Philadelphia Weighs “Predatory Superstore” Law

Date: 7 Apr 2005 | posted in: Retail | 0 Facebooktwitterredditmail

Three Philadelphia City Councilors—David Cohen, Richard Mariano and Frank DiCicco—have introduced an ordinance that would bar “predatory superstores” from locating within the city.

The ordinance defines predatory superstores as any store over 180,000 square feet or any store over 90,000 square feet that devotes more than 10 percent of its floor space to nontaxable grocery items. The latter would affect stores operated by Kmart, Target, Wal-Mart, and other retailers that combine general merchandise with a full supermarket under one roof.

In order to grant a variance allowing a larger store, the proposed ordinance stipulates that zoning officials must examine the store’s impact on existing businesses, jobs, wages, and tax revenue, and must conclude “that the applicant has demonstrated, by a preponderance of the evidence, that the proposed Predatory Superstore will not substantially lower the rate of employment, the level of wages and/or health care benefits, the amount of revenue generated by wage and property taxes or otherwise endanger the economic health and vitality of the surrounding community.”

The ordinance cites several reasons for regulating large-format retailers. It notes that they “have a demonstrable and identifiable negative and anti-competitive impact on many business enterprises and establishments operating or attempting to operate in the same market area.”

It says that superstores are regional in nature, drawing customers from a wide area and destroying the urban fabric of nearby neighborhood stores, and that they “are neither pedestrian nor mass transit oriented and instead encourage the unnecessary use of individual personal vehicles and attendant parking, pollution issues along with waste of scarce natural resources”

Unfortunately the ordinance’s limits are relatively mild given the strength of its explanatory introduction. Stores larger than 90,000 square feet that do not sell groceries, such as a Home Depot or Lowe’s, will have much the same impact on the city’s economy and neighborhoods. The limit of 180,000 square feet for these non-grocery retailers is quite large: it’s equivalent to more than three football fields. (See How Big is Too Big?)

However, there will be opportunities for citizen input and revisions to the measure in the coming weeks.

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Stacy Mitchell is co-director of the Institute for Local Self-Reliance and directs its Independent Business Initiative, which produces research and designs policy to counter concentrated corporate power and strengthen local economies.