Wal-Mart and big city Mayors often don’t see eye to eye. But Wal-Mart figures that as the economy slides downward, and more people lose their jobs, Wal-jobs will start to look better, and more cities will open up their doors to the discounter. The giant retailer has run into major opposition from organized labor in metro areas like Boston, Chicago and New York. Boston Mayor Tom Menino wouldn’t let Wal-Mart into Downtown Crossing. Wal-Mart’s forays into Brooklyn have been very bloody. But last June, speaking at an analysts meeting, former Wal-Mart CEO Lee Scott said that New York’s Mayor Michael Bloomberg wanted a Wal-Mart. “I just talked to the Mayor,” Scott said, “who wants us. And Donald Trump called this week. And he’d like to have us. But in general, New York City hasn’t called and said please put a store there. Things get bad enough, they will.” This waiting for things to get “bad enough” is the core strategy in Chicago. On February 6, 2009, Sprawl-Busters reported that Wal-Mart wanted to increase its one-store presence in the windy city. But stiff political winds kept blowing the company off course. In May of 2008, Wal-Mart decided to abandon efforts to locate a store on the South Side of Chicago. The corporation said it was “turning its attention to a backup plan of opening stores just outside city limits.” Chicago Mayor Richard Daley had reportedly advised Wal-Mart that he didn’t want controversial headlines about big box battles in his city while his Administration pursues an effort to host the 2016 Olympics in Chicago. That decision won’t be made by the Olympic Committee until the fall of 2009. If true, that put a strangle hold on any Wal-Mart projects in the short-term. In March of 2008, city officials denied Wal-Mart’s request to build a 150,000 s.f. store in the huge Chatham Market project, which spreads out over 50 acres on the site of a former steel plant, with a total of 418,000 s.f. of retail space. Chicago’s Planning Commissioner notified Archon, an Irving, Texas-based developer that Wal-Mart would not be allowed to open at Chatham Market as proposed. Despite this history, rumors about Wal-Mart’s renewed interest in Chicago began surfacing again in February of 2009. After losing its battle at the Chatham site, Archon, which is owned by the Goldman Sachs Group, put Wal-Mart’s piece of the southside property up for sale, hunting for a new, and less-controversial anchor. In Chicago, the issue was not over zoning, but over wages. The Chicago City Council passed a “living wage” ordinance, but on September 19, 2006, Mayor Daley vetoed the legislation, which would have forced large corporations to pay a “living wage” to its workers. The City Council voted 31-to-18 to override his veto, coming just 3 votes short of the necessary two-thirds needed to override. The ordinance would have set minimum pay and benefit levels for any major retailer with a store 90,000 s.f. or larger. Wal-Mart issued a press release just after the vote which said: “We will open our first store in the city on Chicago’s west side later this month. This store will show what a great asset Wal-Mart can be to the community, as an employer and corporate citizen, and as an affordable resource for thousands of Chicago’s working families.” It never worked out that way. Wal-Mart had hoped to open 20 stores in the city. Thus far they have opened only one 142,000 s.f. discount store on the west side of the city — and only after a very contentious political debate. But Wal-Mart never gave up on its south side dreams. In February, 2009, the Chicago media ran stories that said Wal-Mart was preparing a ‘new push’ for as many as 5 new stores in Chicago. Chicago Alderman Howard Brookins, who has long supported a Wal-Mart in his ward, said the retailer wants to build its next store in his district, the 21st Ward on Chicago’s South Side. Two other potential stores would also be located in the 20th and 34th wards, which are also on the South Side. But on March 4, 2009, Sprawl-Busters noted that most Chicago Aldermen remained opposed to Wal-Mart. Mayor Daley asked Brookins to hold off on pushing a new store. Crain’s quoted one Alderman as saying Wal-Mart “would be welcome to come to Chicago if they gave their workers the right, if they so desire, to organize. We are simply asking them for that level of fairness.” Alderman Brookins has drafted legislation that would take away power to approve the store from the city’s Community Development Commission, and give that right to the City Council, but the Mayor has told Brookins he needs to have enough votes to overcome a Mayoral veto — which Brookins is not likely to have. That’s because over time, at least half a dozen of the Aldermen who supported Wal-Mart in 2006 have lost their seats. But Wal-Mart continues to push its voodoo economics claim that big box retail stores will help the city financially by generating sales taxes. Unfortunately, what the company fails to reveal is that most of that sales tax comes from replacing existing merchants who are generating that same sales tax now — and paying their people a better wage. “We are evaluating all projects on a case-by-case basis,” Wal-Mart said in written statement, “and balancing the city’s current political and economic climate as we work to bring new locations to our Chicagoland customers.” This week, the Chicago Tribune repeated Mayor Daley’s opinion that there is ‘no chance’ that a south side Wal-Mart will happen. On April 23rd, Daley told reporters there just were not enough votes on the City Council to pass a redevelopment agreement. Daley said Wal-Mart would bring taxes and jobs to Chicago, but one of the Mayor’s key floor leaders on the City Council told the Tribune that the Mayor is trying to keep peace with the unions. “This is not gonna fly. You know that. They don’t have enough votes,” Daley concluded.
