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San Marcos kills second Wal-Mart; San Diego pondering the Supercenter

More than 60 percent of San Marcos voters killed a rezone Tuesday that would have allowed a second Wal-Mart to be built in their city. But the world's largest retailer is fighting hard on other fronts.

The measure would have ratified the San Marcos City Council's rezoning of 20 acres at Melrose Drive and Rancho Santa Fe Road in the area next to California State University, San Marcos, to permit construction of the Wal-Mart (NYSE: WMT).

Wal-Mart spokesman Peter Kanelos said the existing and the proposed Wal-Mart stores would have generated a total of $1 million in tax receipts for San Marcos annually.

Meanwhile, the San Diego City Council's Land Use and Housing Committee was expected in January to consider a measure that might have restricted the construction of big-box retailers of 100,000 square feet or larger throughout San Diego. With many objections from area residents and home improvement retailers such as Home Depot (NYSE: HD), it appears the city has backed off from that position. The city is now seeking more input before any recommendations are made, but supermarkets embedded within big-box retailers appear to still be very much on the table.

It now seems the measure, which is subject to any number of amendments, will come before the San Diego City Planning Commission on April 8 and the Land Use and Housing Committee on April 21. Depending on those hearings, the proposal could come before the San Diego City Council in late spring or early summer.

Wal-Mart said while it has no immediate intention to open Supercenters here, it intends on keeping the option open, and will fight the proposed ordinance.

Meanwhile, battles over Wal-Mart stores have been going on elsewhere. Wal-Mart gained a slim 53.8 percent to 46.2 percent victory in Contra Costa County this week when it managed to defeat Proposition L. That measure would have barred the construction of all big-box stores with more than 100,000 square feet, regardless of whether they had a grocery component or not.

On April 6, city of Inglewood residents will vote in a special election to consider whether or not a Wal-Mart Supercenter should be allowed adjacent to Hollywood Park's home stretch.

The city of Inglewood passed such a measure banning big-box retail projects with grocery stores last year, but the ordinance ban was subsequently overturned in court. Wal-Mart then came up with a measure of its own that, if approved, will allow the Supercenter.

The very first Wal-Mart Supercenter in California held its grand opening of a 219,000-square-foot store in La Quinta on Wednesday. Kanelos said at stabilization in about two years, that property is expected to bring about $700,000 in tax receipts to that desert city. The grocery sections of a Supercenter typically run about 60,000 square feet, or roughly the size of a large supermarket.

As a new Wal-Mart Supercenter opens in La Quinta, new Superstores are in the works in Palm Desert and Palm Springs. These centers are expected to bring 1,350 jobs to the greater Coachella Valley area. The 215,222-square-foot Palm Desert Wal-Mart Supercenter is scheduled to open in late summer 2004. The Palm Springs proposal is slowly working its way through the planning process.

Wal-Mart plans to add about 40 Supercenters in California within the next four or five years and has plans to open as many as 230 Supercenters this year in the United States, including relocations of smaller discount stores, such as the outlet in La Quinta. Wal-Mart, which opened its first Supercenter in 1988, has 143 discount stores in California.

Kanelos said the opposition to the Supercenters, as well as the San Marcos store and other Wal-Marts, has come from unions and competitors who want to preserve their market share.

The struggles for and against Wal-Mart have also come to the city of West Covina, which recently declined to sell a prime parcel to the firm. The retailer is now considering its next move.

Kanelos points to Wal-Mart's strength, and argued that the retailer has improved every neighborhood it has entered. The firm employs some 153,000 workers in California, and 1 million in the United States in 3,418 stores across the country.

Wal-Mart, while one of the largest employers in America, has long been criticized for paying wages that would be tough to live on in San Diego County. Wal-Mart does not release wage statistics, but Kanelos has said there is not a single person in the entire organization who makes minimum wage.

Along with being pilloried by labor organizations and in the press, the San Diego County Taxpayers Association four years ago released a survey concluding that big-box stores could end up costing the county as much as $221 million in lost wages and benefits per year. While conceding that it doesn't have union benefits and wages, Kanelos suggests the retailer's lower prices make it more affordable to those who need Wal-Mart's goods most.

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