Legislation Requires Economic Impact Studies for Big Box Stores

In a significant victory for proponents of the localism movement, on Monday, June 18, Maine's legislature approved a bill requiring cities and towns to study the economic impact of any proposed retail development exceeding 75,000 square feet and to approve only those projects that will not have a negative impact on the local economy. The bill, the Informed Growth Act, was spearheaded by a number of citizens' groups, the Maine Fair Trade Campaign, Our Town Damariscotta, the Maine chapter of the Sierra Club, and the Institute for Local Self-Reliance (ILS)'s New Rules Project. It is expected that Governor John Baldacci (D) will sign the bill.

Stacy Mitchell, senior researcher for ILS, told BTW that Maine is the first state to pass legislation requiring towns and cities to evaluate the economic impact of large-scale retail developments on the local community. Noting that the legislation sets a national precedent, she added, "It's a significant thing."

Mitchell explained that while federal and state courts have already ruled that it is legal for towns to evaluate the local impact of proposed retail competition, until recently, there had been a misconception among many planning boards across the country that this was something you just did not do -- you don't hinder so-called progress. However, more and more small business owners have decided "to speak up for themselves," and the result is a growing number of communities have instituted retail size caps and big-box ban. "That's the broader message of this bill," she said. "It says you can study the economic impact of [big-box stores]."

The Informed Growth Act requires cities to conduct an economic impact analysis for large-scale retail, which would be performed by an independent consultant chosen by the town and paid for by the developer, according to the Hometown Advantage. The study would evaluate the effects of the proposed store on existing businesses, jobs, wages, vacancy rates, the cost of municipal services, and the volume of sales revenue retained and reinvested in the community, the article reported. Once the analysis is finished, the town must hold a public hearing and provide residents within a certain radius of the store and officials from adjacent towns a special notice of the hearing. A town can only approve a store if it finds that it would not have an "adverse impact on the community and local economy."

Mitchell pointed out that in the debate prior to the vote, Sen. John Nutting (D-Androscoggin County), a proponent of the bill, cited the numerous economic impact studies that revealed that local businesses provide much more back to their communities than do big box stores. "The products [of large retailers] are from away and the profits go away," he explained, as reported by Hometown Advantage. --David Grogan