Many members of the Los Angeles City Council think poorly ofWal-Mart, and with some good reason. They fear the giant retailer's reputation for crowding small businesses out of neighborhoods, and they are sensitive to the charge that the company's commitment to holding down prices comes at the expense of salary and benefits for its nonunion workforce. Egged on by their supporters in organized labor, members of the council will take up a proposal Friday to impose a temporary moratorium on retail development in Chinatown. That measure in theory would block any large chain store from locating there; in practice, it is aimed at just one: Wal-Mart, which has proposed a 33,000-square-foot grocery. The council's move may be understandable, but the proposal is unwise and counterproductive.
Los Angeles' reputation as a place that is difficult to do business is all too justified. Its gross receipts tax discourages many companies from locating here. Its regulatory rules — to protect the environment or to mitigate traffic or to serve other laudable goals — make it more costly and complicated. But its biggest drawback may be its endemic uncertainty. Rather than presenting potential businesses with reliable rules and allowing those businesses to judge whether they can or will comply, every deal in the city is subject to negotiation. Sometimes that's necessary when a community confronts an unexpected threat to its character; more often, it offers opportunities for leverage. (Does anyone believe that the City Council would be balking if Apple had proposed a store for this site? Or that concessions are not the endgame here?)