agency to the territorial
jurisdiction of another local agency but within the same
market area.
3)Requires, under the California Environmental Quality Act
(CEQA), lead agencies with the principal responsibility for
carrying out or approving a proposed discretionary project to
prepare a negative declaration, mitigated declaration, or
environmental impact report (EIR) for this action, unless the
project is exempt from CEQA (CEQA includes various statutory
exemptions, as well as categorical exemptions in the CEQA
guidelines).
4)Requires each planning agency to prepare and the legislative
body of each county and city to adopt a comprehensive,
long-term general plan for the physical development of the
county or city, and of any land outside its boundaries which
in the planning agency's judgment bears relation to its
planning.
FISCAL EFFECT : Unknown
COMMENTS :
1)This bill requires a local agency (in this case, all cities
including charter cities, and counties) to do an economic
impact report prior to permitting the construction or
alteration of a superstore in an economic assistance area, and
requires the local agency to make a finding that the
superstore will not adversely affect the economic welfare of
the impact area, based on that report. The report would need
to include a number of different assessments, including an
assessment of whether the proposed superstore will negatively
impact any retailer, the extent to which the proposed
superstore will capture a share of retail sales in the area,
an assessment of the extent to which the construction and
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operation of the proposed superstore will affect the supply
and demand for retail space in the area, an assessment of the
extent to which the construction and operation of the proposed
superstore will affect employment in the area, a projection of
the costs of public services and public facilities resulting
from the construction and operation of the proposed
superstore, an assessment of the effect that the construction
and operation of the proposed superstore will have on retail
operations, including grocery stores or retail shopping
centers, and a number of other assessments relating to the
impact of the superstore on the community.
The bill defines a superstore to mean "a business
establishment that exceeds 90,000 square feet of gross floor
area, sells a wide range of consumer goods, and devotes 10,000
square feet or more of the sales floor area to the sale of
[food products for human consumption]." The definition of
superstore does not include a discount warehouse or retail
store where more than one-half of the items carried by the
discount warehouse or retail store are sold in large
quantities or in bulk, and the discount warehouse or retail
store requires shoppers to pay a membership or assessment fee.
The bill also defines other terms including "economic
assistance areas," "financial assistance," and "impact area."
The bill's provisions specify that the economic impact report
would be paid for by the project applicant. A local agency
could prepare the report or contract with a private entity
that is qualified to conduct economic and fiscal impact
analyses to prepare the report.
This bill is sponsored by the United Food and Commercial
Workers, Western States Council.
2)According to the author, "In recent years, much concern has
been expressed about the economic impacts caused by large 'big
box' or 'superstore' developments. Among others, concerns
have been expressed by local small businesses, community
groups, other retail grocery stores, workers and labor
organizations. At the same time, millions of dollars in state
and local tax credits and other incentives are being offered
to include these developments in local jurisdictions
throughout the State of California.
"The goal of such 'economic assistance areas' is to promote
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economic development with the goal of creating good jobs,
economically self-sustaining communities, and promoting a
vibrant small business sector. The purpose of the benefits
granted by 'economic assistance areas' is to stimulate
business investment and job creation for qualified
disadvantaged individuals in state-designated
economically-distressed areas."
3)The author sites an April 2011 study entitled Living Wage
Policies and Big-Box Retail: How a Higher Wage Standard Would
Impact Walmart Workers and Shoppers , completed by the U.C.
Berkeley Center for Labor Research and Education, which found
the following:
"The growth of big box retail is a mixed blessing to local
communities. There is strong evidence that jobs created by
Walmart in metropolitan areas pay less and are less likely to
offer benefits than those they replace. Controlling for
differences in geographic location, Walmart workers earn an
estimated 12.4 percent less than retail workers as a whole,
and 14.5 percent less than workers in large retail in general.
Several recent studies have found that the entry of Walmart
into a county reduced both average and aggregate earnings of
retail workers and reduces the share of retail workers with
health coverage on the job. The impact is not only one of
substitution of higher wage for lower wage retail jobs, but
also a reduction in wages among competitors. As a result of
lower compensation, Walmart workers make greater use of public
health and welfare programs compared to retail workers as a
whole, transferring costs to taxpayers."
4)The sponsor argues that "it is crucial that local governments
making land use economic subsidy decisions have the
information they need to make an informed choice. We have
seen superstore after superstore come into communities with
promises of economic benefit only to have the opposite effect.
In fact, studies indicate that superstores have an adverse
impact on workers and the communities they are sited in?.we
need AB 667 to ensure that there is a procedure and a forum
for decision makers to weigh all of the economic information
available when considering a superstore development."
