After Fifteen Years, Walmart Walking Away From Redlands Supercenter Project

The Walmart Corporation has pulled the plug on its nearly 15 year-long effort to establish a supercenter in Redlands.
Legal challenges over the years had delayed the undertaking, and now other considerations and a changing commercial environment convinced the retail giant, the largest and currently most successful company in the world which at the moment occupies the pinnacle number one spot on the Fortune 500 list of world corporations, to abandon the plan to establish a 256,000 square foot retail center anchored by a 210,00 square foot megastore at the southeast corner of San Bernardino Avenue and Tennessee Street.
The proposal to locate a Walmart on a 33-acre patch of ground at the location was first publicly floated in 2005. The Redlands Good Neighbor Coalition in short order inserted itself into the approval process. One issue that group seized upon was an argument that the project was in conflict with the city’s growth limitation regulations, in particular, Measure U, which was passed by the city’s voters in 1997. Measure U put a premium on preserving the “unique character of the City of Redlands as a quiet university town surrounded by agricultural and citrus producing lands,” and maintaining “principles of managed development within the City of Redlands to accommodate growth over time in a manner that will not lead to a deterioration of the quality of life enjoyed by the citizens of Redlands.”
The coalition filed two lawsuits, which ultimately failed to halt the development plans at the time they were adjudicated in 2013 and 2014. Further delays, ensued, however, as appeals on those lawsuits were pursued. In the meantime, in October 2012, the Redlands City Council gave the project official go-ahead in a 4-to-1, over heavy public opposition. For a variety of reasons, work on the project never actually began. Still, Walmart kept the project concept alive, by seeking on a regular annual basis a multitude of one-year extensions for its conditional use permits and parcel map, such that it did not need to submit a new application for approval of the project to the city. The last extension on the project was signed off on in April 2019.
Support for the project had remained solid at City Hall, which looked forward to the considerable sales tax revenue the store would bring to the city. City officials believed that the city would achieve a synergy with the completion of the project, which would in effect create a series of power centers in close proximity to one another, which included the Mountain Grove at Citrus Plaza and other close by retail attractions, that counted T.J. Max, Ulta, Aldi’s, Kay Jewelers, Nordstom Rack, Banana Republic, Hobby Loddy, Old Navy, Ross, Nike, as well as other customer attractions like 24 Hour Fitness and Harkins Theater. Redlands officials had hoped the concentration of retail options in such a relatively close environment would lure shoppers away from the Montclair Plaza, The Shoppes in Chino Hills, The Tyler Mall in Riverside and The Mills in Ontario.
Nevertheless, during the last half dozen years the entire retail industry has experienced a sea change, as traditional brick and mortar sales outlets have been in some measure supplanted by internet sales. While Walmart, with 11,277 stores and affiliated Sam’s Clubs in 27 countries, remains at the top of the Fortune 500 list, Amazon, which began as an on-line retailer of books and audio and video media, has branched into the sale of virtually every type of consumer product, and has climbed to the position of sixth on the Fortune 500 list, doing so without having made an major investment in physical locations where customers shop. This has prompted Walmart to begin experimenting with its own on-line retail sales approach in places such as Indiana, and made it rethink its aggressive effort to develop more and more stores. In some cases, Walmart employs home delivery vehicles to drop its merchandise off at the homes of customers. In other cases, the customers go to store locations or warehouses to pick up their purchases from a loading dock. In many locations, Walmart stores have seen both subtle and dramatic drop-offs in sales. Last year Walmart initiated or completed the closure of 27 stores throughout the United States and Canada.
Word emanating from Walmart’s corporate headquarters in Bentonville, Arkansas was that Walmart’s strategy to remain at the tip of the retail came was evolving toward the proper mix of traditional stores and e-commerce, and that at present the company needs to reduce the number of physical stores to achieve that balance. Thus, as of last month, Walmart was pursuing the construction of only two further stores in all of California. Following what corporate officers characterized as a “standard, periodic review process protocol” a determination was made that the expense of following through with the development of the Redlands store was contrary to the corporation’s overall strategy and plans at this time. An illustration of Walmart’s move away from store construction exists in the consideration that a little more than five years ago, in 2014, Walmart held 198 grand openings at newly completed locations in the United States, with that number zooming to 313 more in 2015. By 2019, that number had declined to just eight new stores.
Reportedly, the calculation that went into the decision included both the general migration of the retail industry away from expensive physical stores but the general approval and regulatory trend in Redlands as elsewhere in California entailing long term delays between the time of proposal and actual completion of a project. Despite California’s burgeoning population, which makes it an attractive place for operating huge department stores such as Walmart, which typically features 200,000 different products or items for sale, the governmental regulations for building and opening a large retail facility is prohibitive, experts in the development and retail industry say. Walmart’s plans for a supercenter in Fontana and in Rancho Cucamonga are now on hold.
Still, the same, Walmart is not abandoning the lion’s share of its existing stores. On the contrary, it spent $145 million in California alone, remodeling and refurbishing stores in the Golden State.
Walmart now plans to sell the 33-acre property.
Though city officials had apparently known of Walmart’s decision for a fortnight, it was only earlier this week that the public at large was informed.
On the rebound from Walmart’s decision, city officials had already begun talking about departing from the intent to have the property developed for commercial purposes to openly considering rezoning the property for high density residential purposes.
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