City Council Moves to Close Walmart Loophole

Elk Grove City Councilmembers Wednesday gave developers of in the Madeira neighborhood more time to address residents’ concerns about the controversial project, delaying a decision on the store’s fate until July 27.

But recent changes to the city’s zoning code created a loophole that could let the big box retailer build its 99,585 square-foot store anyway—with very few restrictions— according to an attorney for the neighbors.

"I think the fix had some unintended consequences,” Councilmember Gary Davis said.

To address the loophole, the council has called for a special meeting at 4 p.m. Friday to put a temporary halt on new general retail stores, grocery stores and supermarkets larger than 50,000 square feet, giving staff time to review the city’s zoning code—again.

If approved, the 45-day moratorium would go into effect immediately.

“The new definitions were inserted deep in the heart of the code,” said Peter Gaffney, one of the nearby residents who sued Walmart and the city over the project.

“It went by almost everybody…and apparently some of the city council as well.”

In July 2007, the City Council amended its zoning code to regulate large, retail discount stores such as Walmart. Last month, councilmembers approved changes that were supposed to clarify the city’s definitions of grocery stores, retail discount stores and retail supercenters.

Under the changes, which took effect today, stores larger than 100,000 square feet would require a conditional use permit, allowing city officials to restrict such things as hours of operation. Smaller stores, however, are not subject to additional restrictions if more than 10 percent of the floor space is dedicated to non-taxable groceries.

Friends of Madeira attorney Brett Jolley pointed out that under the new definitions, retailers like Walmart could get around stricter regulations by expanding a new store's groceries department.

“So by adding more groceries, Walmart gets out of the conditional use permit requirements, which is odd because the whole purpose of the (zoning code amendment) was to regulate superstore uses that combine grocery and retail,” Jolley said at Wednesday night’s council meeting.

In Elk Grove, grocery stores are defined as stores less than 100,000 square feet that dedicate more than 10 percent of its floor space to nontaxable groceries.

Walmart is trying to build a second Elk Grove store on the southeast corner of Bruceville Road and Whitelock Parkway using entitlements previously approved for a larger Target store.

Earlier this year, however, a Sacramento County Superior Court judge ruled that the Walmart project had to go through a public review process.

Jolley said the zoning code would have to be changed again if the council wanted to weigh in on the proposed Walmart.

“I will bet dollars to doughnuts, if it’s allowed to stay as it is, Walmart will come back and say, ‘We meet the definition of a grocery store, which is permitted by right and you have no say over us,’” Jolley said.

Councilmembers expressed concern about the apparent loophole and asked staff to look at changing it.

“I’m concerned about defining something that looks like this as a grocery store, and that’s the impact of that component of our zoning code,” Davis said.

Vice-Mayor James Cooper also wanted to know who was responsible for making the changes, and asked staff to track down the information.

Planning Director Taro Echiburú said city staff will bring the zoning code issue back to the city council on July 13.

The proposed moratorium wouldn’t affect projects already subject to conditional use permits, Echiburú said.

The special meeting will be held 4 p.m. Friday at , 8400 Laguna Palms Way.