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HomeMy WebLinkAbout11-26-18 Public Comment - Goetz, Baldwin & Geddes, P.C. - WinCo Appeal lames H. Goetz GOETZ, BALDWIN & GEDDES, P. C. Telephone Robert K. Baldwin Attorneys at Law (406)587-0618 J. Devlan Geddes 35 North Grand (zip 59715) Facsimile Trent M. Gardner (406)587-5144 Benjamin J. Alke P. 0. Box 6580 balke@goetzlawfirjn,coin Kyle W.Nelson Bozeman, MT 59771-6580 Jeffrey J. Tierney Hallie E. Bishop November 26, 2018 Via Email Bozeman City Commissioners c/o Department of Community Development 20 East Olive Street Bozeman, MT 59715 Re-' Appeal of WinCo ,Site Plan, Application No. 17585 Dear Commissioners: I represent the applicant, Gallatin TR LP ("Gallatin"). Please accept this letter as Gallatin's written statement regarding the appeal of the WinCo Site Plan, Application No. 17585 ("WinCo Plan"), The Bozeman Department of Community Development ("Department") approved of the WinCo Plan. The Department's approval of the plan should be upheld, and the appeal denied, because: (1) The WinCo Plan complies with all applicable zoning requirements, the already approved planned unit development, and Bozeman's Growth Policy; and (2) The appeal is not proper because: a. Appellants did not make any comments during the period for public comment, let alone raise the issues they now raise on appeal as required by section 38.250.030; and b. Appellants are not aggrieved persons as defined by section 38.700.020. This appeal concerns a site plan located within the Gallatin Center for a. WinCo supermarket. The Gallatin Center is part of a planned unit development approved by the Bozeman City Commission ("Commission") in. the late 1-990s, The Gallatin Center is located off of North 191h near the interstate. Several large stores now reside within the Gallatin Center, such as Target, Bob Wards, Petsmart and Staples. The proposed WinCo store would occupy some of the last remaining vacant lots. The WinCo Plan complies with all relevant zoning requirements. As noted by the Department when it approved of the plan, the plan is consistent with the B-2 zoning and the applicable planned unit development. Moreover, the area has been designated for "Regional Commercial and Services" under the Bozeman Growth Policy. Regional Commercial and Services facilities are typically large, prominent buildings (such as Costco, Walmart, Target and WinCo) that serve as a hub for a multi-county region and are located next to significant transportation routes. The appeal before the Commission is based on a misapplication of the Bozeman Growth Policy. The appellants take general statements from the growth policy out of context and strain to argue that the WinCo Plan does not comply. Nowhere in the appeal., however, do appellants acknowledge that the relevant property was specifically designated for Regional Commercial and Services. The WinCo Plan not only complies with the Bozeman Growth Plan, it is exactly the sort of development contemplated by the policy. Put another way, it is difficult to imagine a better use for vacant lots in the Gallatin Center than a WinCo supermarket. It appears that appellants are motivated to file this appeal because they are members of a labor union and they believe a WinCo store in Bozeman will somehow harm union interests. On that topic, Gallatin TR notes than (i) there is no requirement under any code or law that would prevent approval on that basis; and (ii) that concern is not supported by any facts in the record. To the contrary, WinCo is an employee-owned store that provides competitive wages and excellent benefits. A fact sheet prepared by Winco is attached as Exhibit A. Notice of the public comment period for the WinCo Plan was properly provided. No one submitted negative comments to the Department regarding the WinCo Plan. No one raised the issues that appellants now seek to raise. Instead, the public comments that were submitted all favored approval of the plan. For example, a gentleman from Gardiner, Montana, asked the City to approve of the WinCo site because he has to drive to Idaho Falls four times a year to get his bulk supplies. See Exhibit B. A couple from Bozeman. also favored a WinCo supermarket because they observed that Costco requires payment of a membership fee, which can be difficult for someone on a fixed income, while WinCo does not. Exhibit C. The appellants did not raise any issues during the period for public comment. Aside from the fact that their appeal should be denied on the merits, the appeal is precluded by the Bozeman Municipal