HAYWARD -- Citing traffic and economic concerns, the city is considering tightening the rules regarding where new supermarkets can set up shop, and may impose a moratorium on large grocery stores until further studies are done.
The matter came up after an application was submitted to allow a grocery store to move into the former Circuit City site on Whipple Road at the Union City border. It's in a small shopping center across from a larger center containing a Target store, along a major commuter thoroughfare.
City staff members are looking into whether traffic and economic impact studies should be required before such stores are allowed to move in.
It will take three to six months to analyze what such a change in use would bring, City Manager Fran David said. The moratorium would prevent grocery stores from moving in until the issue is resolved.
Councilman Bill Quirk brought up the matter at the Feb. 1 City Council meeting, citing concerns of a representative of the United Food and Commercial Workers Union.
"Regardless of what they wanted, we're concerned with traffic impacts in putting a large grocery where there wasn't one before," Quirk said.
A lawyer for the company that owns the former Circuit City site said they were taken by surprise by the proposed moratorium.
Moratoriums were "quite common when there were numerous new development applications for all sorts of projects -- so many that cities couldn't handle the volume and needed time to figure out what to do," said attorney Kristina Lawson when the matter was heard by the City Council last week. "That's not the case today as we all know."
Lawson said the site is blighted, and neighboring business owners agreed, telling the council that a business moving in would bring new life to an anchorless center.
The potential tenant has not been identified. Lawson said all she knows it that it is a "full-service grocery."
In an application submitted to the city in March, it was described as "a national retailer with a well-established regional marketing base. Among other things, the retailer will feature a wide variety of products for sale including fresh produce, meat and dairy, deli foods, bakery items, pet supplies, household supplies, health and beauty aids and pharmaceuticals."
Several residents spoke in favor of a moratorium on the grounds that it could be a discount store or something less than an ideal supermarket, and its proximity to the city's border would better serve Union City residents than those in Hayward.
City staff members raised concerns about generated revenue -- nontaxed food items aren't as beneficial to city coffers as taxable items.
But representatives from Southland mall and the owner of the former Mervyn's headquarters building on Foothill Boulevard spoke against the moratorium, saying it could kill interest in their sites.
The City Council postponed a vote on the moratorium and asked for more information regarding whether exceptions can be made for sites that previously were supermarkets, or a distinction made between full-service groceries and discount stores.
The matter will be heard at Tuesday's meeting, which begins at 7 p.m. in the City Council chamber at City Hall, 777 B St.
Contact Eric Kurhi at 510-293-2473.