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.
You might find the preceding statement a curious one, coming as it does from the very people who introduced Wal-Mart 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 Wal-Mart’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 Wal-Mart to locate a 200,000-plus-square-foot store on Del Rio in Atascadero. The Wal-Mart proposal generated great public debate, but in the end, residents voted overwhelmingly to support it.
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In 2006, Wal-Mart purchased the property for the store from the Rottman Group. At that point, Wal-Mart told us that Wal-Mart 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 Wal-Mart 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? Wal-Mart 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).
Wal-Mart 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 Wal-Mart project has dragged on for years and has cost the city hundreds of thousands of dollars as well as countless staff hours. Wal-Mart knows Atascadero wants and needs this store, and is now holding both the city and Rottman hostage.
Wal-Mart 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, Wal-Mart certainly has the financial ability to pay for the improvements. Wal-Mart’s CEO discusses the company’s 2011 performance on its website (walmartstores.com/sites/annualreport/2011/letter.aspx): “Wal-Mart 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.”
Wal-Mart 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. Wal-Mart 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 Wal-Mart to ensure that this project moves forward with appropriate traffic improvements. Nonetheless, we believe Wal-Mart should now do what it said it was going to do. I sincerely hope residents will speak up and tell Wal-Mart to fund the traffic mitigation measures.
Steven Rottman is the CEO of Santa Barbara-based Rottman Group, developers of projects throughout the Central Coast.