Wal-Mart has been trying to build a store on the south side of Chicago, Illinois for at least four years. Even Bad,Bad LeRoy Brown couldn’t help them get into the south side now. On August 31, 2004, Sprawl-Busters reported that Wal-Mart’s contract to build a south side store had expired. Wal-Mart said it was walking away from the south side store because of its concerns over “wage and benefit” standards that city officials were planning to put into city zoning ordinances. “It’s not about a living-wage issue,” a Wal-Mart spokesman said. “It’s about an ordinance that singles out just some — not all — businesses in Chicago. We wanted to defer the discussion until we got a better sense of how this big-box thing was going. We’re just not comfortable committing considerable capital investment to a site when we don’t know if we’re going to be able to operate in Chicago. The developer, rather than extending our contract, decided to go ahead with the [zoning] vote. It’s not our call. The project is going ahead without us.” Wal-Mart had already received approval for a controversial 142,000 s.f. West Side project in Chicago after much public debate. On the south side, even without Wal-Mart, the developer pushed ahead to get the land rezoned from industrial to commercial. The project requires heavy public subsidies in order to succeed. The developer had his hand out for a $33 million tax-increment financing (TIF) deal to handle the environmental clean up and other site specific work. Although the west side Wal-Mart was narrowly approved, the second store in the Chatham neighborhood on the south side of the city lost by a one vote margin. On September 19, 2006, when Mayor Richard Daley vetoed the legislation that would have forced large corporations to pay a “living wage” to its workers, Wal-Mart issued a press release 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.” This week, four years after Wal-Mart began its south side lobbying, their plans are still blowing in the Chicago wind. The city has 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 Arnold Randall notified Archon, an Irving, Texas-based developer on March 14, 2008, that Wal-Mart would not be allowed to open at Chatham Market as proposed. “If we can’t make this site feasible,” a Wal-Mart spokesman told the Chicago Tribune, “obviously, other sites are questionable at best. So we need to work through these issues first.” Wal-Mart has the support of the Chicago Alderman Howard Brookins, Jr. whose district covers Chatham Market. “If they want to fight and press forward with this thing, I’m willing to do it,” Brookins told the Tribune. “I just don’t want to be out there on my own. Wal-Mart does have faults, but I want what’s best for my community.” One technical roadblock for Wal-Mart is that the city’s redevelopment agreement with Archon allows the city to approve any user whose building is larger than 100,000 s.f. Planning Commissioner Randall was able to cite that provision when rejecting Wal-Mart’s plans. To get around this provision, Wal-Mart would have to get the City Council to vote to repeal that clause, which means giving up that control over the project. But on another front, the labor unions say they are ready to reintroduce their living wage bill — which the City Council passed once — which led to a high profile conflict between the Mayor and organized labor. “I don’t think anybody wants to revisit the big-box living wage ordinance, but we’re not going to back down on it,” Dennis Gannon, the president of the Chicago Federation of Labor told the Tribune. “If they come into this marketplace that is dominated by organized labor and if you let Wal-Mart wages take place here, you’re driving down everybody’s wages.” The city’s Planning Department says they are willing to help Archon get a second tenant to provide company for the 117,000 s.f. Lowe’s store that is already located in Chatham Market. Not helping matters for Wal-Mart is the letter the original developer of the Marketplace sent to the city in 2004 saying, “Wal-Mart is not now, and will not be, a part of our development.”
There’s a lot of money behind the Chatham Marketplace. Archon is owned by Goldman Sachs. The owners see a very lucrative market on the south side. Archon says that the area is “under-retailed” despite the current presence of many other big box stores like Home Depot, Lowe’s, Target and Marshalls. “Trade-area demographics in a five mile radius of 840,000 residents and average household income of $46,000,” is how Archon describes the area. It is located directly off interstate 94, and has traffic counts on the Dan Ryan Expressway alone of 262,000 cars per day. To sweeten the deal, Archon negotiated what they call a “public incentive financing package based on property tax abatement.” Because site work involved the remediation and demolition of a former steel plant, the project received a large check from the taxpayers. Opponents of the project say all that public subsidy should not be used to attract a retailer that will only push down wages in a race to the bottom. Readers are urged to email Chicago’s Ward 21 Alderman Howard Brookins, Jr. at: [email protected] with the following message: “Alderman Brookins, a Wal-Mart at Chatham Marketplace will not mean more jobs for the area, just as Target and Home Depot did not bring ‘new’ jobs to your district. All these jobs are displacing existing jobs elsewhere in the trade area. As much as 85% or more of sales at a Wal-Mart come from other merchants. In this case, other grocery stores in the area will be hurt, like the Cub Foods on the other side of the expressway. Wal-Mart pushes down wages all around it. So this is not a form of economic development for Ward 21 — it’s a form of economic displacement. Archon is benefiting from millions in public subsidies for this project. Wealthy companies like Wal-Mart don’t need public welfare. I urge you to stop supporting the Arkansas corporation, and start supporting the workers of your district.”
