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


It has long been reported, in mainstream media, that Spencer’s market was the winning bidder to take that location. Mayor Hill didn’t *promote* Spencer’s out of the blue or as a quid pro quo or even against any other business, so people need to get their facts straight. Any person with half their attention on local activities knows this.

The city of Arroyo Grande is losing a bunch of money by having that location shuttered.

That the CITY is not doing any and all things to fill that location is a travesty.

That Mayor Hill is doing his level best to help the City of Arroyo Grande is commendable.

That council member Barbara Harmon is using this as a political weapon to beat up the Mayor reeks of a personal agenda.

Sadly, the real enemy in all of this is Investec Management Corporation. So long as rent gets paid, they could not care less that the building sits empty, collecting ZERO sales tax that benefits the city.

I sure wish Barbara Harmon had directed her scorn and derision where it belongs and not on our Mayor who continually puts our city first. She should be embarrassed by this clear schoolyard bully tactic of crossing her arms, stomping her foot and demanding final approval on our Mayor’s actions.

My Supervisor writes letters to the EPA and various other agencies, representing District 3, with absolutely no input or approval by the entire Board of Supervisors.

I thought her public verbal flogging and excoriation of volunteer Planning Commissioner John Mack was over the top last year, but Barbara Harmon has really shown her ass on this latest dust-up. She’s a cancer.


Maybe it’s time to start shopping at the local farmers markets and High Fructose Free Trader Joes. Who needs commercially processed foods, anyway?

Ya are what ya eat.


Trader Joes has a great nitch and good prices, but it isn’t a “full service” market. Sometimes you just want to get a special cut of meat or get some meat sliced to order.

AG needs a full service market east of 101.


Our county has 20 farmers’ markets and multiple locally-owned full-service (and small) grocery stores.

Given the never-ending recalls of food the big box/national/international chain stores have, on a seemingly weekly basis, I do not understand why folks shop there.

It’s like the reverse of gambling.

In gambling for money, you spend money and hope to be lucky enough to hit a jackpot.

In food shopping, you spend money and hope to be lucky enough to hit a jackpot where you don’t ingest a food-borne illness.

That plan is bananas.

As an AG resident, I would be so supportive of any locally-owned and operated grocer in that spot. Spencer’s, JJ’s, California Fresh (El Rancho), Grande Foods, the SLO Co-op (which is AMAZING in their balance of local/healthy/natural), and even the added component of a CSA drop-off, like BeeWench Farm. AG has lost a financial asset. That the city isn’t doing everything possible to replace that financial asset is a shame.


What about those on a fixed income who can’t afford to shop Cal fresh, and we are carnivores? Does the co op have a deli?

Sounds like you are a vegetarian and a health freak, I am not. Some of us just want Albertson’s back or a major grocery store.

I am sick of the long line and rude staff at Von’s. I don’t like prepackage veggies at Trader Joes. I don’t want to hope to get certain veggies from the CSA. Is it to damn much to ask for a full service grocery store in the 2nd largest towns in south county.

Dianne Thompson is a POS city manager, and she is leading this council down the road of no good, but they are to blind to see it.

Will someone step up and run for office so we might get this city back on track. Get these Libtards out of office.

Rich in MB

Trader Joe’s is great Yuppie high priced folks…what about a place to shop for the rest of us?


Harmon sounds like a DB…


While I have no dog in this fight (I do like shopping at Spencer’s and miss them in SLO), I see this:

“(Nowhere in the letter does it say it is sent by the city and the letter did not include a city letterhead)”

Then read the first line of Mayor Hill’s letter:

“I am writing as Mayor of the City of Arroyo Grande, California (Population 17,000)…”

Regardless of letterhead or what exactly “sent by the city” even means, it sure does look like the Mayor is writing on behalf of the city (re: “as Mayor of…”)

That said, I think Mayor Hill’s response was perfect!

“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…”

Because that was the feel I got from Council Member Harmon’s email. Also, she signed her email “Mayor Pro Tem” (pro tempore), why? I thought Hill was mayor?

The silliness of all the small people who wish they were big continues to amaze me.

Mitch C

Far be it to me to offer any support for hthat POS Hill, but read the letter. It was not written on city stationary, he did not suggest that his position was that supported by the city council, nor did he do anything other than give a personal plea as an individual.

The major factor is that he did something. He did not just admire the problem, he tried to get something moving that had stalled and solve something that was in the best interest of the citizens of Arroyo Grande.

The letter is a positive one and if you disagree you have the 1st Amendment right to equal time to present your position. No one should be taken to task for doing the best that they can particularly if that action has the best interest of the citizens involved.


Arroyo grande has a history of awards such as citizen of the year.

Why not an award for asshole of the month be bestowed on a local politician?

My vote for the prestigious initial awardee is barbara Harmon.


So who’s pocket is Barbara Harmon in? Perhaps her closet needs a little sunshine and a walk through.



Look around.

We need a grocery store.

I do not give a rats ass who does what to get us one!


All one has to do is watch Barbara Harmon talk and you can tell she is missing a few working brain cells. She has to read everything she says, even her comments on agenda items. How can someone have their vote figured out prior to even hearing a presentation? Oh that’s right someone has already told you what you think, that is how.

Anyone who has their comments pre written out, is not the sharpest tack in the drawer and for sure has already made up their mind. It is pretty obvious that there is a huge ego behind Barbara Harmon and she thinks her crap don’t stink.

I could not believe she did not know how to figure out 1% of a number. WOW! how stupid is that. And she just sits up and there and says she is not good at math, no kidding!

She is suppose to do more than hang out with politicians like Lynn Compton, and actually do something that benefits our town. When someone actually tries to do just that and have not spoken to her royal hinny first, she gets her feathers all in a ruffle.

Like Mr. Hill stated she needs to be part of the solution because right now you are part of the problem Ms. Harmon.

The person who ran for office sure as heck is not the person we ended up with. I will vote for Jim Hill in a New York second, she could not buy my vote.

Jim Hill for Mayor of Arroyo Grande, keep up the good work Mr. Hill.

Maybe that is why she did this, are you scared that Jim Hill is going to win another election Ms. Harmon? That would make more sense than anything else.


I don’t care much for Harmon either but not everyone has time to memorize a speech on every subject they are likely to comment upon as a public official. I don’t have a problem with anyone speaking from notes. There maybe a very few who can speak well extemporaneously but most people speak better when they are aided by notes which organize their thoughts and remind them of pertinent facts as they speak.