Homer, Alaska, Restricts Large Retail Stores

After two years of consideration—including a review by a city council-appointed task force, numerous public hearings, and a voter referendum—the town of Homer, Alaska, has adopted an ordinance that limits stores to no more than 45,000 square feet and requires retail development projects larger than 15,000 square feet to undergo a community impact review.

Homer has a population of about 5,000 and is located on the Kenai Peninsula.

Under the size restrictions, no building housing primarily retail uses may have a footprint in excess of 66,000 square feet. This allows for larger buildings provided they are multi-story. Furthermore, individual stores within these buildings are capped at between 25,000 and 45,000 square feet, depending on the area of town in which they are located.

Retail development projects larger than 15,000 square feet must undergo a community impact review and obtain a conditional use permit.

"Large retail and wholesale development can result in substantial impacts to the community, such as, but not limited to, noise, traffic, community character, environment, and the local economy," the ordinance notes. "The purpose of this section is to address these impacts and provide for detailed review of such uses."

In addition to traffic, site design, and architectural requirements, the impact review considers the proposed store's impact on employment and wages; the cost of municipal services; and the health of the downtown. It also weighs any change in the volume of "locally retained profits" resulting from the development and its impact on existing businesses.

The cost of all independent studies and investigations required to complete the review are to be paid by the developer.

The new rules were originally prompted by the supermarket chain Kroger's interest in building a 94,000-square-foot Fred Meyer superstore in Homer. Concerned that a store of that size could drive all competing grocery stores out of business, harming the local economy and leading to higher consumer prices, the city council enacted a temporary moratorium on large-scale retail stores in 2003.

Kroger has now proposed a 45,000-square-foot Fred Meyer store, which would be the smallest in the chain. The proposal will be the first project subject to Homer's new community impact review process.

Although the size has been reduced, many believe that the proposed store is still too large for a town the size of Homer and, if approved, will absorb a dominant share of local spending. "It is going to take a sizable part of my business," said Scott Ulmer, owner of Ulmer's Drug & Hardware. "I am fighting to retain and preserve the uniqueness of the economy of this community."

• Homer's ordinance
• How big is too big?

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