After years of controversial debate, Wal-Mart backs out of building Atascadero store

Wal-Mart announced Friday that it has canceled plans to build a store in Atascadero, a surprise move that unravels a decade of planning and debate and kills a major source of expected tax revenue for the city.

The retailer cited a changing market and the increased demand for online shopping as the reasons behind its decision, according to a city news release.

The move disappointed city leaders, who’ve worked to nudge the project along in fits and starts through protests and litigation over the better part of 10 years.

Even so, they were circumspect about the company’s decision and the new tack Atascadero will now have to take with a property the city hopes will one day become a major retail hub.

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“We were continually reassured that they’re moving forward, and I think they honestly were,” Mayor Tom O’Malley said.

“This would’ve been devastating news if it would’ve hit in the middle of the recession,” he said. “There wouldn’t be a lot of options. The fact is, where we are right now is a very positive time. We have multiple fronts doing well.”

The controversial, long-awaited project proposed about 123,000 square feet of building space and a 6,500-square-foot garden center at the southeast corner of the intersection of El Camino Real and Del Rio Road. Wal-Mart was expected to generate about $580,000 per year in sales tax revenue, according to figures previously released by the city.

As recently as August, the project cleared an important hurdle — the creation of a commercial facilities district needed to levy a special tax on the store so the city would not be on the hook for its related costs. Construction on the store was expected to begin in July.

Wal-Mart spokeswoman Delia Garcia said Friday that “a lot of factors” went into the decision, including the company’s shift toward online retail with the purchase of Jet — a growing online shopping website — in August.

“The reality is that we’re continuing to innovate our business as well as improve our existing stores in the region,” Garcia said. “While brick-and-mortar stores remain an important way in which we serve our customers, we’ve also committed to building our capacity for e-commerce.”

The project drew substantial criticism from residents and the citizens group Save Atascadero, and it was debated for years, ultimately surviving challenges in local and appellate courts.

Tom Comar, co-founder of Save Atascadero, was elated upon hearing the news Friday, saying that it’s been about 11 years since he and about 500 other residents first met to learn about the ill-fated project.

“I’m very appreciative of all the Atascadero residents that saw that the Atascadero Wal-Mart was just not suitable for our small town,” Comar said. “We’ve made Atascadero great again.”

Comar said the termination of the project, at least in the short-term, saves the city millions of dollars in traffic mitigation costs, including the construction of a roundabout.

“It’s a big boon to the city not to have to fund that,” Comar said.

Councilwoman Roberta Fonzi, a longtime supporter of the project, said Friday that she was “sad” and “disappointed” but that she did not blame the retail giant. She said the cost of doing business and the pace of development in California is cumbersome, so much so that it delayed the project until the Atascadero superstore was no longer viable.

“You can blame this on Jerry Brown as easy as you could Amazon,” Fonzi said.

Asked whether she thinks the city dodged a bullet in housing a future underperforming superstore, Fonzi said she believes the store would have succeeded in Atascadero.

Garcia, the spokeswoman, did not offer specifics, but said the company plans to sell the property after it works with the city to “identify other suitable uses.”

“It’s going to involve a lot of planning about where we go from here with this property,” Fonzi said.

With the news still fresh Friday, Mayor O’Malley chose to take an optimistic outlook, saying all the planning the store required created a property that’s already primed for another development. The site may not be home to another large business, but instead a few medium or small businesses, he said.

“This property is already assembled, the plans are approved, the zoning is right,” O’Malley said. “It’s a lot of potential, and there’s a lot of folks looking.”

He said all of the public input given during the project also helped the city define itself: “It’s kind of come to some conclusions of what we want to be as a community.”

Matt Fountain: 805-781-7909, @MattFountain1

Lindsey Holden: 805-781-7939, @lindseyholden27

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