Atascadero took the bait, hook, line and sinker

October 6, 2014
Mike Brennler

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 ( ‘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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  1. falconbh says:

    The larger question now becomes will the Voters support a New Sales Tax Increase in Atascadero ?
    This is turning out to be one of the Most Costly Elections for Taxpayers in the History of San Luis Obispo County.
    What is so troubling is when you read the research on how fragile the economy is coupled with wage stagnation over the past 10 years for the middle class how can people even begin to afford these New Tax Increases and ” New Automatic Rate Increase” ?
    Clearly the consultants are running a stealth campaign because they realize that the facts do not support all these New Tax and Rate Increases. They are trying to strategically keep a low profile and focus on those voters they can manipulate by phone and mail.
    They are counting on Apathy, Fear and Confusion to bank checks paid for by Taxpayers and Corporations.
    Please Vote in November. Inform others in Your Communities.
    The Simply Decide If You Can Afford These New Tax Increases and New Rate Increases

    ” The Power To Tax, Is The Power To Destroy “

    (7) 11 Total Votes - 9 up - 2 down
  2. sezlittle1 says:

    What in the heck are leaders in Atascadero thinking? It is a bedroom community. People live there because they want to live in a small community nestled in the hills. They move there because it doesn’t look like Orange County or like other big cities in America. Overzealous city leaders then wants to create some sort of legacy so they can drive by and say: “hey…I had something to do with that big ass shopping center..”
    What a bunch of fools. Now they-and supporters of Wal-mart will go down in history as the idiots who will fiscally destroy Atascadeo for our life times.
    Are you happy now giving into big business?

    (23) 27 Total Votes - 25 up - 2 down
  3. smiley says:

    I can’t express my outrage at the idea of Walmart costing the taxpayers that kind of money. Walmart paid its shareholders 12billion $ last year. The same Walmart that bribed government officials in Mexico. The same Walmart whose emplyoyees are suing for cheating them out of overtime wages. Way to go Atascadero bumkin city council and mayor!!

    (22) 28 Total Votes - 25 up - 3 down
    • surferdude says:

      Arroyo Grande City Council has called for a Special Meeting
      Wednesday, October 8th 9 am
      You got to be kidding!!!!

      (1) 5 Total Votes - 3 up - 2 down
    • kayaknut says:

      I was a bit confused, when you talked about paying outrageous benefits and bribing other governments I thought you were talking about the US government instead of Walmart

      (-6) 10 Total Votes - 2 up - 8 down
      • smiley says:

        There are similarities, the corporations run the government.

        (3) 3 Total Votes - 3 up - 0 down
  4. Jorge Estrada says:

    I do not live in Atascadero and remain neutral over the home town business threats by big box stores. What I am concerned about is more development, being funded by COG money, while existing growth issues are going unchecked. Take the stretch of Highway between Santa Margarita and San Luis Obispo for example, for the cars darting across the highway that is their only option because public COG money needs a dead body count before these issues are remedied.

    This is no different than requiring a poke in the eye before the company will provide safety glasses. Gov is just that inconsiderate, more concerned about their tax revenue streams and for you, a poke in the eye is only one occurance.

    (-1) 9 Total Votes - 4 up - 5 down
  5. JMO says:

    I am a businessman, although it is safe to say I am much smaller than Walmart. When I go into a project, I look at the cost versus the potential return. The better I do at my job, the better the “return”. Therefore, I have direct control on the “return”. As far as costs go, there are some things I have direct control over, and some things I don’t. I am taking a risk on the project mostly due to the costs I don’t have control over. Walmart must have looked at the cost of building this store against the potential return. One of the costs Walmart has NO control over is how much “outside improvements” (which are improvements not on Walmart’s property) cost. Therefore, when they go through the expensive planning process with the city, they get the city to define these costs and then Walmart either agrees to these costs or backs out of the project. No where in this do I see Walmart at fault. If I missed something, let me know.

    (2) 24 Total Votes - 13 up - 11 down
    • Mr. Holly says:

      You are right. McKinney took the $4.5 million to the table and WalMart accepted.

      (14) 16 Total Votes - 15 up - 1 down
    • toryrand says:

      the problem is most government leaders have no business experience, have never budgeted for business development themselves. they are in it for themselves and overlook the true responsibility and qualifications of being a leader, at the taxpayers expense.

      (13) 17 Total Votes - 15 up - 2 down
    • LameCommenter says:

      You got it right, but you missed the addition of a sidewalk/overpass improvements, the ever moving target of responding to costly Comar lawsuits, and the increased price of work thanks to Comar delays. I smell Caltrans also being involved in trying to squeeze “improvements” to an outdated overpass from the 60’s from a private company.

