Atascadero took the bait, hook, line and sinker
October 6, 2014
OPINION BY MIKE BRENNLER
Recent headlines reveal that the infrastructure improvements needed to accommodate Walmart have swollen from $4.5 million to almost $12 million. This should not surprise anyone as warnings were repeatedly raised between 2008 through 2012.
Many citizens raised valid fiscal concerns, but equally as many were blinded by Walmart’s false promise to pay their “fair share.” Those who believed this “fair share” rhetoric, swallowed Walmart’s bait, “hook, line and sinker.”
Ultimately the Atascadero City Council failed in its fiduciary responsibility to assure that cost overruns were properly shared and apportioned. Cost overruns occur in almost every project and it is essential to prepare for such eventuality, but in this case the council was either inept or asleep at the switch.
In late 2011, Steven Rottman, the developer of the now defunct “Annex project” authored a viewpoint, wherein he wrote:
“The proposal to bring a Walmart store to Atascadero has been in the works for more than six years and now that it is time to move ahead in earnest, Wal-Mart is trying to backpedal on commitments it made with respect to the traffic mitigation for the project.”
Today, even the Tribune is willing to toss brickbats at the Atascadero City Council although it is a bit late and akin to the orchestra playing music on the deck of the White Star’s Titanic.
Excerpt from Tribune editorial Oct. 3:
“The city has a litany of reasons for the $7.5 million increase. But we have little patience at this point, given that the City Council rejected pleas from several quarters — including The Tribune Editorial Board — that it require WalMart to pay its fair share of all cost overruns. It failed to do so, and it now faces $6 million in road improvements that it can’t afford.”
On Dec. 13, 2011, I spoke to the city council and raised my own concerns. Please allow me to share the text of my public comment below:
“Months ago we learned that there was a problem percolating between the Rottman Group and Walmart over paying for the infrastructure improvements required to support these large developments.
“Even though Atascadero was promised that the taxpayers wouldn’t be on the hook for the millions that it would take to mitigate the traffic problems it appears that Walmart has chosen to seek the wiggle room to circumvent their promise, although they love to use the rhetoric that they want to pay their “fair share,” whatever that means.
“But at this point, the integrity of Walmart is suspect. Just recently Walmart denied responsibility for the robo-calls this community received wherein the call complained of the Rottman opinion piece and continued to seek support for Walmart. Our City Manager Wade McKinney echoed the claim that Walmart was not responsible for the robo-calls and yet if you check where the call originated from, it was Benton County Arkansas, the home of Walmarts corporate headquarters. Just a coincidence I guess!
“A few years ago when I was on the council I would seek the knowledge of other council members and officials throughout the state where Walmart developments had caused controversy. The advice was pretty much unanimous in stating that Atascadero should make every effort to assure that their development agreements were meticulously recorded, recorded in stone if you will, to assure that Walmart wouldn’t take advantage of the situation, because given the opportunity they would.
“In my opinion tonight’s agenda item to amend the EIR really boils down to the hopes and potential of reducing the traffic mitigation factors associated with the Walmart proposal and let me be frank in my assessment. If Walmart is hoping to skirt the traffic mitigation issues with the city councils blessing then Atascadero is going to end up with two zoos, the legitimate one at the Lake Park and another zoo in the form of a traffic nightmare on the north end of town.
“In concluding my advice to you is twofold;
1. If there is even a remote probability that these issues are going to devolve into a lawsuit between Walmart and the Rottman Group, don’t embroil the city further in hopes that Mr. McKinney or Mr. Frace can mediate, for that will further jeopardize the city.
If the Rottman group and Walmart want to slug it out step aside and let them slug it out
2. If the Walmart project does goes forward do not allow Walmart to weasel out of their promise to pay for the traffic mitigation. Last year Walmart made over 400 billion in revenues. Anyone who thinks they can’t pay for these improvements is living in fantasy land. Don’t make the people in this community carry their water.”
In Nov. 2011, Steven Rottman authored a Viewpoint:
“The proposal to bring a Walmart store to Atascadero has been in the works for more than six years and now that it is time to move ahead in earnest, WalMart is trying to backpedal on commitments it made with respect to the traffic mitigation for the project.
“You might find the preceding statement a curious one, coming as it does from the very people who introduced WalMart to Atascadero: namely me, Steven Rottman, and my partners at the Rottman Group. As longtime developers we are often caught in crossfire and peppered with accusations. That comes with the territory.
“But what doesn’t come with the territory are WalMart’s actions regarding the proposed development at the corner of Del Rio and El Camino Real. I am writing this Viewpoint to explain a long and torturous process that has left us in an untenable situation.
“Some background: In 2005, the Rottman Group began working with WalMart to locate a 200,000-plus-square-foot store on Del Rio in Atascadero. The WalMart proposal generated great public debate, but in the end, residents voted overwhelmingly to support it.
“In 2006, WalMart purchased the property for the store from the Rottman Group. At that point, WalMart told us that WalMart would take the lead on its own project, would pay for the environmental impact report (EIR) needed to support it, which they did, and stated publicly that WalMart would fund the traffic mitigation measures, once they were identified in the EIR. Concurrently, Rottman would proceed with our plan to develop a second property on Del Rio.
“It appeared all plans were moving forward.
“So what’s the problem? WalMart changed its plans 16 times over five years, responding to a changing economy and in essence revising its business plan. Wal-Mart ultimately decided to build a smaller store. We have no problem with that decision, but we do object to Wal-Mart now wanting to change the rules by limiting its contribution on the traffic mitigation measures, and compel the city, Rottman or other property owners to pay the difference (approximately $2 million).
“WalMart argues that there is nothing in writing that requires it to fund the traffic mitigation measures, but we relied on Wal-Mart’s assurances (and perhaps the city did too).
“The WalMart project has dragged on for years and has cost the city hundreds of thousands of dollars as well as countless staff hours. WalMart knows Atascadero wants and needs this store, and is now holding both the city and Rottman hostage.
“WalMart should stop trying to save itself $2 million and should fund the traffic improvements that have been identified in the EIR. While every market is unique, WalMart certainly has the financial ability to pay for the improvements. WalMart’s CEO discusses the company’s 2011 performance on its website (walmartstores.com/sites/annualreport/2011/letter.aspx): ‘WalMart delivered solid financial performance for fiscal year 2011. … We continued to deliver a stable return on investment of over 19 percent. We closed out the year with almost $11 billion in free cash flow.’
“WalMart should quit pressuring the city to assign increased fees to the adjacent properties and encumber future developments with liens that may impede progress in the City. WalMart should fund the improvements.
“Some readers may tell me we should have expected an unsavory outcome when we first began this process. All that aside, the facts are that Rottman has met its commitments and will continue to work with the city and WalMart to ensure that this project moves forward with appropriate traffic improvements. Nonetheless, we believe WalMart should now do what it said it was going to do. I sincerely hope residents will speak up and tell WalMart to fund the traffic mitigation measures.”
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