The Carson City Wal-Mart store is one of many targeted by the corporation for expansion to a Wal-Mart Supercenter, which would include a grocery, but its current South Carson Street site won't allow a grocery store there before 2036.
The limitation has Wal-Mart Corp. considering its alternatives, even inquiring about locating a Supercenter in Minden, raising concerns that Carson City could lose a major retailer and source of sales tax revenues.
"We would like to have a Supercenter in Carson City, and the current location would be our preferred site," Wal-Mart spokeswoman Amy Hill of Reno said. "We really can't speculate what our other options would be because we really don't want to go down that road if we don't have to.
"We're currently working with the city and the landlord to see if there would be some opportunities at that site. How firm the limitation on the land is still being investigated."
The problem stems from an agreement that dates from 1980 when Raley's was negotiating for a site to build a supermarket on part of a large block of land in south Carson City, then largely undeveloped.
"When that encumbrance was recorded, it was a concession made by the property owner to lure Raley's, something Raley's demanded - basically a no competition clause," Shelly Aldean of Glenbrook Properties said.
She said the restriction barring other groceries covers all property between Carson Street and Silver Sage Drive, from Koontz Lane on the north to Clearview Drive on the south. The covenant survives despite changes in ownership.
The actual term of the restriction was set in a January 1986 recording and runs 50 years, Aldean said. Such covenants can only be changed if all property owners covered in them agree.
Glenbrook bought a large block of that area in 1986 and later sold 12 acres to Wal-Mart and five to J.C. Penney. Wal-Mart opened July 2, 1991.
Hill said if Wal-Mart were to be allowed to build a supercenter there, it would be created by building a 60,000-to 80,000-square-foot addition to the store, mainly to add a full grocery department.
"It's not unusual for us to add on to a store like that. It takes six to nine months and usually we can keep the store open during it," she said.
Wal-Mart announced Oct. 2 it planned to expand 100-110 stores into Supercenters during its fiscal year starting Feb. 1, 2001, as well as opening 170-180 new Supercenters and about 40 new discount stores.
In August, Dangberg Holdings Nevada asked the Douglas County Planning Commission to consider a Master Plan amendment that would permit placing a Wal-Mart Supercenter at Highway 395 and Muller Lane, just north of Minden. Douglas County Manager Dan Holler said at the time, Wal-Mart had looked at six different properties along Highway 395. At the September planning meeting, though, Holler said Wal-Mart was no longer interested in that location.
Adding a grocery to create a Supercenter would not necessarily boost local sales tax revenues much, since groceries are exempt from sales taxes, Carson City Finance Director David Heath pointed out Tuesday.
"We certainly don't want to lose the existing revenue - Wal-Mart's the biggest retailer in the land," Heath said.
Just how much Wal-Mart is pumping into city coffers is considered proprietary information - a trade secret - and is not broken out in reports from the Nevada Department of Taxation. Even Hill said she could not obtain a figure.
"I have no idea about how much the Carson City store is generating, but I know its doing well and is a good generator of sales tax for the city," Hill said.
The company Web site reports that during the 2000 fiscal year, the 13 Wal-Marts in Nevada generated $50.8 million in sales taxes. The company also paid $3.9 million in other state and local taxes and fees including real estate, personal property, unemployment and use taxes.
Hill said Wal-Mart would not keep the current store open if a Supercenter were built elsewhere in Carson City or the Carson Valley.
"If we build at another site, it would be a relocation," Hill said.