Code. Section 38.250.030.8 of the code provides that: Failure to raise an issue during the provided public comment opportunity, in person or in writing, or the failure to provide statements or evidence sufficient to afford the administrative review authority an opportunity to respond to an issue, precludes an appeal based on that issue, unless the issue could not have been reasonably known by any party during the time of the public comment opportunity. Finally, the appellants are not aggrieved persons as defined by section 37.700.020. I will be present at tonight's meeting along with certain representative of Gallatin and WinCo. We look forward to the meeting and to the opportunity to address any questions you may have. Regards, GOETZ, BALDWIN & GEDDES, P.C. I A ' L Benjamin J. Alke WInCo FOODS An Employee Owned Company WinCo Foods,LLC P.O.BOX 5756 Corporate Office Q��YEF Oy2 Boise, ID 83705-0756 650 N.Armstrong Place W EO (208)377-0110 Boise, ID 83714 cFRiIF�E'O FAX(208)377-0474 WinCo Foods—Fact Sheet—November 2018 Company • Headquartered in Boise, ID • Founded in 1967—employees,current and former,own 92%of the company through an Employee Stock Ownership Trust. The remaining 8% is owned by current and former employees outside the Trust. • We operate 123 stores and six distribution centers, located in the Western US(AZ, CA, ID, NV, OR, UT,and WA)and Oklahoma and Texas. • We will open our first stores in Montana (Billings and Helena) in 2019. • We want to open a store in Bozeman in 2020. • We employ approximately 18,000 associates nationwide. Employee Benefits • We strive to be amongst the grocery industry leaders in any given trade area in regards to wages, benefits, retirement and working conditions. • Wages—we pay market leading wages for the supermarket industry within each community that we operate. • Benefits: o Hourly employees are eligible for insurance benefits after 3 consecutive calendar months of employment with a minimum of 100 hours per month. Full time employees are eligible first of the next month after hire. o Insurance benefits include medical,dental,vision, prescription,short-term disability, group life, and accidental death &dismemberment(AD&D). o Low deductibles (currently$100 per individual and$300 per family in network) and co- insurance and co-pays. o Cost—currently$30 per month for an individual and up to$45 per month for family (3+). • Employee Stock Ownership Plan (ESOP): o Company contributions have averaged 20%of wages in recent years with no cost to employees. o Employees are fully vested after six plan years with at least 1000 hours worked in each plan year. EXHIBIT s Lr) N (� c 0) (Y) M 1 . 4 h t"1 4 A 0 et N w m Lr) C: i ®J • ®J u Ln W Ln 00 E Ul f e V OOOP w u M Ln Ln Ln 00 m m L F cA CL Ln d l® M CY) f 00 (') r�l 0 m 2 Ln 0 Ql 0® U1 r- cn (U 0 0 c� t` � � 0 m � •® �I m uj c� • V) M e� e� E M aj LA � d1 • Q u C • u LL- Employee Ownership a Win-Win for Workers and Companies Page 1 of 3 Employee Ownership a Win-Win for Workers an Companies . i►��q� �m� �� JrHsearch/empl<>yee-owntiish p-�;n .v„ aor .c s .,. ries/ Cathy Burch and her twin sister Deborah began working 27 years ago, at the age of 19. Cathy took a job at WinCo, a supermarket chain. Her sister went to work at a telephone company. Cathy stayed at WinCo; Deborah moved around. By 2014, an article in Forbes reports, Deborah had about $30,000 in retirement savings,fairly typical for her age group. Cathy, who stayed at WinCo, had nearly$1 million saved for retirement. WinCo, it turns out, is employee-owned through a stock ownership plan, and its stock has done quite well.As an employee, Cathy gets an annual allocation of stock at no cost to her. Cathy's story is exceptional, but workers at employee-owned companies, research shows, fare a lot better in accumulating assets than those who do not.Their companies do better too. In the search for solutions to inequality, many understandably focus on income. But wealth inequality is every bit as big a problem. It can seem difficult to find solutions that are practical and politically feasible. But one idea--employee ownership—has broad support and has proven a dramatic impact. Employee ownership can take a variety of forms. Companies often grant stock options or restricted stock to most or all of their employees, which gives them an equity stake in the company they can cash in after several years.The other popular option is employee stock ownership plans (ESOPs), company-funded employee benefit plans that operate through a trust that holds shares for employees. ESOPs