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State Measure Would Box In Local Communities on Growth

There is legislation moving through the Legislature that would harm communities seeking to draw large-scale retail business as a means of helping boost local revenue. Senate Bill 469 would add a layer of regulation to business by requiring another economic and community impact analysis report on top of the current requirements under the California Environmental Quality Act and extensive public hearings for retail developments that are 90,000 square feet or larger.

Angelenos may be familiar with this type of policy, as SB 469 mandates a similar economic impact study to what the city of Los Angeles has in place for approving large-format stores over 100,000 square feet. And cities have the authority and the right to do what is best for their communities. Unfortunately, this legislation is not only poorly written but it would remove local governments’ authority to do what is best for its citizens and install a one-size-fits-all law that may not be best suited for each community.

While elected officials, business leaders and community groups already believe this bill to be unnecessary bureaucracy, the California Retailers Association commissioned an independent study to analyze the practical effects of SB 469 on California communities.

Downtown L.A.-based Kosmont Cos., a trusted network of analysts with expertise in land-use, urban decay and net/fiscal impact analyses on behalf of project proponents, performed this analysis and found several issues with SB 469 and reported its findings in “Analysis of SB 469,” June 2011. Specifically, they found that not only is this bill not needed, but also it just won’t work.

The study concludes: “The greatest obstacles to the satisfaction of the proposed bill include the vagueness and overly broad nature of some of the required elements, an uncertain threshold of accuracy, the potentially subjective nature of some of the required assessments, and the likely exposure of all parties to litigation and delays associated with agreement on findings and fulfillment of the proposed law, SB 469.”

The Kosmont study found several major problems with the way the bill is written, and each red flag poses major challenges to the effectiveness of this bill.

First, the bill proposes vague requirements and subjective assessments. The excessively vague nature of SB 469 and its many subjective assessments may create burdensome hurdles and will foster an environment of litigation.

For example, the “approval” of the economic impact report is undefined and provides no clear direction. There is no mention of who the approval needs to be from; it does not indicate by what process the approval must be done; it does not indicate what criteria is needed for the approval or what decision-making entity determines whether the economic impact report is adequate. In other words, the bill calls for an economic impact report but gives no guidance for how it should completed.

Second, the bill actually provides environmental disincentives. The analysis found that SB 469 is so over-reaching that it extends to “the issuance of any entitlement, including, but not limited to, a building permit.” For example, if a superstore desires to retrofit its building by installing solar power systems and other sustainable improvements to help reduce greenhouse gas emissions, SB 469 would require a complex and very expensive economic impact report and a public hearing, just to pull a permit – which would be a disincentive to ever make any sustainable retrofit improvements. That’s exactly the wrong way to promote environmentally sound policies, particularly here in Southern California.

But here is the most surprising thing about this whole debate: Local governments like Los Angeles already perform economic impact statements and carefully vet these superstores before they are built. Why would the state government need to interfere?

When SB 469 was introduced, we believed it to be bad business legislation. However, with this study, we know it is not just bad for business, it’s bad for California and it’s bad for Los Angeles.

I encourage legislators to look hard at SB 469 and determine whether their districts need another ambivalent law to decipher, another policy that is actually a disincentive and more duplicative policies that inhibit economic opportunity.

Bill Dombrowski is president of the California Retailers Association.

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