Regulations on Large “Big Box” Retail Development

Background

In 2005, the City of San Diego prepared an ordinance to restrict the size of retail stores in an effort to halt “super center” development attributed to Wal-Mart. The ordinance, as originally drafted, included alternatives that would restrict retail development based on the store size (more than 100,000 sq. feet) and the number of products - Store Keeping Units (SKU) – sold.

Strategy

Our analysis of the City’s rationale for the ordinance identified strengths and weaknesses of the proposed ordinance. PPS suggested the City’s Economic Development Department focus its economic analysis of the ordinance on Wal-Mart-style Super Centers, not large-format retailers like Home Depot.

The Home Depot participated in a coalition of large retailers while successfully drawing a distinction between “big box” and “super center” development.

PPS was able to secure third party endorsements from organizations including the Chamber of Commerce, Business Improvement Districts (BIDs), San Diego County Taxpayers Association, City Technical Advisory Committee, and local planning group committee. The San Diego Union-Tribune editorialized against the original version of the ordinance, providing impetus to amend the ordinance to make it acceptable to The Home Depot.

Results

The San Diego City Council approved a Home Depot-sponsored large retail ordinance that requires discretionary review for new stores over 100,000 square feet but does not include size caps or preclude the company from expanding its presence in San Diego.