Saying a grocery doesn't meet use requirements in place at a former Circuit City store at the Union City border, a divided Hayward Planning Commission voted Thursday to reject a bid to bring a Walmart Neighborhood Market to the location.

The four-hour meeting drew scores of public speakers, who addressed issues ranging from the benefits of union stores over Walmart, the need to install an anchor tenant at the blighted strip mall and the desire for a full-service grocery in the area. The speakers were about equally divided between those who wanted the grocery and those who did not.

But what the commission was fundamentally asked to do was decide whether the supermarket use would qualify as a "regional or sub-regional use," as is required in retail permits in place at the site.

David Rizk, Hayward's director of developmental services, approved the project in January. His decision was appealed to the planners jointly by a resident of unincorporated Hayward and the United Food and Commercial Workers Union Local 5.

The city doesn't have a definition of what constitutes regional or sub-regional use, and various arguments were made for both sides. Those included the site's proximity to Interstate 880, the area that customers would be drawn from, as well as services at the site, such as its use as a pickup spot for goods purchased online from Walmart.

Commissioner Al Mendall, who made the motion to uphold the appeal, said a grocery store does not qualify as anything more than neighborhood use.

He said commissioners often hear from residents who would like to have a supermarket closer to their homes, and that in itself indicates that it's not a use that makes it a destination for a wide area.

"It's an inherently neighborhood activity, not regional retail," Mendall said. "If it were, then people who live in Southgate would be perfectly happy driving halfway across town to any one of a half-dozen, 20, 40 different grocery stores."

He added that the reason for the regional designation is because the city sought to draw in shoppers who were going to large retailers in surrounding communities.

Property owner Dan Temkin said that since Circuit City left in 2009, mall occupancy has dropped to 13 percent, and his family has "dipped into our own pockets" to maintain the site.

He cautioned that a decision to reject the grocery "sends a crippling message to all potential businesses about the economic climate and fairness of the city of Hayward."

The final vote was 4-3 to uphold the appeal. The commission's decision can be appealed to the City Council until April 16.

Commissioner Mary Lovelle, who along with Diane McDermott and Mariellen Faria, cast dissenting votes to deny the appeal, said it was a "hard but simple decision" that would have increased shopping opportunities for residents. She added that the Planning Commission is not an elected body, and her vote was easier than the "political decision" that could come at City Council level.

A bid to put a Walmart grocery at an empty market building in Pleasanton was approved by that city's planning commission last month, but has been appealed to the Pleasanton council. Similar stores are in the works in San Ramon and San Jose, with a total of 13 throughout Northern California.

According to Walmart's website, the markets are designed for people "who need groceries, pharmaceuticals, and general merchandise all at our famous Every Day Low Prices."

Contact Eric Kurhi at 510-293-2473. Follow him at Twitter.com/erickurhi. Read his blog at IBAbuzz.com/hayword.