Five 2nd-grade kids who don’t follow strict rules by their school principal Brinway are dubbed “Stinkers” by him. On the class visit to an aquarium the Stinkers decide that a sea lion called Slappy doesn’t feel too good there, “free” him, and plant him into Brinway’s hot-tub.

When a powerful developer named Mr. Scheck wants to knock down all the stores and houses in Arnold’s neighborhood to build a huge “mall-plex”, it looks likes the neighborhood is doomed to disappear. But with the help of a superhero and a mysterious deep-voiced stranger, Arnold and Gerald will need to recover a crucial document in order to save their beloved neighborhood.