Moreno explained a new trend in retail is for a gigantic store — some as large as 200,000 to 300,000 square-feet on the East Coast — to sell items such as apples or eggs at prices too low for any other competitor to even approach, thereby getting the consumer in the front door to spend on other items.
Further, these massive stores are not like Costco Wholesale or Sam's Club, where everything is sold in bulk and a membership is required.
To prevent such a situation, which Moreno said could do severe damage to grocery stores, the independent grocers proposed an ordinance amending the city's general plan by adding language to city zoning codes.
If approved by the City Council, sections 17.05 and 17.07 of the zoning ordinance governing commercial and industrial districts would read: "For ‘commercial uses' exceeding 100,000 square-feet of ‘gross floor area,' the total ‘nontaxable merchandise floor area' shall not exceed 5 percent of the total ‘gross floor area' of the building."
Translated, the ordinance amendment would limit the amount of sales-floor space devoted to nontaxable items like food to 5 percent or less if that store is more than 100,000 square feet. Grocery stores typically come in well under the 100,000 square foot limit.
While there has been no talk that such a store is interested in the Calexico area — according to one source big box stores have yet to establish in California — cities throughout the state are preparing by establishing such ordinances.
Similar general plan amendments have already come to pass in Tucson, and California communities such as Huntington Beach, Simi Valley, Santa Maria and Arroyo Grande.
According to legal documents provided to Calexico City Attorney Mike Rood by a consultant formulating the amendment, developers have tried to claim antitrust violations with such ordinances but cities and city officials are exempt from antitrust damages, according to City of Columbia v. Omni Outdoor Advertising.
Further, the legal documents state, such amendments have been made by city councils looking to eliminate retail overcrowding.
Still, this ordinance and its language was proposed by those who would be hurt by big box stores. While the independent grocers have the local clout with which to get such an ordinance through the city, the idea was brought to their attention when a consultant working for supermarket giants like Luckey's and Ralph's, which would also be hurt by the big box stores, contacted local grocers.
"We've been working on this since October. We've done the presentations, the public hearings. Now we're going before the council," Moreno said. "I would say that us independents, we're supporting this 100 percent."
When asked about the proposed ordinance, Calexico City Councilman John Renison said he does think local businesses that give much back to the community should be protected, but he conceded he is apprehensive about weighing in with his support at this juncture.
"I want to hear the pros and cons and the legal aspect of it, and how it's worked in other cities," Renison said. "I think we need to make an informed decision.
"But I do feel that it's important to listen to what the independent grocers have to say," he added.
Staff Writer Richard Montenegro can be reached at 337-3453.