HAYWARD -- Plans to bring supermarkets to Southland mall and the former Circuit City site on Whipple Road can move forward unimpeded by a proposed grocery store moratorium, which the city shot down this week.

The idea was to hold off on new grocery stores of 20,000 square feet or more while the city studies the impacts such retailers would have on an area. The matter initially arose because of concerns related to the Whipple location.

However, at a City Council meeting last month, audience members said that in addition to jeopardizing a grocery at that site, it could adversely impact negotiations at the former Lucky site at Southland mall and at other locations.

On Tuesday, City Manager Fran David said they looked into limiting the moratorium, but "there was no equitable way to apply it, without applying it citywide."

She added that because the administrative process for the Whipple site will take another two or three weeks, her staff likely will be able to look at most concerns without having to put it on hold via the moratorium.

The City Council voted unanimously to reject the moratorium, but still directed staff members to go ahead with the grocery impact analysis. That includes the effect that extra shoppers would have on surrounding roads, as well as economic concerns such as using a space for a food retailer, which doesn't generate as much tax revenue as other uses. Other issues include the type of grocery -- bulk or discount versus traditional supermarkets -- and the proliferation of markets in some areas while others remain underserved.

"We are concerned with bringing in stores, but we're also concerned we don't get concentrations that put existing markets out of business and leave other areas grocery deserts," said Councilman Bill Quirk.

Representatives from Southland and the Circuit City site wouldn't divulge the interested entities, but both were described as full-service grocery stores.

The Southgate neighborhood has been without such a store since Lucky closed its doors in summer 2008.

The Circuit City building has been vacant since the company went bankrupt that same year, and the shopping center is now 87 percent empty, according to the site manager. Owners of neighboring fast food restaurants said the site has been bleak, and employees feel unsafe because of the lack of life.

John Sechser, a director of retail properties for real estate broker Grubb and Ellis, said he was very concerned when he heard about the possibility of a moratorium.

He said cities such as Pleasanton, Livermore, Dublin and Pleasant Hill have sought to attract grocery retailers, which he called "the single most important basic retailer category known to man."