are subject to strict rules to ensure the ownership stakes are divided among employees in an equitable way. In return, companies and their owners get substantial tax incentives. Retiring owners of closely held companies often use ESOPs as a tax-favored way to transition out of the firm.There are about 14 million participants in ESOPs, with over$1 trillion in assets, and another B to 9 million recipients of stock options or restricted stock. aav undated on inequality ad-tbgjAt-eiLime-q-u-aLiv--agws-ilit ri V k https:// ,printfriendly.cotiVp/ /uJci eZ /19/201 Employee Ownership a Win-Win for Workers and Companies Page 2 of 3 ESOPs are the most important of these tools—and the most effective. In a recent study, my colleague Nancy Wiefek of the nonprofit National Center for Em lo - Ownership analyzed data Q yQ_Q from the Bureau of Labor Statistics' National Longitudinal Survey of millennials.The data shows that participants in Employee Stock Ownership Plan (ESOPs fared strikingly better compared to other young workers. The study, Em _gim found that: plQyee Ownership and Economic WeL--B ® Employee-owners in this clataset have 33 percent higher median income from wages overall. This holds true at all wage levels, ranging from a difference of$3,160 in annual wages for the lowest-paid employee-owners to an extra $5,000 for higher-wage workers. • Median household net wealth among respondents is 92 percent higher for employee-owners than for non-employee-owners.This disparity holds true for the great majority of subgroups analyzed, including single women, parents raising young children, non-college graduates, and workers of color, • Employee-owners are much more likely to have access to an array of benefits at work, including flexible work schedules, retirement plans, parental leave, and tuition reimbursement. For example, 23 percent of employee-owners have access to childcare benefits, compared to 5 percent of non-employee-owners. ® Employee-owners in this dataset have substantially more job stability than non-employee- owners:their median tenure with their current employer is 5.2 years, compared to 3.4 years for the non-employee-owners. These results hold up in other studies on the 14 million participants in ESOPs.Reser ar.h from the National Bureau of Economic Research, Rutgers, our organization, and elsewhere finds that employees in these companies get paid more, have 2.2 times the retirement assets, and are one- third to one-fifth as likely to be laid off, all paid for because their companies perform better. ESOP companies also generate about 2.5 percent more jobs per year than would have been expected absent an ESOP. Although the concept of employee ownership has broad bipartisan support, it is not the top of many agendas politically. Prominent pundits don't often talk about it, and it's rare for reporters writing about wealth and income inequality to mention it.This idea works, and it's both politically practical and economically successful. The growing popularity of employee ownership is reason to be encouraged. Committees in both Houses of Congress, for instance, passed two different_b&I without dissent to increase the Small Business Administration's programs on employee ownership. The policy has also won high-profile champions. Senator Gillibrand led the effort on the Main Street Employee Ownerships Act,Visiting an employee-owned company, she said "Too many hardworking New Yorkers are still struggling to get jobs that pay them enough to take care of their families, pay for their children's tuition, and save for retirement, because their companies care more about shareholder value than their own workers." https://www.printfriendly.com/p/g/uJcheZ 6/19/2018 Employee Ownership a Win-Win for Workers and Companies Page 3 of 3 "Companies can absolutely reward work without sacrificing profit, and ESOPs are a proven way to do it," Gillibrand continued. I will continue to fight as hard as I can in the Senate to pass legislation that rewards work and supports employee ownership around New York and the country." We would all do well to join her. Corey Rosen is the founder of the National Center for Employee Ownership, a private non-profit membership and information organization focused on broad-based employee ownership. Topics Solutions, https://www,printfriendly.com/p/g/uJcheZ 6/19/2018 Millionaire Grocery Clerks: The Amazing WinCo Foods Story-Forbes Page 1 of 4 Forbes http://onforb.es/lAJgj e Mary Jossphsconthbutor I write about entrepreneurs'exit strategies,ESOPs and M&A. O,Won'nt,nu�o eY►ebn GoMNubn on MYr