      The entire concept of “development fees” and “permit fees” and “traffic mitigation” is so far gone that we now expect the private sector to do work which should have been public sector done years ago to accommodate and anticipate (gasp) moderate and controlled growth. Some will thumbs up for the deal as is, and some will thumbs down due to the millions in costs they object to. A difficult call.

      (-8) 12 Total Votes - 2 up - 10 down
      • catdude says:

        Once again, LC, you’ve proven you are aptly named; walmart “moderate and controlled growth”…!!!! HaHaHaHaHa What planet are you from?

        (8) 8 Total Votes - 8 up - 0 down
        • LameCommenter says:

          Just parroting my usual free market tripe, Cat. I find it uncharacteristically hard to frame my thoughts during the shrill environment of the WM/A town debate, (sorry).

          And what PLANET am I from? Well, Earth of course, though the saucer landings at the ranch HAVE been influencing my thinking lately. I am even starting to feel some compassion for Atascadero losing it’s soul to a big box.

          (sorry to be so flippant, but the verve of the anti-WM folks just sometimes calls for something other than reasoned discourse here. The A town sentimental zeal trumps my reason, logic, or planning, thus my less-than-polished post.)

          (-2) 4 Total Votes - 1 up - 3 down
  6. Paso_citizen says:

    Atascadero voters –

    Just read Leann Atkins opinion on ‘The anatomy of a great leader’. – then ask yourselves
    the simple question – Where does Atascadero’s mayor and city council fit on these

    If the answer is “Not very well” – then you have the responsibility to tell them on Nov. 4
    that their ‘leadership’ is no longer desired by the citizens of Atascadero.

    It is very true that voting them out will not negate the huge financial obligation they so
    brilliantly stuck the Atascadero taxpayers with; but it will give them (and maybe other
    mayors and other city councils) knowledge that their actions fell totally short of what is
    expected from those elected to serve our needs. Voting them out is the only language
    they can understand.

    As far as how the ~$7.5 Million will be paid. Just take a little drive around your city and
    look at all the roads and streets that need repair – they will largely look the same; or
    worse for many more years; the sales tax that you are expected to ‘roll-over’ and pass
    will be used for Wal-Mart related expenses. Either that, or your brilliant city ‘leaders’ will
    ask for another tax increase.

    Ain’t it just great living in Atascadero? With so much competition from the brilliant
    city ‘leaders’ in Arroyo Grande and Paso Robles – it really becomes a toss-up as to which
    city can out-do the others.

    (14) 20 Total Votes - 17 up - 3 down
  7. indigo1955 says:

    Corporate greed. It has seeped into every small town. All it takes is a few distortions-and people will believe it is a “good thing”. It is not….and never will be. The tragedy of small family owned operations being pushed out of business is a tragedy. People have the right to stop this-but they choose not to.

    (6) 24 Total Votes - 15 up - 9 down
    • kayaknut says:

      Don’t forget Government greed, it seeps even more

      (12) 28 Total Votes - 20 up - 8 down
  8. Perspicacious says:

    Sounds like Mr. Brennler is suffering from a few sour grapes. I don’t live in A-Town but if I remember correctly, he never got along there and left under less than cordial circumstances. Now that he sees blood in the water, he is jumping in. In fact, I had forgotten about him until recently he popped up with opinion pieces on Atascadero happenings.

    (-19) 37 Total Votes - 9 up - 28 down
    • Mr. Holly says:

      If you read this weekend’s endorsements by the Tribune you read their comment regarding O’Malley and really didn’t jump up and down about him. They commented on his surrounding team, the incumbents, that they did not endorse.
      If you are not on the O’Malley team he will try to go after you. Remember he challenged Brennler to a fight in the parking lot? Then at a strategic planning session he reduced Ellen Beruard to tears where she finally had to walk out of the meeting. The lone survivor is Kelly who definetly has no connections with O’Malley and his faltering team.

      (10) 14 Total Votes - 12 up - 2 down
      • Perspicacious says:

        The Tribune’s endorsement is the LAST place I give any credence to when deciding who to vote for. In actuality, if I was on the fence, I would probably vote for whoever the tribune did NOT endorse.

        (16) 20 Total Votes - 18 up - 2 down
    • pasoparent5 says:

      I’ve never met Mr. Brennler but I admire him for being about the only man in A-town to stand up publically and criticize former city manager Wade McKinney and current mayor Tom O’Malley (et al.)

