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DISCUSSION TO CONSIDER AMENDING OR REPEALING THE STOCKTON BIG BOX ORDINANCE ADOPTED BY CITY COUNCIL ON AUGUST 14, 2007
recommended action
RECOMMENDATION
This is an informational and discussion item. The City Manager requests Council input and direction as to whether it is an appropriate time, given our staffing levels and resources, to allocate time to evaluate applications for warehouse retail development that would require repeal of the “Big Box Ordinance” adopted on August 14, 2007.
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Summary
On August 14, 2007, the City of Stockton City Council amended its development code to not allow in certain zoning districts, the development of warehouse retail stores of 100,000 square feet and larger if warehouse retail stores devoted 10 percent or more of the total sales floor area to the sale of nontaxable merchandise. This code amendment is also known as the Big Box Ordinance. Membership stores are exempt from this code. Increased flexibility to consider proposals that include warehouse retail would encourage development of large retail centers with anchor tenants and additional retail services in areas that currently lack services.
As the economy recovers, it is helpful to know if Council is open to amending the ordinance and considering applications that include warehouse retail stores. The current ordinance discourages the investment required of developers to turn concepts into applications. The City Manager requests input regarding Council’s willingness to reevaluate the warehouse retail limitations to determine the level of staff resources that should be invested in evaluating applications from developers that include these projects. If not, minimal staff resources will not be invested in analyzing such projects. If so, staff resources would be invested and if projects have merit the necessary ordinance changes would be evaluated as well.
DISCUSSION
Background
On August 14, 2007, the City of Stockton City Council amended its development code to not allow in certain zoning districts, the development of warehouse retail stores of 100,000 square feet and larger if warehouse retail stores devoted 10 percent or more of the total sales floor area to the sale of nontaxable merchandise. This code amendment is also known as the Big Box Ordinance. Membership stores are exempt from this code.
For illustration purposes, one particular zoning district states the following:
16.24.110 CL (commercial, large-scale) zoning district standards.
The following standards shall apply to land uses and development within the CL (commercial, large-scale) zoning district:
E. Warehouse Retail Stores-Limitation on Use. Warehouse retail stores located in the CL zoning district that devote 10 percent or more of the total sales floor area to the sale of nontaxable merchandise shall contain no more than 100,000 square feet of gross floor area, except for stores charging membership dues or otherwise restricting merchandise sales to customers paying a periodic access fee.
Since the adoption of the ordinance, the recession impacted the City of Stockton similar to many other cities in the surrounding region in that the market prospects for the overall commercial development of new large format warehouse retail stores significantly diminished. Recently, development opportunities began to resurface as the economy recovers. Developers are again evaluating the viability of retail projects and some have approached with City with an interest in warehouse retail options. However, the developers are not willing to entertain an extensive and often costly and resource extensive application process given the current code restrictions for these types of retail stores.
This discussion item is brought forward to receive Council’s input regarding whether there is interest in amending or repealing the ordinance restricting warehouse retail stores. Early input will help determine whether applications for warehouse retail projects should be evaluated and whether an ordinance change should be proposed. If there is an interest in potentially amending the ordinance, staff has identified the following questions and potential issue areas. These issues and questions were discussed in the adoption of Stockton’s Big Box Ordinance and are also similar to the City of Sacramento’s adoption and subsequent repeal of its Big Box Ordinance (interim ordinance adopted February 15, 2005; permanent ordinance adopted April 18, 2006, ordinance repealed August 8, 2013).
The questions and issue areas to be addressed are as follows:
(1) What transpired in the regional retail market over the last 8 years since the ordinance was adopted?
(2) The development of these types of stores have fairly large trade areas. Did the ordinance that was adopted by the City of Stockton within a regional economy have the desired effect or preventing potential blight? In other words, did the City stop warehouse retail stores from impacting our neighborhoods and existing retailers or did these types of warehouse retail stores situate outside of the city borders and in nearby jurisdictions?
(3) Has there been sales tax loss as a result of this ordinance as warehouse retail stores were built in other cities?
(4) Is this a land use issue or is it a competition issue effectively, and can it be addressed through zoning with our existing ordinance and General Plan policies? The Big Box Ordinance was adopted in August of 2007 and was reviewed against the 1990 General Plan. On December 11, 2007, the City of Stockton 2035 General Plan was adopted. How does the Big Box ordinance reflect the current policies of this updated General Plan?
(5) Does the City already have adequate land use protections and tools in place to properly evaluate warehouse retail stores? Is a citywide ordinance still the effective tool or is a case by case analysis such as a condition use permit for the individual project a better process?
(6) Is Stockton at a competitive disadvantage with surrounding jurisdictions?
(7) Does the warehouse retail store restriction prevent effective anchor stores in retail development, and limit the ability to attract other retail services for a community shopping center?
(8) What are the industry and market trends for retail and how does a Big Box Ordinance fit into that trend?
(9) Is this ordinance reflective of the City’s Economic Development Strategic Plan adopted in February of 2015?
(10) Do these warehouse retail stores serve a growing need for a community or neighborhood that is underserved or does it impact it negatively?
(11) Has the sales of groceries (nontaxable items) evolved in the last eight years since there are now more grocery outlets that do not meet the definition of these types of warehouse retail stores?
The questions identified above would require additional analyses. As previously stated, staff believes that these issues and concerns were similarly evaluated in the development of this ordinance. Therefore, these questions would dictate a similar analyses in order to repeal the Big Box Ordinance.
In addition, there was significant public testimony for and against adopting the ordinance. Staff believes a dedicated amount of outreach may be necessary to obtain input prior to bringing an ordinance amendment and/or repeal of the original ordinance.
Should the Council provide input and direction to the City Manager to work on removing this restriction, staff resources will be reallocated to work on this particular effort.
Present Situation
The current Big Box Ordinance was adopted on August 14, 2007 and became effective September 13, 2007. It has been in effect for over 8 years.
FINANCIAL SUMMARY
There are no financial impacts at this time.