April 6, 2012 | Walmart’s zeal to spread a new downscale supermarket format to Hayward was temporarily halted. The city’s planning commission voted, 4-3, to uphold an appeal headed by union labor to disallow a 34,000 sq. ft. Walmart Market from coming to the vacant Circuit City building on Whipple Road near Industrial Parkway.

Daniel Temkin, a member of the family trust that owns the property, was visibly upset afterwards. Temkin said the group will evaluate its next move, but did not rule out filing a lawsuit against the city. “We’ll consider all our options,” he said. “We’re very disappointed.” Temkin said the city’s reaction is “clearly targeted at one business” and sends a bad message to other companies interested in doing business in Hayward. “There were two hold ups in that area,” he said. “Apparently the city thinks that’s better than a Walmart.”

Temkin’s fight with the city to find a suitable tenant for the empty building vacated by Circuit City in 2009 has been nearly a year in the making. City staff, in April 2011, attempted to place a moratorium on approving groceries stores in the same area. Temkin, at the time, told the council he believed his property was being singled out by the proposal, but the city quickly reversed course.

The proposed grocery store, called Walmart Market, is a downsized supermarket version of the retail behemoth’s larger box stores. In comparison, the 34,000 sq. ft. the store would be nearly a quarter the size of the Target store directly across the street. The format, popular in other parts of the country, does not yet exist on the West coast, but stores in Bellevue, Wash. and Beaverton, Ore. are due to open this spring.

Nearby Pleasanton, Dublin and San Jose are also discussing similar plans for Walmart Markets in their own cities. Last week, Pleasanton’s planning commission unanimously approved a plan that replaces a vacant building formerly occupied by a grocery chain with a Walmart Market. “What we are replacing is one national retailer with another,” said Temkin. “If this were any other food store, we would not be here tonight.” The situation in Hayward Thursday night, though, is less simple in zoning terms than replacing a grocery store with another.

Despite cries against Walmart and its poor labor and business practices often cited by liberal opponents and a majority of the 46 speakers Thursday night, the issue before the planning commission centered on whether the proposed grocery store is properly designated for the particular industrial area. Originally zoned for an electronic store, opponents of the proposal said the eight-year-old study is obsolete.

The appellant, John Nunes of the United Food and Commercial Workers, said “It is doubtful any staff member could ever envisioned the Circuit City as a supermarket.” Nunes said environmental impacts to the area by a larger greenhouse gas-emitted business calls for further studies before approval. Nunes also charged city staff with “subjective interpretation” of the zoning code and saying they would “bop and weave through the zoning code to approve the application.”

Others also challenged the relevance of a traffic study prepared for a use greatly different than a higher volume grocery store. The intersection of Whipple and Industrial in notoriously congested and oftentimes chaotic during rush hour with a one side of the intersection funneling traffic exiting Interstate 880.

The planning commission led by Al Mendall, Elisa Marquez, Rodney Loche and Sara Lamin said the grocery store did not comply with a existing rules designating “regional or sub-regional” businesses for the area. After a quizzing by Mendall, Hayward Development Director David Rizk admitted there was no specific definition for the term in the code. “It’s called a neighborhood market for a reason,” said Planning Commissioner Rodney Loche. “It’s for the neighbors. It’s not regional.

Chair Elisa Marquez agreed, saying the purpose of the 2004 plan for the property has “changed dramatically” and added, “I cannot even comprehend approving the plan.”

Planning Commissioner Sara Lamnin reiterated the nature of a grocery store is a “local thing,” but also found it inappropriate for the city to leave a property owner in limbo over the issue for nearly a year. Other commissioners agreed. Throughout the three-hour meeting, numerous speakers had also lauded Temkin for immaculately maintaining the building and its parking lot. Afterward Temkin said his keen attention to the property’s aesthetics will no longer continue due to costs.

Commissioners Dianne McDermott, Mariellen Faria and Mary Lavelle voted to approve the application, but also went out of their way to tell labor unions their decision was not based on their cause, but solely on zoning and planning issues. “We are not making decisions on union shops,” said Lavelle, who laid out a number of other union-based grocery stores in the area. “For those who don’t want to shop for groceries at Walmart, don’t go there,” she said.

The hot-button issues of property rights on display Thursday night brought out a number of conservative candidates running for office this June. Chris Pareja, who is running for Congress in the 15th District called for the “fairness of property owners.” Hayward City Council candidate Ralph Farias said the city cannot afford to push away business and new jobs when storefront are also empty downtown. Assembly candidate Luis Reynoso was also in attendance.

The issue of Walmart in Hayward is likely far from dead. Temkin and his associates have 10 days to appeal the commission’s determination. The issue could also be brought forward to the City Council where the parameters of the discussion could be far-ranging and contain more than just land-use questions, but whether the the retail giant’s presence is beneficial for the city as a whole. Three members of the current council are also up for re-election this June.