On October 6, 2010, Sprawl-Busters reported that city officials in Baltimore, Maryland were throwing public cash at the world’s largest retailer, in what could be called Wal-Mart’s “Baltimore Bailout.”
Next week the Baltimore City Council will take the final vote to give Wal-Mart a big public subsidy. Wal-Mart has proposed the construction of the city’s second Wal-Mart. Plans call for a 93,000 s.f. supercenter that will be located on top of a 100,000 s.f. Lowe’s home improvement store. The proposal is known as the 25th Street Station.
Last year the City Council approved significant tax breaks for this project. This parcel of land is located in what Baltimore calls a “focus area,” which is really a “subsidy area” for large corporations. Under the focus area plan, a retailer can receive major property tax subsidies, on top of tax credits for hiring workers in the community. One estimate put the tax breaks as high as $10 million over the next decade.
In addition to the ‘focus area,’ this site is also designated as an ‘enterprise zone,’ which comes with other candy store tax incentives.
Eight years ago Wal-Mart opened up its first Baltimore store in the waterfront area. Now Wal-Mart is trying to promote this new project as a ‘green’ building, because it will have a ‘green roof’ with vegetation to filter the storm water runoff from the roof.
The developer is suggesting that the project, which is estimated to cost $90 million, will produce 750 permanent jobs, which includes the Lowe’s, the Wal-Mart, a Marshall’s, A Staples, and an Anna’s Linen store. The developer, WV Urban Developments, said they tried to get grocery chains interested in the site, but had no luck — except for Wal-Mart.
The developer’s job figures are not adjusted for the jobs that are killed at other retailers. “The site will do so many things, and it’s so consistent with where Baltimore is headed as far as the green movement, and trying to generate jobs,” a Wal-Mart spokesman told the Daily Record newspaper last month. “This area has informed us that they want a Wal-Mart.” Clearly Wal-Mart didn’t talk to the neighbors as part of their site research.
The Montreal-based developer said Wal-Mart approached him, because the retailer had done an internal survey which showed that nearly 4 out of 10 shoppers in Baltimore leave the city to shop in suburban areas, and 7 out 10 people surveyed said they approved of the idea of a second Wal-Mart in Baltimore. It’s the same “food desert” argument used by developers in Chicago.
As is always the case, many area residents near the 25th Street Station want nothing to do with the project. A group called the Remington Neighborhood Alliance has raised concerns over traffic and the unattractive design typical of big box stores. “We’re not going to be focused on who the tenants are,” one leader of the RNA told the Daily Record. “We’re going to be focused on the physical details of the project, and the impact on the neighborhood.”
The Wal-Mart store as designed will be right up against the street edge. The project also includes up to 85 housing units, and 16 small retail stores on the first floors of the rear of these houses.
Symbolically, this Wal-Mart represents the changing times in American cities: the site the retailer wants was once a GM and Honda dealership for more than half a century, but with the implosion of the American auto industry, the dealership in Baltimore was notified by General Motors that the car maker would no longer be selling cars at the 25th Street Station area. As the auto industry shrinks, its land is being bought up by one company that prospers in a recession: Wal-Mart.
Wal-Mart needed to get a Planned Unit Development from the Planning Board. On April 13, 2010, Sprawl-Busters reported that Wal-Mart had dropped a bombshell on the neighborhood. The developers told the audience at a community meeting that they want their Remington Wal-Mart to stay open 24 hours a day. Wal-Mart is writing its own ticket to give the Baltimore City Council: legislation that would allow the project to be built, and to stay open all night.
An attorney representing the 25th Street Station project told an audience at the Hampden Community Council last April that his development team was in the final stages of drafting City Council legislation that would permit construction of the development. Part of the proposed legislation would allow retail tenants to stay open 24 hours a day. The developer has convinced one City Councilor, Belinda Conaway, to file the legislation for Wal-Mart.
The Remington Neighborhood Alliance (RNA) was not thrilled with the idea of this huge store being lit up all night, with people coming and going. Wal-Mart parking lots are one of the most crime-infested retail locations in the country. Joan Floyd, the President of the RNA, said residents will not be pleased with the all-night plan. “It’s going to raise some new concerns,” she told the Baltimore Sun. “We’re going to have to see how this plays out.”
To get this project approved, the City Council had to vote to rezone the land and accept legislation that allows 320,000 s.f. of retail space, including the Lowe’s and the Wal-Mart. The developer will literally be writing its own ordinance to get into Baltimore. The developer made it clear that the 24 hour plan is something Wal-Mart says it needs. “We don’t get to decide that,” the developer’s lawyer said. “That’s what the retailer wants. There are people who think that a 24-hour operation is better because you have people there all the time.” A 24/7 store may be what Wal-Mart wants — but the real issue is what the neighborhood wants.
According to the Baltimore Messenger newspaper, when the developer announced that Wal-Mart would stay open all night, “an audience of 75 at the Roosevelt Recreation Center gasped audibly at the news.” The neighbors understand that crime will be a major headache for the community if the big box store stays open all night. Lowe’s stores do not stay open all night. The developer admitted that he had not discussed the expanded hours of operation with the Baltimore police.
