Little City of Hercules Flexes Muscle Against Wal-Mart

Wal-Mart Stores Inc. (WMT) is known for its hardball tactics, but the little city of Hercules has come up with some muscle of its own in a bid to keep the big-box retailer out.

The City Council in the affluent Bay Area suburb will hold a hearing Tuesday to consider using the power of eminent domain to seize the 17 acres where Wal-Mart intends to build a shopping complex. It's a novel approach to a fight that has taken place in communities across America.

"We want something good to take that place," said Jeffra Cook, a Hercules resident since 1988. "There aren't a lot of good stories about Wal-Mart."

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Cook and other opponents in this bedroom community of 24,000 worry that Wal-Mart will drive local retailers out of business, tie up traffic and wreck its small-town flavor.

Wal-Mart spokesman Kevin Loscotoff accused Hercules of "playing politics" and said turning down a Wal-Mart would deprive the city of much needed revenue. He said some residents want a Wal-Mart in their community.

"We've attempted to meet with the city and haven't been given return phone calls or e-mails," Loscotoff said. "In a case like this you'd certainly hope to have some sort of dialogue."

Wal-Mart's initial proposal for a 142,000-square foot store near Hercules' San Pablo Bay waterfront were rejected by the City Council. So the company submitted a scaled-down plan that included a pedestrian plaza, two outdoor eating areas and other small shops, including a pharmacy.

Hercules said no again, and opponents began raising the possibility of eminent domain, a legal tactic where government agencies can take land from its owners for the public good. Cities sometimes use eminent domain to build roads or redevelop properties, but the owners must be paid fair market value for their land.

The U.S. Supreme Court ruled last year that such seizures are allowable if the construction raises the tax base and benefits the entire community. Some residents and city officials say the land, which is currently open space, would be better suited for upscale stores that attract affluent shoppers and give the suburb a classy touch.

Hundreds are expected to attend Tuesday's meeting. City Councilor Charleen Raines said he can't remember any issue receiving so much attention in the community.

"There's no question there has been a huge amount of public interest in this," she said.

Loscotoff said Wal-Mart remains committed to opening a store in Hercules.

Hercules is the latest California city to clash with the Arkansas-based retail giant, which has ambitious plans to expand its presence in California by 2008.

In 2004, voters in the Southern California city of Inglewood overwhelmingly rejected the company's plans for a Wal-Mart in their community. And Turlock, in rural Stanislaus County, enacted a broad ban aimed at keeping out Wal-Mart and other big-box retailers out, a law that was recently upheld by a federal appeals court.

Other cities across the country have kept Wal-Mart out by imposing size caps for businesses and laws that set high minimum pay rates.

But Wal-Mart has been at least as successful at imposing its will on communities that are less than thrilled to host one of its stores, said Nu Wexler, a spokesman for the activist group Wal-Mart Watch.

In one instance, the company even raised the specter of eminent domain to get a store built in Florida, he said.

"Wal-Mart does not hesitate to employ scorched earth tactics to break into communities that don't welcome them," he said.

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