Wal-Mart Takes Its Case to Eureka Voters--And Loses

 

Voters in Eureka have handed a setback to the Bentonville, Arkansas-based denizens of gray big boxes. In a late August election, Eureka voters rejected rezoning to allow a Wal-Mart near the waterfront. The election polarized the city, but officials pledged that economic development efforts would continue with or without Wal-Mart.

The loss in the Humboldt County seat was a rare defeat for Wal-Mart — but probably not surprising considering that it occurred in an independent-minded North Coast town of 28,000 people just south of Humboldt State University.

"Eureka is unique," voter Laura Reneau told the Associated Press. "Why put something as common as Wal-Mart on our coastline?"

Another factor in the election was the number of empty retail stores in existing commercial districts — including about two dozen vacancies at the 11-year-old Bayshore Mall and more than a few vacant buildings downtown. Wal-Mart opponents said the big box would only increase vacancies.

Wal-Mart proposed a store for 37 acres known as the Balloon Track, an abandoned railroad switching yard about 150 feet from the ocean. The city in 1997 amended its general plan to designate the property for general industrial uses, according to Kevin Hamblin, the city’s community development director. The property, which Union Pacific still owns, is zoned for public utility use.

In fall of 1998, the California Coastal Commission rejected Wal-Mart’s proposal to designate the site for retail use. Bypassing the City Council, Wal-Mart then convinced local supporters to launch a petition drive to qualify a rezoning initiative for the Eureka ballot.

What was a divisive issue in town only got worse during the campaign regarding Measure J, on which Wal-Mart spent more than $250,000, or nearly $20 per registered voter. Some Humboldt County supervisors came out against Wal-Mart’s plan, and the Eureka City Council eventually voted 3-1 for a resolution against Wal-Mart. Mayor Nancy Fleming, a Wal-Mart proponent, became a lightening rod in town. An aggressive telemarketing campaign by Wal-Mart backfired and ended with Wal-Mart reportedly firing the telemarketing firm.

In the late-August special election that had a 47 percent voter turnout, 61 percent of voters rejected Measure J. It may have been the first such electoral defeat in California for Wal-Mart, said Al Norman, a Massachusetts activist who recently wrote the book Slam-Dunking Wal-Mart — Hometown America Fights Back. Wal-Mart narrowly won a similar election in the Sonoma County city of Windsor two years ago, said Norman, who advised opponents in both Windsor and Eureka.

"What was unusual about Eureka was that this vote was done at the insistence of Wal-Mart," Norman said. Also setting Eureka apart was Wal-Mart’s inability to convince local elected and civic leaders, who are usually Wal-Mart’s biggest cheerleaders, he said. "There were a fair number of leaders who were willing to say this makes no sense."

In fact, a committee appointed by the Board of Supervisors came to that conclusion about one month before the election. The Humboldt County Ad Hoc Committee on Big Box Development released a report that echoed many arguments of Wal-Mart detractors. The report said Wal-Mart would essentially suck sales and jobs from existing stores in the region.

"A new big box retail store would have negative fiscal impacts on surrounding municipal entities, not increase jobs or the quality of jobs, significantly harm and potentially bankrupt existing businesses and reduce the overall quality of life throughout the county," the report stated.

Outright defeats of big boxes are rare, and Wal-Mart representatives (who did not return calls from CP&DR) have not stated whether they are giving up on Eureka. Elsewhere, local opposition forced Home Depot to change sites in Santa Rosa and Santa Maria, but Home Depot eventually built stores in both towns, according to Norman. San Francisco residents and merchants continue to battle Home Depot. Activists in an unincorporated part of Auburn thus far have successfully fought off Home Depot, Wal-Mart and Target.

Interestingly, Wal-Mart would not be Eureka’s first big box. Costco has been in town since 1993, and Kmart opened there about a decade ago, Hamblin said.

People have talked of using Eureka’s Balloon Track for port-related industrial activity. However, a study found an abundance of coastal-dependent industrial property already available, and there are concerns about the extent of pollution at the old railroad yard, Hamblin said. Plus, Eureka’s isolated location and poor transportation connections — one north-south freeway, railroad tracks susceptible to bad weather and slides — argue against a major port, he said.

But Hamblin’s boss, Eureka City Manager Harvey Rose contended Eureka’s deep-water port is a major economic asset. The city is lobbying federal officials to receive a "foreign trade zone" designation, which would reduce or eliminate tariffs on raw materials imported to the zone.

The city now has a cut-flower producer that receives bulbs from New Zealand and The Netherlands. Also, an ice cream manufacturer that makes products for many different labels imports dried milk solids from New Zealand, Rose said. City officials believe the foreign trade zone would boost those businesses and attract other manufacturers.

The city also will host the second Eureka International Trade, Investment and Tourism Conference on October 22. Representatives of Mexico, South Korea and New Zealand are on the agenda.

While Eureka suffers from a remote location, its port is one day closer to Japan than is Long Beach’s port, California’s busiest, Rose said. Furthermore, truck drivers face no traffic congestion on the North Coast, as they do when traveling to and from urban ports, he boasted.

Rose said Wal-Mart would have increased Eureka’s sales tax base, but the city will move on.

"In economic development, you don’t typically go out and recruit retail. You recruit industry, and retail comes along when the numbers are right," Rose said.

National retailers evidently see the right numbers. Walgreens, Office Depot and Office Max are all coming to town, and Target is reportedly looking for sites.

Contacts:

Kevin Hamblin, Eureka Community Development Department, (707) 441-4160.

Harvey Rose, Eureka city manager, (707) 441-4100.

Al Norman, Sprawl-Busters, (413) 772-6289.