City Blocks Sale of Site Targeted by Wal-Mart

The West Covina City Council has fended off a Wal-Mart Stores Inc. foray into the San Gabriel Valley city, citing the giant retailer’s potentially negative effects on local businesses and workers.

In a 3-2 vote Tuesday night, the council rejected selling 48 acres of the former BKK landfill site for $12.8 million to Eclipse Development Group.

The president of Eclipse had said he was in final negotiations with Wal-Mart and Home Depot Inc. to erect stores on the 200-acre site, where West Covina officials also hope to build an 18-hole golf course and sports complex.

A Wal-Mart spokesman said that although the company has had talks with Eclipse, no deal had been reached.

Councilman Roger Hernandez, who sponsored the motion to reject the sale, said Wednesday that he heard from many residents who worried that Wal-Mart, the world’s biggest retailer, would drive local retailers out of business and replace high-wage jobs with ones that pay less.

“West Covina has over 1,600 businesses, and many of the services provided by these businesses would have been duplicated by a Wal-Mart coming into town,” Hernandez said. “Moreover, we want the new jobs coming into town to be well-paying jobs that respect our middle-class working community.”

The Bentonville, Ark.-based retailer’s plans to build 40 of its combination food and general merchandise Supercenter stores in California have been controversial.

The expansion of nonunion Wal-Mart into the grocery business threatens the state’s highly unionized supermarket industry and figures prominently in the strike and lockout of grocery workers in Southern and Central California. The supermarket companies have said they must cut labor costs to compete.

At least six California cities have approved Supercenters; Oakland and several others have adopted zoning rules that ban them.

In many of those cases, Wal-Mart has vowed to fight its exclusion via ballot initiatives.

West Covina Mayor Steve Herfert voted in favor of selling the site near the intersection of Amar Road and Azusa Avenue, saying the property was difficult to unload because it was in the middle of a block, had no easy freeway access and had a tainted history as a former dump.

What’s more, he said, the city needs the sales tax that the project would have generated -- between $1.1 million and $1.5 million, according to one city estimate.

“We worked on this for two years,” he said. “Now we’re back to square one.”

Douglas Gray, president of Irvine-based Eclipse, said he was surprised by the vote.

“We were instructed to bring in the best sales-tax generators we could for that site,” he said. “With Wal-Mart and Home Depot, we had two of the three largest sales generators within the retail industry.”

Hernandez rejected the notion that the state-of-the-art sports facility the city wants to build on the property couldn’t attract other retailers.

“The San Gabriel Valley has really become inundated with Wal-Marts,” he said. “We have a Wal-Mart to the north, to the south, to the east, to the west -- every adjacent city has a Wal-Mart.”