For years, Wall Street analysts have criticized Wal-Mart for cannibalizing its own sales by cramming superstores on top of one another. Wal-Mart said it was going to stop the cannibalization, but the company its still eating into its own sales. The latest case in point is Jefferson City, Missouri, which this week showed shareholders what cannibalism looks like. On April 30, 2006, Sprawl-Busters reported that the city of Jefferson City had to come up with an armful of financial incentives to attract a second Wal-Mart supercenter to the east side of this community. The land the giant retailer wanted first had to be annexed. It then needed to be rezoned. The shoppers who use this store will get hit with a special tax to pay for the project’s infrastructure, and landowners near the site were forced to give up their land to pave a road to the store. Just about everything’s wrong with this picture, but local officials in Jefferson City were unfazed by the prospect. This so-called “eastside” Wal-Mart started off at 204,000s.f., the size of 4 football fields glued together. It’s located less than two miles from the existing “westside” Wal-Mart in Jefferson City on Stadium Boulevard. Wal-Mart wowed city officials by telling them how unique this store was going to be, painted a palette of “neutral hues” like “Trusty Tan,” “Renwick Rose Beige,” and “Nobility Blue.” The store was slated to have a “row of ornamental trees” around the parking lot, “stamped concrete pedestrian walkways” and, how unusual — “a large pylon sign.” To make all this beauty reality, the city created a Transportation Development District (TDD) to pay for an access ramp off the highway at City View Drive. The TDD will levy on shoppers a one cent tax per every $1 spent in the district. The tax is imposed by consent of the property owners, and will be assessed over a number of years until the bonds are paid off. Wal-Mart apparently can’t afford to do this roadwork itself, so local shoppers will pay literally to pave a road to Wal-Mart’s front door. In addition, the City Council also had to approve the voluntary annexation of 40 acres of land, rezone a portion of the land from rural to commercial, and grant a special use permit to build such a large store, because City statute requires a special permit for any store in excess of 100,000 s.f. — and this one is twice that threshold. As topping on the cake, the city had to obtain nearly 7 acres of land from farmer Stephen LePage. The city had the choice to either buy the land from LePage, or take it by eminent domain. LePage’s land was needed to provide an access road to the superstore. The LePage family had a 60-foot-wide easement across the proposed big box site. The family uses that easement to move agricultural equipment around the farm. LePage wanted to keep a 60 foot easement, and complained to city officials that someone had to pay for relocating major gas lines that cross the area. He also pointed out that the TDD zone was just a way for the developers to get off having to bear the full cost of their project. “It will be paid for by the customers,” he said. “Wal-Mart reports profits of nearly $28 million a day. And they’re building this store at no cost. It’s ridiculous,” he told the newspaper. Jefferson City Mayor John Landwehr was all for this project when it was proposed, complete with eminent domain and corporate welfare. He just wanted to get a new road interchange built, and taxing shoppers seemed like a good way to get it done. And Wal-Mart is as proud as a dog on a hydrant. “We’re looking forward to serving more customers on the east side of Jefferson City,” a company spokesman said. “We want to work with the mayor and the council to ensure the store is representative of the community.” Whatever that means. This week, more than three years after being proposed, the Wal-Mart eastside store joins superstore #29 on the westside of Jefferson City. The headline in the Jefferson City News Tribune read: “New Wal-Mart Bring New Jobs and Layout.” For a city with just under 41,000 people, the idea of two Wal-Mart supercenters within 2 miles of one another makes little economic sense. The new supercenter has been shaved in size slightly to 197,346 sf. On June 17, 2009, members of the Jefferson City Chamber of Commerce and new customers came to the ribbon cutting. The retailer says the superstore will employ about 325 associates — including 65 workers who transferred from the westside store to the eastside store. As is customary at ribbon cutting, Wal-Mart passed out a few foamboard checks, including one to the Jefferson City Police Department’s K-9 Unit, which is appropriate, since the cops are likely to spend a lot of time driving back and forth from the eastside and the westside Wal-Mart parking lots. The new store might even force the city to add a couple of new jobs at the police department as well.
East side, west side, all around the town. Jefferson will be saturated with big box stores, and smaller merchants will continue to lose market share and die. This case is so emblematic of all the wrong ingredients. The land was not zoned correctly, it’s not even in the city. A farmer had to give up his land involuntarily to make it work, and Wal-Mart was given special permits and tax breaks that smaller retailers would never get. In order to make the numbers work, public subsidies had to be arranged for the largest retailer in the world. It defies logic, especially for a project that brings no added value economically to Jefferson, which already has its westside store. All this superstore sprawl makes no sense in a community that was recognized last year with a Preserve America Communities award. Jefferson city has three historic districts, and now two Wal-Mart superstores. Readers are urged to contact Jefferson City Mayor John Landwehr by going to: http://www.jeffcitymo.org/Forms/jlandwehrForm.asp and leaving the following message: “Jefferson City seems to be traveling two divergent paths: Preserve America, and Sprawl America. You never want to get to the point where your superstores outnumber your historic districts. A city the size of Jefferson City only needs one Wal-Mart superstore. Placing two superstores within two miles is an example of the saturation of Missouri that Sam Walton used to brag about. Wal-Mart is not a form of economic development for Jefferson City. You needlessly shoveled subsidies to Wal-Mart, which certainly could have financially pulled off this project without charging shoppers an extra tax to pay for infrastructure. This redundant eastside store will merely take more market share away from existing merchants in Jefferson City, like the Hy-Vee food stores, and the Target store. There will not be 325 ‘new’ jobs, because most of them will come from existing merchants or Wal-Mart’s westside superstore. It’s time for Jefferson City to look outside of the box for your future growth. Putting a cap on the size of future retail buildings is a good way to stop the sprawl in Jefferson.”
