California Town Uses Eminent Domain To Block Wal-Mart
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

SAN FRANCISCO – America’s largest retailer, Wal-Mart, already besieged by anti-globalization protests, discrimination lawsuits, and critical documentaries, now faces a new threat: the use of eminent domain powers to seize its real estate.
Wal-Mart opponents in Hercules, Calif., a small city 20 miles north of Oakland, have persuaded local officials to begin eminent domain proceedings to take possession of a 17-acre parcel that the company hoped to develop into a new store.
“The city is being very brave,” a Hercules resident who supports the effort to drive Wal-Mart off the land, Jeffra Cook, told The New York Sun. “It is a big fight. It’s a brave step.”
The attempted land seizure is a kind of turnabout for Wal-Mart, which has repeatedly encouraged other local governments to pursue eminent domain takings to clear the large lots the company needs for its stores.
“It sounds like it’s, maybe, what’s good for the goose is good for the gander,” a Glendale, Calif., attorney who specializes in eminent domain law, Arthur Hazarabedian, said in an interview yesterday. The lawyer said he knew of several cases in which eminent domain was used to build Wal-Mart stores but had never heard of the technique being employed to block a store. “That’s a change of pace,” he said.
A spokesperson for Wal-Mart, Kevin Loscotoff, said the company was disappointed with the city’s move.
“We believe it’s unfortunate that the city is looking to play politics with such an important project for the future of Hercules,” he said.
Mr. Loscotoff said the new store would create at least 275 new jobs in the community and would help the city recover millions of dollars in sales taxes that local residents pay in neighboring jurisdictions.
Some locals are deeply suspicious of Wal-Mart’s claims that the store will boost the local economy. “The history of Wal-Mart in a small town like this is deplorable,” Ms. Cook, a performing artist who has lived in Hercules since 1988, said. “They promise all sorts of things in revenue and then turn right around and leave the town and take whatever revenue they purported to earn.”
Ms. Cook said Wal-Mart’s low prices would undermine local retailers. “They’re a predatory company. They go around and check all the other businesses, lower prices to the lowest price in town, then when all the other businesses are gone, Wal-Mart would raise their prices,” she said.
Wal-Mart’s original proposal for the site called for a main store of 140,000 square feet, which the company said was about average for its California stores. After getting feedback from the city, which had earlier given clearance for stores of up to 64,000 square feet on the lot, the proposed Wal-Mart was scaled down to about 99,000 square feet. The company also agreed that its store would carry groceries.
A local group, Friends of Hercules, joined with another developer last year to commission a review of Wal-Mart’s claims about the impact of the new store. The review, done by Strategic Economics of Berkeley, warned that the Wal-Mart complex would spawn stores such as Subway, EB Games, H&R Block, Popeye’s Chicken, and Cingular.
“Given the city’s general plan goal to provide convenience and neighborhood serving retail that targets its population and its demographic characteristics, these are not the types of retailers the city should be pursuing,” the review concluded, according to a description posted on the community group’s Web site.
The roughly 25,000 residents of Hercules have average family incomes of more than $80,000, well above the level of surrounding communities. At community meetings, residents have argued that Wal-Mart and the stores usually found near it could drive upscale retailers away from the “new urbanist,” pedestrian-oriented promenade the city is trying to develop. Almost no one has spoken out in favor of the proposed Wal-Mart.
“We don’t need baby diapers and shampoos, what we need are restaurants and nice little shops,” one local resident, Philip Simmons, said in an interview yesterday. “Wal-Mart is preventing the city from moving forward. Wal-Mart can sit on that land forever because it’s a drop in the bucket for them … If that isn’t a case for eminent domain, I don’t know what is.”
A spokesman for a national group critical of eminent domain takings, the Castle Coalition, said seizing the property from Wal-Mart would be wrong if the city is simply planning to hand the land over to another developer. “If they do intend to transfer it to another private owner, it’s an abuse like any other,” the spokesman, Steven Anderson, said. “It doesn’t matter whether Wal-Mart may have benefited from eminent domain in other situations.”
Mr. Hazarabedian, the expert on eminent domain law, said the city could have legal difficulties if there is no clear public use for the property. “If they’re doing it to protect other retailers, they may have a problem,” he said.
The mayor of Hercules, Trevor Evans-Young, said he could not comment on the Wal-Mart case. “There’s a potential lawsuit here, so we’re not saying anything,” he said.
The city had already made an offer to buy the land from Wal-Mart prior to initiating the eminent domain process last week.
An official with the local branch of the Sierra Club, Michael Daley, said he had no qualms about invoking eminent domain to block Wal-Mart. “In a lot of cases, we would be appalled by what happens with eminent domain,” he said. “This seems like a last resort, but of course when you’re dealing with Wal-Mart, it’s no surprise you need the last resort.”