AG City officials tussle in escalating fight over grocery store

May 9, 2016



While the former space of Arroyo Grande’s only full-service grocery store remains empty, city officials are tussling over what should be done.

In late October, as part of a bankruptcy, Haggen Food and Pharmacy shuttered its Arroyo Grande location. The anchor store site remains empty with no concrete plans to put in another grocery store.

The closure has led to residents leaving the city to shop, lower tax revenue for the city, and problems with reduced income for neighboring businesses.

In the past, grocery stores at the site brought in about $2.4 million per month in revenue making it one of the city’s top five tax revenue generators. While food items on the shelves are not taxable, food from the hot delis, pharmaceuticals and nonfood items are taxable.

In addition, stores near the empty anchor site have seen significant reductions in revenue. In contrast, merchants  adjacent to  Trader Joe’s have voiced concerns over the lack of parking because of the closure of the city’s major grocery store.

In November, Spencer’s Fresh Markets was the top bidder in a bankruptcy auction for the Arroyo Grande Haggen’s location, according to court documents. However, some locations including the Arroyo Grande site were pulled from the auction because of lease issues between two Haggen entities, OPCO and PROPCO.

After months of no updates and no action by the city, on Feb. 23, Mayor Jim Hill sent a letter to the Federal Trade Commission (FTC) expressing his concerns.

”I would greatly appreciate your attention to the issue with the former Albertson’s Haggen location in Arroyo Grande and the possibility to restore competition and vital access for our residents to a full service traditional grocery store at the earliest,” Hill wrote in his letter.

The FTC responded back in a letter it sent to Hill through city hall. City staff then sent the response to the mayor and councilpersons at the same time.

In a May 5 email to Hill, Council Member Barbara Harmon chastised the mayor for sending a letter “conveyed an official city position” without informing her of the letter. (Nowhere in the letter does it say it is sent by the city and the letter did not include a city letterhead). Harmon also voiced her concerns that members of the public were aware of the letter, while she was not, and that it appeared the mayor was supporting one business over another.

“After giving this matter much consideration, I am sending this email to express my disbelief and disappointment about your actions and your lack of transparency involving your letter to the Federal trade Commission,” Harmon’s email says.

Hill said that he was not promoting one business over another. While there has been no concrete report of any other grocery store operator interested in the site, Spencer’s Fresh Markets was the bidder of record. Hill’s goal is to have a competitive grocery store fill the location as soon as possible.

Hill also questioned Harmon’s letter.

“Now, Council Member Harmon is questioning my contact with the Trade Commission claiming ‘lack of transparency,’ apparently because I didn’t check with her in advance,” Hill wrote in his response to Harmon.

When asked about her email, Harmon said she gets calls from concerned residents at least once a week, and wants to be informed of any actions taken by Hill. While noting her lack of understanding of bankruptcy court processes, Harmon said she was worried that any city involvement could slow down the process even further.

During the past week, Harmon had heated discussions with several members of the public including John Spencer, over Harmon’s letter chastising Hill while she has not stepped forward to address the issue.

“Through this long process, I have not heard from any city officials expressing their concern about the process,” John Spencer said. “It seems at this point, Harmon’s concerns appear to be strictly political.”

Nevertheless, the FTC said that after the store was pulled from the Haggan bankruptcy, if Spencer’s Fresh Markets wanted to move forward, they could negotiate with the landlord directly. However, Haggen continues to pay the lease insuring that all negotiation be conducted through Haggan’s PROPCO which was not involved in the Haggan OPCO bankruptcy.

Jim Hill’s letter to the FTC, the FTC’s response, Barbara Harmon’s letter to Hill and Hill’s response to Harmon  by CalCoastNews


Excuse me.

Was the letter written to Jim Hill and addressed to City Hall in Arroyo Grande?

We have a VERY BIG PROBLEM if City Hall is opening mail addressed to City Council members before the members even see the mail.

I’m sure NO ONE ever opened Big Tony’s mail!!


