Court orders Tesco to conduct environmental review of Calif. DC
U.K.-based Tesco, the world’s third-largest retailer, said Friday that a recent California Superior Court ruling requiring the retailer to conduct an environmental impact review of its only U.S. distribution center will not hamper the firm's five-year $2 billion push into the U.S. grocery market.
A Riverside County, Calif., Superior Court judge ruled last week that Tesco's construction of an 824,000-square-foot distribution center in Riverside should have been reviewed under the California Environmental Quality Act for possible environmental impacts.
In his 11-page report, Judge Thomas Cahraman also ruled that the firm should “take all actions necessary to bring the project into compliance with that (CEQA) Act.”
The ruling remained vague about actual impact on current operations at the center, which was completed earlier this year and is already being used by the retailer.
“While the judge has the authority to order various types of compliance measures, there’s nothing in the ruling that suggests any impact on current operations would be required by the court,” said Tesco in a statement released following the judge's ruling.
“Clearly we have to bring the project into compliance and the ruling seems to suggest a mitigation plan would be in order,' Tesco said. 'We are reviewing the ruling now to determine how best to accomplish compliance.”
CEQA review typically applies only to publicly built projects. However, court rulings have found that privately built projects are covered if a government permit or other entitlement for use was required during construction. While simple building permits do not normally trigger a CEQA review requirement, a general rule of thumb is that CEQA applies to any project that requires the approval of a governmental body.
According to court filings, Tesco received an exemption from a CEQA review for construction of the distribution center from the March Joint Powers Authority. The MJPA is a local agency federally designated to manage the reuse of the nearby former active duty March Air Force Base and the surrounding property. The Tesco distribution center is located on about 89 acres within the nearly 7,000 acres under the MJPA's authority.
The distribution center's exemption was challenged in court by a group of local residents concerned about the negative land use and environmental quality issues from the center. Last week's court ruling found that the MJPA did not have the authority to issue a state CEQA exemption.
While a normal CEQA process could have resulted in an initial finding that the distribution center project would not create negative impacts, and thus be exempt, the court ruling will now require Tesco to conduct a full environmental impact report. Because the center is already built, a CEQA finding could force the firm to retrofit environmental mitigation programs at the center, or in the most extreme case, close the center.
The distribution center, which includes a 500,000-square-foot solar panel system on the roof to generate electricity, is a key component of Tesco's move into the U.S. grocery market. Tesco is also looking at plans to expand the center, currently capable of serving up to 500 stores, to more than 1.9 million square feet. Tesco has announced plans to open 200 store locations in Southern California, Phoenix and Las Vegas, by the end of 2008 with a nationwide goal of 1,000 stores. Tesco has also said it is looking at Central California sites for a second, equally sized distribution center.
Earlier this year, Tesco pledged itself to environmentally friendly policies, saying it would spend $987 million on green projects, cut prices on energy-efficient products and reduce pollution within the firm. ' Keith Higginbotham