June 26, 2011

What if Wal-Mart Leaves Poway?

We moved to Poway in 1976. That was 35 yrs ago. During that time there have been many grocery stores, restaurants and little shops in Poway that have come and gone.

The first grocery store we shopped at was the Alpha Beta on Poway and Pomerado Rd. It was located about where Michael's is now. Back in those days, we almost never ran to the store without running into someone we knew. I think I spent as much time chatting outside in front of the store as I did shopping inside.

The next grocery store I remember shopping at was the Big Bear store, which was located where the empty Dixieline is now. The store's roof leaked in the rainy season and we had to walk around buckets and pails. They were always going to move and build at Poway and Silverlake, but they never did. Big Bear moved out and sold the land they owned. Eventually a Lucky was built there.

The first Vons in Poway was located where Henry's is. Later Vons moved to their current location on Poway and Community Rd. I can still remember their grand opening. I won a $100 shopping spree. I had something like 3 minutes to fill a shopping cart and I could keep anything as long as it didn't exceed $100 total value. There were real sweet about it and let me pick out some meat ahead of time. Then I had to make a spectacle of myself and dash down the aisle and grab the meat I had picked out.

Vons built a much larger store on Poway Rd near Pomerado, where CVS and Pic N Save are. I guess the town wasn't really big enough for 2 Vons, so the bigger one was shut down.

The point is, stores open and stores close. Same with lumber stores, nurseries, restaurants, car dealerships and any number of other retail venues. What is here today might not be here tomorrow.

What will happen if Wal-Mart moves out? Let me rephrase that. What will happen when Wal-Mart moves out? Wal-Mart is the biggest store in dowtown Poway. The Wal-Mart expansion is going to add about another big grocery store's worth of square footage to the current Wal-Mart. That will be one h-u-u-u-u-g-e store. What could possible move into that much space in downtown Poway?

It's not unlikely that Wal-Mart will move out at some time. That's just part of retailing. Wal-Mart's business practices make it even more likely that it will happen. Wal-Mart likes to saturate an area, then when the competition has moved out, they thin out their own stores. Once Wal-Mart gets a bigger toe-hold in San Diego, they could locate their stores closer to the freeways and leave the Poway store vacant.

And when they do move out, what will happen to the old store? Poway's Wal-Mart was built in 1992. Just before it was built, K-Mart closed. It took 2 years to get that building leased. And even then, the building had to be divided into smaller stores to get tenants. The current Wal-Mart is much larger than the old K-Mart, and the expanded Wal-Mart will be even larger. It could be a real problem getting it leased if Wal-Mart closes the Poway store.

According to Sprawl Busters, Wal-Mart had about 350- 400 "dark stores" in 41 states for sale or lease in 2005. That is up from 333 empty stores in 31 states in 1999. I do not have exact current figures, but Wal-Mart lists 103 sites for lease and 40 vacant building and 623 properties for sale on Walmart Realty. The 623 properties are land in a planned or current Wal-mart shopping center. Wonder which one they are pushing more, land sales next to future Wal-Marts are old vacant buildings?

Sometimes Wal-Mart will build a bigger store very close to another Wal-Mart in a town. When the old store closes, Wal-Mart may have ownership or leaseholder rights to prevent a competitor from moving in. Many Wal-Marts sit empty, attractive only to vagrants and vandals.

What can Poway do to prevent Wal-Mart from leaving a blighted big-box store in the center of town? One thing would be for Poway to adopt a store cap size. Our community is better off with buildings that are sized right for Poway, and can be leased when a tenant leaves.

Even if we missed the chance for a store size cap, Poway can take some steps (from newrules.org) to prevent getting stuck with a "dark store". Poway could
1) Require developers to post a demolition bond that can be used by the city to demolish the structure and maintain the site should the store become vacant.
2) Adopt a dark store ordinance that mandates that property owners market empty buildings as soon as they become vacant and voids any clauses in the retailer's lease that constrains the owner from leasing the property to another retailer.
The Poway Wal-Mart site is owned by Wal-Mart, but the ordinance should be crafted to cover any leased or owned big box store that may become vacant. Because large corporations have their own teams of self-serving lawyers, great care should be taken to make sure the ordinance is clear, specific and enforceable.

Davenport, Iowa had a dark-store agreement. Wal-Mart planned a larger store and vacated their original store. The agreement Davenport had with Wal-Mart required that Wal-Mart make "reasonable best efforts" to sell the store. Whatever that means. And Wal-Mart could reject offers that were below "book value " for it. Guess who determines the "book value" of the property?

Davenport staff forgot to specify in the agreement that Wal-Mart could not refuse offers that were above book value. After 2 years of no sales, the city has the option to buy the property or find another buyer. And the cost of demolishing the building, if necessary, would be paid by the new owner, not Wal-Mart.

Poway needs a dark store ordinance if they allow big box stores in the downtown area. And they need to make sure their ordinance is written better than the one Wal-Mart snookered Davenport with.