      The good ol’ boy network is alive in well in Paso AND A-town and Mr. Brennler wasn’t afraid to challenge the entrenched leadership on many, many issues.

      I’m probably on the opposite end of the political spectrum from him and former councilwoman Ellen Beraud but I respect them both for speaking out when too many citizens just seem to bow and worship at the feet of Tom O’Malley.

      (18) 22 Total Votes - 20 up - 2 down
    • MikeB says:

      Perspicacious writes “he never got along there and left under less than cordial circumstances.”

      Let me defend against your hollow insight, as follows;

      Perhaps I didn’t get along with the good ol boys. In that regard you are right. I rubbed them wrong because I had the political will to stand against things that were not in the interest of my community and smacked of corruption.

      Examples you ask?

      I didn’t think a community our size should have a position of Assistant City Manager and it galled me that he got a sweet mortgage deal after being run out of Claremont, Ca.

      I stood up for employee Marty Tracey who was railroaded and thrown under the bus by Wade McKinney. McKinney and his cohorts tried to stop the release of my report which exhonerated Tracy but they failed.

      McKinney and his cohorts tried to prevent me from alerting my community to the fact that federal agents were in our community conducting an investigation. Transparency dictated that the public be advised and I complied.

      I stood against the deeds of Kelly Gearhart and we now see how that ended up

      I stood against Wade McKinney who accrued over $90,000 in vacation leave that was in violation of the city’s personnel rule. This matter was investigated by the grand jury.

      So yes Perspicacious I confess that I wasn’t very cordial in accepting business as usual.

      My guess is that you are all about self service and accepting business as usual. Am I right?

      (20) 26 Total Votes - 23 up - 3 down
      • Perspicacious says:

        Thank you for your explanation. I was just a little suspicious that you surfaced now. I appreciate your response. I have a question for you…it seems as if O’Malley is who all of you folks have an issue with. What about the current crop of councilmembers besides O’Malley and the councilmembers at the time you were there. Weren’t you there with Arambide, Johnson, et al? What do you think of Moreno and Sturtevant?

        (0) 4 Total Votes - 2 up - 2 down
        • MikeB says:

          Arambide was before my time. He seemed like a nice man but I know little of his politics or decision making.

          Johnson was also before my time. It bothered me that he had involved himself in the “Central Coast Taxpayers Association” which was run out of the office of the County Assessor and was formed to advocate for Wal-mart. I saw that as unethical and it is ironic that they claimed to advocate for the taxpayer yet now the taxpayer is getting the shaft.

          O’Malley is one of the dirtiest, self serving, politicians I have ever known and if it serves his interest he will outright lie, as I personally witnessed while I was on the council.

          Moreno and Sturtevant both seem to have no political will as evidenced when I repeatedly warned them about McKinney’s abuse of vacation leave. They sat on their hands and ultimately McKinney took all that money ($90,000+) to Indian Wells. It was like McKinney robbed the bank and the council held the door open as he walked to the getaway car.

          Don’t get me started on the Fonzi’s (Kelly Gearhart’s pals) as I could take hours on their dishonesty.

          The one council member I have come to appreciate is Bob Kelley. I dont agree with some of his decisions but his heart seems to be in the right place and I think he was the lone soldier in trying to clean up some of the dirt .

          (6) 6 Total Votes - 6 up - 0 down
          • pasoparent5 says:

            Your assessments are spot on, Mr. Brennler.

            The only A-town councilman I respect anymore is Mr. Kelley. He’s sincere and honorable.

            (3) 3 Total Votes - 3 up - 0 down
          • Perspicacious says:

            Thank you Mike. The information is interesting. No, I am NOT self-serving and for business as usual. It is just that I was involved heavily in a recent campaign and saw first hand the lies, deceit, and misinformation that can be slung about which I knew for a fact was not true! I am always suspicious in these situations. Thank you for shedding some light on where you are coming from.

            (1) 1 Total Votes - 1 up - 0 down
  9. Mr. Holly says:

    Go to the city council meeting of 6-14-2011 around minute 45 and you will hear the beginning of the city’s failure to conduct business as requested by the council. The ball rests on the shoulders of Wade McKinney. Who, by the way, left Atascadero with $140,000k+ in his pocket before he got caught on this one.
    Where was Atascadero’s leader. O’Malley, with his self proclaimed vast knowledge on economics? We all heard about it for 13 minutes during the garbage contract that did not go out to bid.

    (31) 31 Total Votes - 31 up - 0 down

Comments are closed.