The Walgreens drugstore chain didn’t want a Wal-Mart as a neighbor. That’s the backstory in the latest case of a Wal-Mart project cancellation. The Arizona Daily Star reports this week that Wal-Mart has left a local developer in Tucson, Arizona hanging when it pulled out of a shopping center on East River. Wal-Mart currently has six stores in Tucson, half of which are Neighborhood Markets. Across Arizona, the retailer has 60 supercenters, 10 discount stores, 14 Sam’s Clubs, and 17 Neighborhood Markets. Arizona is one of only 15 states with this smallest of the Wal-Mart prototypes. But plans have collapsed for the Neighborhood Market at the mall called River Center. The retailer has spent at least two years in negotiations over this site with the landlord, Larsen Baker LLC. It turns out that Wal-Mart has been rubbed from the project because of the Walgreens drugstore in the same shopping center. Larsen Baker’s lease with Walgreens allows the drugstore to restrict who its competitors are in the center. Larsen Baker told the Daily Star that Wal-Mart sent them a letter notifying the landlord that the retailer was backing out of the negotiations. This left Larsen Baker with nothing but “some ideas” about where to look next for tenants. But Wal-Mart’s departure has created a domino effect with several smaller tenants in the center, and the smaller merchants say they will be forced to leave. Some tenants told the newspaper they were promised an anchor tenant was coming soon. Wal-Mart’s disappearance leaves a vacant, 43,000-square-foot hole at River Center, where there once was an IGA supermarket and another grocery store. An art store and a jewelry store are planning now to leave River Center. One small children’s clothing store owner told the Daily Star, “Moving here was a bad business decision.” And a UPS Store in River Center will shut down in March. “We don’t have an anchor, and we were promised one when we moved in five years ago,” said the manager of the UPS store. “No one can get started in here without some type of an anchor.”
As if Wal-Mart’s decision wasn’t bad enough, this shopping center has suffered through two years of road construction, which has stifled traffic to the River Center. The shopping center owner claims they never promised their tenants an anchor store, even though they had been in negotiations for a couple of years. “We realize the tenants would perform better with an anchor in the center, and the landlord wants an anchor for the rent,” a spokesman for Larsen Baker said. “I am tired of getting the run-around,” one merchant complained. “I have spent four times what I have made at the River Center.” With road construction slated to be done by May, the River Center and the local library is sponsoring a community event in early March that will feature a belly-dancing demonstration, henna tattooing, Clifford the Big Red Dog, and a magic show. But one thing is certain: there will be no Wal-Mart pulled out of a hat, because Wal-Mart has already pulled itself out. When the nation’s largest drugstore chain battles with the world’s largest retailer, it’s the small merchants that get trampled. For Walgreens and Wal-Mart, this is just a minor skirmish, soon to be forgotten. To the small merchants at River Center, however, it could be the end of a life’s work of building a business.
