City Council refers Hernandez proposal requiring economic-impact studies for large retail to planning commission

The Los Angeles City Council on Friday referred to the Planning Commission a proposed ordinance by Councilmember Mike Hernandez that would require an economic impact analysis when large retail projects come before the city’s conditional-use permit process.

Hernandez told the council the measure is intended to pair with a separate planning committee ordinance setting design standards for “big-box” stores and to supply the economic analysis the Planning Department does not currently perform. “When there's a conditional-use process that basically affects big boxes of a 50,000 square feet or more, the community development department [should] pursue an economic analysis of the impact of that big box,” Hernandez said.

Supporters said the studies would provide officials with information about the effects of large retailers on neighborhood businesses, jobs and tax revenues. Margo Feinberg of the United Food and Commercial Workers and the UFCW-backed coalition said the city has not conducted its own studies on how these stores affect local economies and urged passage so the city could plan “as a planning issue.” Madeline Janice Aparicio of the L.A. Alliance for a New Economy said the measure would not block projects but would give the council “more information … to make an informed decision.” Professor Jamshed Danuri (transcript name) cited a Ventura County study that linked big-box entries to reductions in well‑paying jobs and broader regional effects.

Retail industry representatives pushed back, arguing the ordinance risks legal problems and could be used to impede competition. Philip Recht, representing Walmart stores, told the council the city already has land‑use tools before the Planning Commission and expressed concern about putting additional burdens on sales of groceries and other goods.

Councilmembers who spoke in discussion said the measure represents a different approach from an outright prohibition and emphasized the need to craft a legally defensible rule. Councilmember Joel Burnson said the analysis could help prevent neighborhood decline by revealing when a large retailer would cause nearby businesses to fail. Councilmember Cindy Mzakowski and others asked who would pay for the analyses and suggested the Planning Commission and city attorney review the measure for legal exposure.

The council voted to refer the ordinance to the Planning Commission for review and requested that the commission combine Hernandez’s proposal with the related item that the Planning Land Use Management (PLUM) committee would forward. The referral passed unanimously, 12–0.

What happens next: the Planning Commission will review the proposal and the city attorney will assess legal issues before the item returns to PLUM and then the full council.