5)A coalition including the California Retailers Association,
Associated General Contractors, California Building Industry
Association, California Business Properties Association,
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California Chamber of Commerce, California Grocers
Association, Commercial Real Estate Development Association,
International Council of Shopping Centers, Retail Industry
Leaders Association, and the Western Electrical Contractors
Association, in opposition, raise the following concerns:
a) AB 667 has the potential to create significant delays in
the local planning process, tying up local government
resources and delaying job creation;
b) The bill specifically targets economic development areas
such as enterprise and manufacturing zones, in California's
hardest hit communities that are already struggling;
c) Although the stated intent of the bill is to 'promote
economic development,' the real purpose of the bill appears
to be economic protectionism?;
d) AB 667 also creates new opportunities for litigation of
projects in an already overly-litigious area; and,
e) Local consumers, through their elected officials, should
make the decisions about which stores they want in their
communities?AB 667 infringes upon local planning authority.
6)SB 1056 (Alarcón), which was vetoed by Governor Schwarzenegger
in 2004, would have required a city, county, or city and
county to prepare an economic impact report prior to approving
or disapproving a proposed development project that would
permit the construction of a superstore retailer, defined as a
store greater than 130,000 square feet of gross buildable area
that generates sales or use tax pursuant to the Bradley-Burns
Uniform Local Sales and Use Tax that contains more than 20,000
stockkeeping units, and derives 10% of its total sales from
the sale of non-taxable merchandise.
SB 1523 (Alarcon) of 2006 similarly required an economic
impact report to be prepared prior to a city's or county's
approval or disapproval of a superstore retailer with greater
than 100,000 square feet of , and was again vetoed by Governor
Schwarzenegger.
SB 469 (Vargas, 2012) would have required a city or county to
prepare economic impact reports before it approves or
disapproves the construction or conversion of superstore
retailers. SB 469 was vetoed by Governor Brown, with the
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following message:
While I recognize that the merits of large-scale projects
need to be carefully considered, plenty of laws are already on
the books that enable and in some cases require cities and
counties to carefully assess whether these projects are in a
community's best interests. This bill would add yet another
layer of review to an already cumbersome process.
7)Support arguments : Supporters argue that it is crucial that
local governments making land use and economic subsidy
decisions have the information they need to make an informed
choice, that workers at the superstores have lower wages and
little, if any, benefits such as healthcare and retirement,
and that local business often have a difficult time competing
with superstores and often go under.
Opposition arguments : The League of California Cities argues
that "each of the state's 482 diverse cities must maintain the
ability to make decisions which best fit their community.
Each individual city, or the voters within local communities,
may reach different conclusions on the extent to which
specific enterprises add to or extract value...AB 667
fundamentally undermines local land use discretion and
authority."
REGISTERED SUPPORT / OPPOSITION :
Support
United Food and Commercial Workers, Western States Council
[SPONSOR]
Alliance of Californians for Community Empowerment
Asian Americans for Community Involvement
Asian Pacific American Labor Alliance
Asian Pacific Environmental Network
California Conference Board of the Amalgamated Transit Union
California Conference of Machinists
California Teamsters Public Affairs Council
Chinatown Community for Equitable Development
Chines Progressive Association
Clement Street Merchants Association, San Francisco
East Bay Alliance for a Sustainable Economy
Engineers and Scientists of California
Filipino Advocates for Justice
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International Longshore and Warehouse Union
Jobs with Justice
Korean Resource Center
Living Wage Coalition of Sonoma County
Los Angeles Alliance for a New Economy
Mark Arabo, Neighborhood Market Association, San Diego, CA
North Bay Labor Council, AFL-CIO
North Bay Organizing Project
Orange County Communities Organized for Responsible Development
(OCCORD)
Professional & Technical Employees, Local 21
Support (continued)
Rodino Associates
Services, Immigrant Rights and Education Network
Sonoma County Conservation Action
Sonoma County Go Local Cooperative
UNITE HERE
Utility Workers Union of America, Local 132
Working Partnerships USA
Andre Quintero, Mayor, City of El Monte
Bob Filner, Mayor, San Diego
Greg Pettis, Cathedral City Councilman, League of Cities Chair
Angela Villes, Victorville City Councilmember
Debra Martin, Pomona City Councilmember
John Nolte, Pomona City Councilmember
Freddie Rodriguez, Pomona City Councilmember
Susan Rubio, Baldwin Park City Council
Dan Hollaway, La Puente City Council
Norma Macias, El Monte City Council
Jorge Marquez, Covina City Council
Bryan Urias, District 5, Upper San Gabriel Municipal Water Board
Raul Romero, Division 5, San Gabriel Valley Municipal Water
District
Anthony Duarte, Hacienda LaPuente School Unified School District
Eric Mar, San Francisco Board of Supervisors
Ricardo Pacheo, City Councilmember, Baldwin Park City Council
Todd Gloria, Council President, San Diego City Council
Marti Emerald, San Diego City Councilmember
David Alvarez, San Diego City Councilmember
Damon Connolly, City Councilman, San Rafael
Opposition
Associated General Contractors
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California Building Industry Association
California Business Properties Association
California Chamber of Commerce
California Grocers Association
California Retailers Association
Commercial Real Estate Development Association
International Council of Shopping Centers
League of California Cities
Retail Industry Leaders Association
Western Electrical Contractors Association
Analysis Prepared by : Debbie Michel / L. GOV. / (916)
319-3958