If Mayor Daley wants to make peace with organized labor, his comments about Wal-Mart are likely to have the opposite effect. “You get revenue off of that,” Daley told reporters. “You create jobs. They hire people from the community during construction and after. … But, it’s a political issue and they just don’t have enough votes.” Daley criticized labor as only trying to block Wal-Mart in Chicago, while allowing the retailer to build stores in a ring around Chicago. There are currently 19 Wal-Marts within 25 miles of Chicago, but innercity residents are not likely to be driving twenty miles into the suburbs to find cheap underwear. There have been anti-Wal-Mart battles in places like Tinley Park, Illinois, 23 miles from Chicago, and many other small town battles in Illinois, like East and West Dundee, Rockford, Godfrey, St.Charles, etc. “You can build Wal-Marts all over Cook County,” Mayor Daley complained. “You can build ’em every day and no one says anything. They’re building one of the largest Wal-Marts in Cicero and not one person will call the mayor, call the aldermen or say anything. It’s a very political issue. Labor says no Wal-Marts should be built in Chicago, but everyplace else is alright. Everyplace in Illinois, except Chicago. … That’s the thing I don’t understand.” The head of the Service Employee’s International Union told the Sun Times, “We’re not opposed to Wal-Mart coming to Chicago if they’ll be good corporate citizens. … That means if you take tax dollars or TIF [tax-increment-financing] dollars, you have an obligation to the community in how you conduct your business.” Meanswhile, this fragile peace with the unions may only last until October of 2009, when the International Olympic Committee makes its decision on where the Games will be held. In April of 2006, Wal-Mart CEO Lee Scott, said that Wal-Mart “has never been afraid to invest in communities that are overlooked by other retailers.” “We are a store that wants to come in and invest in that community,” a Wal-Mart public affairs spokesperson told The Chicago Tribune in the spring of 2008. Readers are urged to email Alderman Howard Brookins at: [email protected] with the following message: “Dear Alderman Brookins, I think you’ve got the right vision for the 21st ward — but the wrong company. You correctly say that the goal should be ‘new development [and] the creation of employment opportunities.” But then you promote projects like a Wal-Mart supercenter — which does neither. A Wal-Mart on the South Side — or any side — of Chicago does not create “new” jobs. It represents old jobs transferred from other merchants. It’s just shifting market share, and most of the sales will come from existing merchants in your ward. I know you have talked to many businessmen in your ward. They will tell you off the record that inviting Wal-Mart to the South Side is like inviting the cannibals to dinner. This is the company that had to vigorously deny reports that it was counseling its workers to vote against Barack Obama. This is the company that recently had to settle hundreds of wage and hour lawsuits brought by its own workers. Is this ‘new’ development and employment opportunity? How symbolic is it that Wal-Mart wanted to build at the Chatham Market, the site of an old steel plant? Wal-Mart adds no economic value to Chicago — because they make nothing, and what they sell others already carry. This is not the proud vision of a workforce in the 21st ward laboring at good wages, with good benefits. I urge you to focus on added value, on developing community-based economic development, and not chasing after national chain stores. The 21st ward does not need this kind of ‘new development.'”