Walmart Fights for Store Expansion in Milpitas

Correction:  The election is November. The original article listed the June election.

Even though the Milpitas City Council last summer rejected a proposal by to expand its local store to include 24-hour full-service grocery and liquor sales, the world's largest public corporation refuses to give up.

The multinational retailer is gearing up for a signature-gathering campaign that, if successful, would put the issue on the ballot for Milpitas voters to decide. A resident filed the paperwork on Walmart's behalf with the city earlier this month.

“Walmart wants the community to be able to express their support,” said Angela Stoner, Walmart’s senior manager of public affairs, in explaining why the company will pursue a signature drive to collect more than 4,000 signatures in front of the store.

After the city processes the paperwork, as soon as next month, Walmart will have 180 days to gather the required signatures from locally registered voters to qualify for a ballot initiative in November. 

While Stoner declined to say how much money the company is prepared to spend on the election process, she allowed that Walmart “will have the necessary resources to insure that the voters have an opportunity to make an informed decision about our proposal.”

If Walmart starts a signature-gathering campaign in Milpitas, what are the odds of its success?

“They have a mixed history,” said Ken Jacobs, chairman of the UC Berkeley Labor Center. "They’ve won some and lost some."

Jacobs said Walmart put a referendum on the ballot in 2004 in Inglewood (Los Angeles) after that city council rejected the proposal for expansion. “Walmart lost after spending a significant amount of money; it backfired,” Jacobs said.

Walmart opened its Milpitas location in the McCarthy Ranch Shopping Center in 1994. Today, it employs more than 300 full-and part-time workers. Under the expansion plan, the store would grow from just under 132,000 square feet to 150,182 square feet. The building also would boast an updated façade and extensive interior renovations. About 85 new jobs would be added, according to the corporation.

Walmart had plans to expand the store for at least a year and worked with the city's planning department to produce an environmental impact report. The project was approved by the Milpitas Planning Commission on March 20, 2010, and was shot down the following June in a 4-1 vote by the City Council, with Councilwoman Debbie Giordano dissenting.  

The expansion continues to be a hot-button issue in Milpitas, with various city officials, business organizations and citizens taking sides.

Vice Mayor Pete McHugh, who voted against the expansion last year, said he believes the project is not right for the city. “I still believe that any benefits from Walmart’s proposed expansion would be more than offset by the negative impacts on our existing stores and employees and our community,” he said.

McHugh’s concerns are based on studies that have shown that in some communities where Walmart has expanded, existing stores have been forced to move or close, because they can’t compete with the giant retailer. The result can be blighted, empty storefronts and higher unemployment.

Jacobs said there is evidence that when a new Walmart goes in, competitors lower wages and benefits to compete. “For every Super Center that opens up, a couple of grocery stores shut down. It’s a direct threat to better-paying retail jobs.” 

Milpitas resident David Jordan was the one who filed the paperwork for Walmart. When the council voted down the expansion last year, Jordan said, “My wife and I decided to do something about it. I was appalled seeing our council members roll over and vote against something our community needs.”

Jordan noted that now sell groceries and said Walmart should also be allowed to sell them. 

“We’re citizens,” Jordan said. "We’ve been in this community for 27 years. We’ve watched our community develop and grow. We want to see this thing go forward.”

Another Milpitas resident, who has lived in the community for more than three decades, disagrees.

Ron Lind, president of the United Food and Commercial Workers, Local 5 union, noted that there are now about 400 unionized workers in Milpitas employed by Safeway, Nob Hill, Rite Aid, Lucky and Save Mart. He described positions in those companies as “good, middle-class full-time jobs.”

In addition, he said all of the companies, except Rite Aid, are headquartered in California, where the profits stay.

Walmart's headquarters are in Bentonville, AK.

Lind, who also serves on the San Jose/Evergreen Community College District Board of Trustees, expressed concern about Walmart’s non-union wages, benefits and employee working conditions, which are generally lower than union companies.

Many of Walmart's jobs are part time, he said. Lind noted that pressure from Walmart might force competitors like Safeway or Nob Hill to lower benefits and wages for their workers, or even leave town.   

Stoner countered that most jobs in the company’s stores are full-time. “Walmart provides good jobs with competitive pay and benefits. As of January 2011, Walmart’s average, full-time hourly wage for stores in California is $13.05 (per hour),” she said, adding that workers can also receive performance-based bonuses.  Stoner also noted that most employees, even those who work part-time, can become eligible for health benefits.

While not offering any comments about how smaller retailers might fare after a Walmart expansion, Carol Kassab, CEO of the Milpitas Chamber of Commerce, said the chamber "is in favor of the initiative process and looks forward to Walmart’s proposal to the chamber.”

—Frank De Smidt and Adelaide Chen contributed to this report.