om ENTREPRENEURS 1 IIOM014 0 12:03PM 07,725hews Millionaire Grocery Clerks: The Amazing WinCo Foods Story Comment Now In Corvallis,Oregon,a couple miles north of the Oregon State Universiky campus,sits a WinCo Foods discount supermarket and,unless you're in need of groceries,you might drive by without noticing it.I assure you,however,it's an extraordinary building,a laboratory of capitalism worthy of pilgrimages by the world's great business schools. Inside the store labor 13o employees of WinCo—grocery clerks,shelf stockers,display builders,bakery workers—and their combined retirement savings roughly comes to an astounding$ioo million.And that figure is growing rapidly,such that in a few years the average wealth of these employees could easily exceed$i million.Quite a few individual workers already have account balances above that level. t. 9 1 . 'Y Customms bap thdr own grooerin at a%Info Abode b oadon(lxedit:Joe JaesewA VAP) Outside of Wall Street and Silicon Valley,the WinCo store represents an unusually concentrated—and unlikely—grouping of millionaires.The secret to their wealth is employee ownership.Since 1985,W1nCo,which operates 98 stores across eight states from its headquarters in Boise,Idaho,has been http://www.forbes.com/sites/maryiosephs/2014/11/05/millionaire-arocerv-clerks-the-ama... 11/10/2014 Millionaire Grocery Clerks: The Amazing WinCo Foods Story-Forbes Page 2 of 4 employee owned,with an Employee Stock Ownership Plan.or ESOP,as the vehicle for its workers'main retirement savings. (WinCo also has a 4oik and about 7o%of workers participate.) The company is by all indications well managed,grows steadily and provides its clientele of families on a budget a combination of low prices,wide selection and efficient and friendly service.Sales for fiscal 2015 are expected at about$6 billion.Same store sales growth and expansion into new markets have propelled WinCo's profits and thus its ESOP stock past competitors and, indeed,past most growth stocks.The shares have risen at a compounded annual rate of about 20%since 1986.Purchased for$io million from its former owners in 1985,company workers today hold shares valued at close to $3 billion. The Corvallis store,with a long-tenured staff,leads all other WinCo stores in accumulated wealth. But it's hardly an outlier:workers at a Lancaster,Calif., store have piled up more than $75 million;Redding,Calif.,more than$65 million;Twin Falls,Idaho,more than$54 million;and those who work at the company's distribution centers have combined ESOP accounts valued at more than$165 million. In Corvallis,the story of Cathy Burch and of her twin sister,Deborah Cook, explains not only the WinCo miracle but also much about the retirement savings crisis in the U.S.On the same day 23 years ago,Cathy and Deborah, then aged i9,walked into the WinCo store and applied for jobs.Each of the women was already a young mother and they were looking for steady work to provide for their families.Retirement savings weren't on their radar screens. WinCo at the time had an anti-nepotism policy and could only hire one sister; Cathy scored slightly higher on an employment test and joined part-time, working two days a week,which she fit in around a 4o-hour schedule at a fast food outlet.After a year flipping burgers,Cathy received a 5-cent hourly raise and was offended by the smallness of the sum. She quit and went full-time at WinCo.In the years since,Cathy has worked a variety of front-line jobs at WinCo,including checker,shelf stocker,inventory orderer and,when I spoke to her one recent morning at about 4:3o a.m.,she was headed off to do"go- backs"for the day,restocking items that customers put into their carts but later choose not to buy. These aren't tasks we normally associate with robust retirement savings,and the Employee Benefit Research Institute would tell you that most Americans in Cathy's situation have either no savings at all or an account such as a 401k containing less than$50,000. http://www.forbes.com/sites/maryjosephs/2014/11/05/millionaire-grocery-clerks-the-ama... 11/10/2014 Millionaire Grocery Clerks: The Amazing WinCo Foods Story-Forbes Page 3 of 4 Cathy tells me,while getting ready for work,"I have almost$1 million in stock."She's 42. "If I wanted to,I could retire right now,"she adds.Instead, she plans to work a good deal longer,perhaps another 15 years,to fund a comfortable retirement for herself and her husband,Kevin,and also to help their five children,ages 13 to 27,get a good start in life. "This is the chance of a lifetime,"Cathy tells me."The work is