Gigante Is Allowed a Grocery

After nearly three hours of debate, the Anaheim City Council granted a liquor license to Gigante late Tuesday night, paving the way for the Mexican grocery store chain to open its first Orange County supermarket.

The decision overturns an earlier vote by the Planning Commission and effectively ends a controversy that sparked allegations of racism in a city where about half the population is Latino.

“Logic has prevailed; now our job begins,” said Gigante USA President Justo Frias. “Our job is to have a first-class supermarket in Anaheim, and we will start on that ASAP.”

The issue had touched off a hot political debate over free enterprise and U.S.-Mexico relations and attracted national and local media coverage, leaving Anaheim officials stung by what they considered unfounded accusations of discrimination.

The council had to determine whether to grant Gigante’s liquor license application--considered essential for any supermarket. Without a license, Gigante’s first proposed supermarket in Orange County would have been hobbled, company officials said.

In front of a standing-room-only audience of more than 250 people, the council voted 3 to 1 to grant the license. Councilman Frank Feldhaus cast the only dissenting vote, saying that the city already has an overabundance of establishments selling liquor.

Mayor Tom Daly abstained from the vote because of a conflict of interest and was not present during the discussion. Daly is a consultant to an association of which Gigante is a member.

Although several people clapped and cheered after the vote, one audience member shouted at the council, “The blood is on your hands.”

“It’s an issue of property rights,” Councilman Tom Tait said. “It’s an issue of freedom to sell what you would like. It’s really an issue of fairness. When no other [Anaheim] supermarket has that restriction, I don’t see how we could do that to Gigante or any other business that comes into our city.”

Although the council approved the license, Gigante must first buy one from another business in the city--a condition store officials said was reasonable. Gigante already has bought a license that will allow it to sell beer and wine; in order to sell hard liquor they must purchase another license.

The vote came just hours after Gigante’s chairman, who flew to Anaheim from Mexico City, charged city officials with violating international trade agreements and of slighting a well-respected company just because it’s based in Mexico.

“You know and I know that this is not about liquor licenses,” said Angel Losada, chairman of the billion-dollar, Mexico-based supermarket chain’s parent company, Grupo Gigante.

“This is about allowing a successful and well-respected business, which happens to be headquartered in Mexico, to do business and compete head-to-head in the United States.”

Losada said that a denial is a violation of the North American Free Trade Agreement, which prohibits cities from holding a Mexico-based company to different standards from their U.S. counterparts.

Gigante has 270 stores in Mexico and three in Southern California, and wants to open a store in Anaheim Plaza, a renovated outdoor shopping mall just off the Santa Ana Freeway.

Losada said Gigante planned to invest $5 million in the Anaheim store and create 150 jobs.

Nativo Lopez, co-director of Hermandad Mexicana Nacional, an organization that assists Spanish-speaking immigrants, likened the city’s actions to “market racial profiling” by trying to direct where Gigante should be allowed to open.

At the meeting, more than a dozen people spoke out against Gigante.

Some said Anaheim, which already accounts for one-quarter of all the county’s 2,000 liquor licenses, doesn’t need any more.

A few speakers, including anti-immigration advocate Barbara Coe, said the city doesn’t need a business that caters to Latinos because it would attract illegal immigrants and create “barrios” within the community.

Anaheim resident Johanna Hof also accused Gigante’s public relations firm of playing “the race card” and stirring up neighborhood hostility.

Store officials already stopped pursuing one shopping center near Knott’s Berry Farm after Mayor Tom Daly encouraged Frias to look elsewhere.

Daly told Gigante that the area, zoned for redevelopment, was better suited for a retail business that would draw more sales tax dollars.

Store officials complied, only to later find out that the shopping center owner was negotiating with Albertson’s, another grocery chain.

Gigante officials kept searching for a location and eventually settled on a vacant store in Anaheim Plaza. About 60% of the area’s residents are Latino.

Elisa Stipkovich, Anaheim’s redevelopment director, objected to that site as well, saying the market didn’t fit the city’s plans to expand the discount retail complex to draw people from beyond the immediate neighborhood.

In a controversial memo, Stipkovich accused Gigante of being too Latino and of failing to serve the public at large. She added that Gigante’s product selection “catered primarily to the Hispanic market” and city staffers were “surprised to find that the store signage and music were predominantly in Spanish.”

Stipkovich said the city’s concern has nothing to do with ethnicity. Rather, she said, the city simply does not want a grocery store in the mall.

Gigante officials and Latino leaders still frequently cite Stipkovich’s memo as evidence of discrimination. Anaheim Plaza owners and property managers also said that city officials asked them to look for mainstream grocery store tenants.

Despite Stipkovich’s concerns, Gigante officials signed a lease at Anaheim Plaza. They were preparing to move in when they were denied a liquor license by the city Planning Commission.

Staff initially recommended that the Planning Commission deny Gigante’s request because the area is saturated with liquor licenses.

They amended that recommendation to the City Council, saying that granting a license would be acceptable if Gigante can transfer an existing license within a three-quarter-mile radius.

But Gigante’s attorney said that obstacle was the result of a realization that staff couldn’t “come in the front door with a gun,” so instead “came in the back door with a knife.”

In the end, the council lifted the three-quarter-mile restriction.