At the community meeting, the neighbors spoke out about traffic congestion, store security, Wal-Mart’s track record in putting smaller stores out of business, and paying low-everyday wages. But the developer’s lawyer tried to give the project a positive spin. “I would encourage you to keep an open mind. The direction the company is taking is extremely impressive. There are people who don’t like Wal-Mart. There are people who are going to die hating Wal-Mart.”
In early October, the City Council’s Land Use Committee approved the Remington Wal-Mart project on a unanimous vote. The City Councilor who represents this district, Belinda Conaway, told The Sun, “I’m not happy. I don’t want an 11-acre vacant piece of property in my district, but I still want to work with the developers and Wal-Mart to increase benefits to workers.”
Conaway is not the only elected official who wants higher wages and benefits to be part of the deal, but the Vice President of the City Council has suggested that wages are not part of a zoning discussion.
The Remington Neighborhood Association continued its criticism of the city’s handling of the traffic generated by this project. But Wal-Mart’s lawyer told the media that “Baltimore City desperately needs this kind of investment.” Wal-Mart has made it clear that is does not want the Baltimore City Council to pass a living wage law, but efforts are currently underway at the Council to bring wages back into the discussion.
On October 29th, the city’s Urban Design and Architectural Review Panel approved of the 25th Street Station’s design. On Novemer 8th, the City Council voted 15-0 to approve the project. All that remains now is a routine final vote on November 15th by the Council on the 11 acres project.
Councilor Belinda Conaway continues to believe that Wal-Mart is a form of economic development. “As opposed to having vacant property sitting in the district,” she told ABC News, ” I’d definitely rather have a retail area that creates jobs and uplifts the neighborhood.” But this large parcel was not likely to remain vacant, and could have been used for mixed use development with a range of smaller, local businesses more beneficial to the economy — rather than another national chain store.
One City Councilor worried about the economic impact of the store. “I worry about places like Falkenhan Hardware Store,” Councilor Mary Pat Clarke told ABC. “I’m hoping that we will come out of this with some kind of program to help the local businesses.” Clark explained that Baltimore’s legal department would not allow a ‘living wage’ ordinance to be inserted into the Wal-Mart deal. “We the taxpayers are subsidizing the big retailers because they’re paying minimum wage and we’re making up the difference with the section 8 vouchers, the housing vouchers,” Clarke said.
Throwing tax dollars at Wal-Mart jobs is like giving sirloin steak to a dog. Companies like Lowe’s and Wal-Mart — some of the most prosperous retailers on the globe — do not need tax subsidies to build their stores, in Baltimore or anywhere else. Yet city officials pile on the perks, without justification or examination.
Wal-Mart’s spokesman told the Baltimore Business Journal, “The store will deliver outstanding value to customers and create quality job opportunities for local residents.” But this tax investment is not creating “quality jobs,” and offers little by way of opportunity. Retailing in Baltimore the past few years has been like a game of musical chairs. When the music stops, someone is left without a chair to sit on.
About a year ago, Filene’s Basement announced that it was closing down three stores in Baltimore. Other major retailers have shut down also. Regional retailer Boscov’s Department Stores shut down three stores, and discount retailer C-Mart closed a store last year as well. One of the Filene’s stores that closed was in the Towson Place Shopping Center. The store was only open for five years. It was located near a Wal-Mart and a Target in the same mall.
The rash of store closings cost the city hundreds of jobs — which explains why Wal-Mart’s claim of “new” jobs is not a credible figure. The big box national chains like Wal-Mart kill off the smaller regional chains like Filene’s, Boscov’s and C-Mart. And the city gives them subsidies to do it — welfare that smaller retailers cannot qualify for.
Readers are urged to email Baltimore District 7 City Councilor Belinda Conaway, who represents the Remington area, at [email protected] with the following message:
“Dear Councilor Conaway, Baltimore does not need more suburban sprawl like the proposed Wal-Mart, and many neighbors are not supportive of allowing Wal-Mart to remain open all night. Don’t be fooled by the development team’s talk about 750 jobs. If you talk to your small businesses, they will explain to you why Filene’s is gone, why Boscov’s left, why C-Mart shut down a store.
There are no ‘new’ jobs being created by this project. Wal-Mart has been compared to the plague: it makes all businesses sick, and kills the weak. You should use your influence before the final vote on November 15th to strip away all public subsidies for this giant corporation, and let Wal-Mart and Lowe’s pay the full cost without bailout money.
I urge you not to come to the rescue of this project, but to let it fall from its own weight, and listen to what your neighbors and constituents are saying. Most of all, do not invest one dime of tax breaks in this project. The idea of giving the billionaire Walton family free money from the taxpayers is really beyond logic.
If Wal-Mart and Lowe’s cannot pull off this project financially, like small businesses have to do, then let them find another city to leach from. Keep taxpayer welfare out of the deal, and tell Wal-Mart to pay its own way, or look for a handout somewhere else. This is the kind of bailout that has angered the public: welfare for the rich. Your small businesses in the neighborhood watch as the large players get one more tax break that the small guy cannot get. Before you vote, strip this project of all its ‘focus area’ and ‘enterprise zone’ tax breaks, and delete the 24 hour provision in the plan.”