hard. But it's consistent.I'm used to it.When people quit WinCo,I ask them,`Are you crazyT" Now let's check back in with sister Deborah,who generously agreed to share her story with me.Deborah,too,has worked hard at jobs,moving north to Portland:three years at the regional telephone company;some time at a department store and at a pharmacy;finally at a doctor's office for 17 years. By 2oo8,Deborah,quite typical for someone in her position,had about $30,000 in a retirement account,and it was mostly in stocks.The market collapse roughly cut that total in half,and that was a wake-up call."Since then,I've been looking for another career,"Deborah tells me."Even if I had to go to lower pay but better retirement,I'd do it." After three years of applying,she recently landed a job with a federal agency and figures,after working 25 years until age 67 shell have a decent pension: "I'm 42. I had to start over."For working Americans,of course,a secure and adequate retirement income is increasingly rare and difficult to obtain. WinCo is one of thousands of ESOP-owned U.S.companies employing millions of workers.And its industry includes many employee-owned chains, including Publix,the largest employee-owned company and another great example of ca,pitalism played as a team sport. WinCo has more than 400 front line employees with more than$1 million in their ESOP accounts and hundreds of retirees similarly well set.Each year,it sets aside an amount equal to about 20%of each employee's pay,in the form of stock,and the value of the underlying shares has risen rapidly,too. Retirees can cash out their shares and in fiscal 2015,ending early next year, WinCo will have paid out approximately$200 million to retirees.Over the last seven years,it has paid out almost$i billion to retirees.Retirees pay the usual federal and state income taxes on these payouts. Operating as an S-Corporation for the past decade,WinCo doesn't pay federal or most state income taxes.As a pass-through vehicle,the owners pay the full complement of income taxes when they retire or otherwise withdraw their shares.The tax benefit has allowed the company to expand by investing heavily in new stores. http://www.forbes.com/sites/maryiosephs/2014/1 l/05/millionaire-2rocerv-clerks-the-ama... l 1/10/2014 Millionaire Grocery Clerks: The Amazing WinCo Foods Story -Forbes Page 4 of 4 WinCo competes directly with Wal-Mart(WMT)and other discount grocers, keeping its costs low.It doesn't accept credit cards.Customers bag their own groceries.It scarcely advertises.And that efficient approach permeates the workplace,where,as at other ESOP-owned companies,there is a self-policing culture among workers that reduces waste and boosts productivity. "We work our tails off,"says Lance Hart,another Corvallis store employee with 28 years at WinCo."We're more of a team than just working for a typical company. There's a carrot out there you're working for,for the rest of your life." WinCo management was nice enough to confirm historical and financial facts in this article,but preferred to let front-line workers such as Cathy Burch and Lance Hart speak for their colleagues. WinCo is an unusual workplace.But the power of employee ownership—to transform a company's culture and to reward hard work with financial security—is available to most American companies.Together,the productivity advantage and the significant tax benefits make an ESOP an attractive exit stratejty for most any owner,including private equity funds. One of the great bonuses of working around employee-owned companies,as I have for more than 25 years,is meeting people like Cathy Burch and Lance Hart,who're enjoying well-deserved success. Mary Josephs,former head of ESOP advisory at Bank of America,is founder and CEO of VeritAdvisors,investment bankers specializing in ESOPs.You can reach her at CEO@verit.com. II hls arUde is avaHable online at hnp Honforb es/lAj%e 2014 Forbes.wm LLC^ All fthle Resew h4://www.forbes.com/sites/maryiosephs/2014/11/05/millionaire-grocery-clerks-the-ama... 11/10/2014 Paul Miller P O Box 862 Gardiner, Mt. 59030 406 5810102 City of Bozeman Department of Community Development P O Box 1230 Bozeman, Mt. 59771-1230 Dear Sir; Please get WINCO Stores in Bozeman. 4 times a year I have to drive to Idaho Falls WINCO to get my bulk supplies like grain, rice, and dried fruit. I need WINCO in Bozeman so I can do that type of shopping when I visit my Bozeman doctors. I am getting too old to drive to Idaho Falls. Sincerely, , Paul Miller EXHIBIT 9 ` (-) C c) . m err elidok�-� cA t-s C 7-Y) -2� i K.G �J