Sorry, “Free,” but with limited exceptions a letter addressed to the mayor at city hall is a public record and everyone has a right to see it.


Anyone considering doing business in Arroyo Grande should read, re-read, and read this story again.


Barbara, you ran your campaign stating you were for the local business owners, well your letter does not sound like you support local businesses. In fact to name the store at all shows you you are full of crap, but that has been evident for awhile now.

Barbara Harmon was the person who tried to throw one of Jim Hill’s appointees under the bus too. And then if memory serves me,Jim has had other appointees step down because of harassment from city staff and Barbara Harmon, Kristen Barniech and Jim Guthrie.

Oh I forgot those 3 are all Tony Ferrero fans.

Staff has been lopsided for awhile when it comes to treating businesses equally, and now Barbara Harmon seems to have boarded that boat also.

Doug DeBerti tried to open a surf shop where JJ’s market use to be and the city just throw obstacle after obstacle in his way. Remember the great sign he wrote across the window “thanking the city and stating the building was up for sale?”

Oh and Teresa McClish did everything in her power to keep Hydro heaven from coming into town, and one year later they have still not been able to get a proper sign up. But Figuero Mtn has one that is against code.

So don’t pull this $hit about Jim Hill, go after staff and the city manager, that is where the problem lies. Jim is trying to get a store back in town, and he mentioned Spencer’s because they are the high bidder. I don’t see Barbara Harmon, Teresa McClish or Dianne Thompson doing a damn thing about a store.

Let’s not forget that there was a grocery store APPROVED for the village, but no Nick Thompkins decided to build a 56 room boutique hotel there. And staff was really pushing about the increase of traffic, the hell with the fact it is what residents wanted AND needed.

We have lost 3 grocery stores, JJ’s, Cookie Crock and Albertson’s. We lost the girl’s, round table pizza as well as other businesses. This city needs to work together and get something going to get us some businesses in town.

Barbara Harmon



Councilwoman Harmon is a rookie who should keep her opinions to herself.

First it was the MACK debacle where she places on the agenda, with much opposition, and tries to remove a planning commissioner all the while dragging his personal life through the televised mud hole.

THEN, she dares to motion and vote to keep him and even though both Councilman Guthrie and Councilwoman Barneich had previously agreed to the removal, THEY all 3 VOTE TO KEEP HIM after more than an hour of irrelevant testimony.

Learn your job Ms. Harmon

Karen Velie

John Spencer will be on KVEC 920 AM to talk about this issue with Dave Congalton at 5:05 p.m.


Thank goodness we still have KVEC and CCN to inform us what is going on.

The Tribune’s 3 day old news just doesn’t cut it!


The story left out who “Harmon” is/was. There shouldn’t be a space problem with internet stories. (I’m a new resident to the south county).


what are you talking about Slo native?. Did you read the story, it states council member Harmon.


Dave will have John Spencer on his radio show at 5:00pm.

Ben Daho

Move all City facilities into the building. Easy access, rent out the others. Lots of parking, no bumper dragging going up the drive. Large room for meetings. Etc.

Mr. Holly

Ms. Harmon is just another deadbeat politician looking for some camera time. She should be pro active instead of reactive. At least Mr, Hill actually tries to do something. In most cases there is always the politician who wants to take credit for everything good (Atascadero) that others do but disappears if there should be anything negative attached to the issue.

Oh, I forgot it’s election year.


Harmon is a lifelong public welfare recipient, still is to this day, and will be on public welfare til the day she dies. Anything she says and does, should and will be discounted.


At a recent council meeting it was brought up about the council getting health,eye and dental insurance, so I contacted someone about this.

Even though Barbara Harmon is retired from the probation dept, she gets her insurance from the city. So Joseywales is correct she is sucking on the teat of the gov’t.

Her retirement would have health insurance but she would have to contribute. This way she can put it on the back of the residents.

Barbara Harmon is a political tick, sucking blood about of the residents with no plans of stopping. She retired from the probation dept so she could start legally stealing from residents.

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