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October 2, 2006

Unequal protection? | Critics of chain-store

By Chris Churchill
Portland-area aficionados of Hooters restaurants recently were dealt a blow when city councilors reacted to the prospect of the chain's arrival by enacting a downtown moratorium on most chain eateries and stores.

The 10-week temporary moratorium made Portland at least the third municipality in Maine ˆ— and one of a growing number nationally ˆ— to use the power of law to block the growth of so-called formula restaurants. Ogunquit banned all chains last year, following the lead of nearby York, which banned formula restaurants one year prior.

Supporters of the measures say they help keep Maine from becoming just another strip-malled and faceless part of Anywhere, USA. But the laws increasingly have critics who question their value ˆ— and legality. "It's almost certainly unconstitutional," Orlando Delogu, a professor at the University of Maine School of Law, says of the Portland measure. "It's an abuse of zoning power."

Delogu says banning chain restaurants runs afoul of the constitutional guarantees of equal protection, which aims to ensure that all parties receive equal treatment under the law, and due process, which stems from the belief that laws should be fundamentally fair. To Delogu and other critics, it's fundamentally unfair to allow an independent business to sell pizza, for example, while disallowing the same opportunity to the owner of a Domino's franchise. "What Portland appears to be trying to be doing is purely discriminatory," says Dick Grotton, executive director of the Maine Restaurant Association. "You can have a restaurant, but the guy next to you can't."

Still, as chain stores aggressively look for new markets, laws banning the stores appear to be growing in popularity. But Delogu and others say those laws have rarely been challenged in court. "I think the strategy is new enough that it hasn't gone through any number of legal challenges that are eventually going to come," says York Town Planner Steve Burns.

York long had a law that attempted to limit fast-food franchises by forbidding such franchise fixtures as drive-throughs and multiple cash registers, Burns says. But Dunkin' Donuts, he says, announced it could live with the restrictions ˆ— leading the town to enact a law that limited formula restaurants and eventually led the franchise to look elsewhere. "They had their foot in the door," Burns says. "Then they gave up and left."

Creating a high hurdle
Portland businessman Michael Harris in August announced his intention to bring Hooters to Free Street, across from the Cumberland County Civic Center. The reaction, among some, was quickly negative. And despite the fact that chains already are common near the location of the proposed Hooters, city officials leapt into action and enacted a moratorium designed to allow officials to chart a plan for downtown that might include a permanent ban on chains.

Harris, not surprisingly, is upset by the restriction, which forbids formula eateries with 30 or more locations, and says city officials are denying a restaurant that could help local shop owners by bringing vigor to a neighborhood that is too quiet. "It would be great to think we could fill every one of these shops with local retailers," Harris says. "But at the end of the day, that's not the case."

The Minnesota-based Institute for Local Self Reliance has helped many cities and towns enact anti-chain ordinances; Burns, for example, says York officials consulted the institute's website before crafting their own law. And Stacy Mitchell, a senior researcher with the institute who lives in Portland's Munjoy Hill neighborhood, supports the Portland measure, calling it a reasonable attempt to control the city's future. "We very much needed to take a pause here in Portland," she says. "The potential is that we could end up with a downtown that looks exactly like a bunch of malls. There are certainly a lot of cities where that has happened."

Mitchell says a growing number of municipalities nationally are enacting such laws, adding that the measures are crafted in ways that protect them from constitutional and legal challenges. The key, she says, is that the laws don't forbid chain-store ownership, but instead forbid restaurants that duplicate features found elsewhere and apply to all owners equally. "It's an important legal distinction," Mitchell says. "It doesn't say Starbucks can't come in. It says Starbucks has to open a business that doesn't resemble any other Starbucks in any way. That's a high hurdle. And it's a hurdle that most franchises aren't willing to overcome."

In part because wealthier towns typically enact such bans, anti-chain store measures often are seen as snobbish, an attempt to keep out popular and often inexpensive chains. "It just has an elitist ring to it to me," Grotton says. "It's like saying, 'We're too good to have' ˆ— pick a name."

Yet Mitchell notes that chains such as Starbucks frequently charge as much or more than local shops, adding that she'd be "just as concerned about Talbots locating here as another Dunkin' Donuts."

Some, such as Delogu and Grotton, argue that Portland and other towns worried about their aesthetics would do well to follow the route paved by Freeport, which years ago decided to place strict design regulations on downtown businesses. The guidelines apply to every business equally and resulted in oddities such as a McDonald's stuffed into an attractive colonial house.

But for towns such as Ogunquit, York and perhaps Portland ˆ— depending on whether city officials make the ban on chains permanent ˆ— Freeport's measure doesn't go far enough. It's only skin deep, they say, and doesn't protect existing stores. "We're not interested in having Dunkin' Donuts or any other chains coming in that would adversely affect the town," says Ogunquit Town Manager Phil Clark. "The town just wants to keep itself as old-fashioned as it can."

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