June 2, 2011

Ma & Pa Kettle Math, Poway Edition

It's been a really frustrating day. This post is a bit of a rant. You might not make it through the whole thing. So, I'm going to post this reminder at the top: If you or anyone you know has some thoughts on the Poway Wal-Mart expansion, either pro or con, NOW is the time to send them off to the council. If you like, you can comment on anything in the DEIR (draft EIR), or you can just email a note to the councilmembers telling them why you do or do not want the Wal-Mart expansion.

Send the emails to:

Note: Near the bottom of this post, there is a link to an interesting blog written by Joe St Lucas. And don't worry, there's no heavy math terms in his post, although the number 30 will figure in. Be sure to click on the link and check it out.

And now to my whining.

If I haven't mentioned it lately, let me mention it again. I believe in government. I like having roads and schools and hospitals and cops to round up the bad guys. I like a little advance warning when a tornado is coming and a little help afterwards when our community is devastated by fire. Heck, I like medicare and social security too. I hate thinking about old people eating cat food to survive. I'm not one of those "shrink government down and drown it in a bathtub" people. But today, I am frustrated. Really frustrated. If some crazy wacko tea-partier goes on a bender about how government is the problem, I'm not going to interrupt. Not today.

I'm frustrated because the people running my local government seem to be saying and writing a lot of nonsensical things. For example, for 15 years the city has been saying that traffic sucked so bad on Poway and Community and Midland Rd., that they were exempt from the state law which requires that they permit granny flats to be built. Now that Wal-Mart wants to build a bigger store that brings in more traffic, the City decided to use a completely different method for evaluating traffic that concluded traffic doesn't suck anymore. It is a piece of cake to get through town, as long as you don't mind waiting through a couple of rotations of the traffic lights.

So I was already POd about that. Then, on next Tuesday's Poway council agenda, there is an item called "the draft Urban Water Management Plan(UWMP)" that really set me off. Poway (and all the other cities) are required by the state to prepare an UWMP. The data that is submitted is supposed to help the state plan for future water needs and also to set some water conservation goals for each jurisdiction. Part of the data that must be included in this document is the gallons per capita per day(GPCD) used by Powegians. To calculate GPCD, the total amount of water used in Poway over a certain period of time is divided by the population (using city water) and also divided by the number of days in the time period. For their calculations, Poway is using old Sandag data which estimated that the population of Poway was 52,056 in 2010. The numbers from the 2010 census are in and Poway's official population in 2010 is 47,811. So Sandag got it wrong, they overestimated by 4,245 people. But why is Poway using known faulty data in their UWMP? Could it be because dividing by a large population makes it look like Poway is using less water per capita than we really are? What value is this data when it is so far from being accurate?

I have another bone to pick with the City over the UWMP. It is an old one, which I have harped on before. In the report, there is a copy of a form Poway has to submit to the California Urban Water Conservation Council (CUWCC). On that form, Poway declares that they use conservation pricing for both their water and sewer pricing structure. Poway's 2-tier water rate structure is barely conservation priced. The only people who are given any incentive to conserve are the folks who use 200 or more units in a billing cycle. 200 units equals 149,600 gallons of water. There are only a handful of people who ever use that much water in Poway, so I guess you could say we have a very "elite" water conservation plan. For the vast majority of us, there is no conservation incentive at all.

So maybe they can bluff their way through calling the water rates "conservation priced", but, no way, no how, can anyone of a reasonable, minimally educated mind, declare that Poway's wastewater (sewer) fees are conservation priced. For one thing, CUWCC actually defines conservation pricing and Poway's sewer fees don't meet the criteria. Nevertheless, the City is claiming that they use an "increasing block rate" structure for billing for sewer.

CUWCC defines an "increasing block rate" as one "in which the unit rate increases as the quantity of units purchased increases". Poway's sewer rate structure is just the opposite. The more the customer uses, the cheaper the unit price is. It costs $12.49/unit for 2 units of wastewater and it costs $4.41/unit for 10 units and $2.64/unit for 20 units. The more one buys, the cheaper it gets, per unit. So how does that incentivize someone to conserve?

Today I have been going round and round with Kristen Crane, the Poway Utilities Administrator, who filled out that CUWCC form. She is insisting that Poway's wastewater pricing is an increasing block rate structure. It is so frustrating. Rates are taught in grammar school. You'd think somebody making $100,000 or so (courtesy of the taxpayers sewer customers) would know what a rate is!

I am sounding like those tea-stained loonies. Time to take a deep breath and think. Maybe Ms Crane isn't paid big bucks because she has a firm grasp of math and good comprehension skills. Maybe it is because she is willing and able to obfuscate. Otherwise, why would she so obstinately insist that Poway's sewer pricing structure is an "increasing block rate"?

It's been one of those days, when the people who "work for me" seem to be highly paid pencil pushers. Is government bloated with civil servants who spend their days filling out meaningless forms with bogus data? Why bother?

Like I said, I am very frustrated.

And now, as promised, here is the link to Joe's blog. I don't want to give the whole thing away, but let me give you a little hint. Would you say that a council member who sweeps aside a city rule, for the benefit of his sons and their friends, is acting ethically?