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| Economy |
| District leaders furious Walmart breaking promise to build stores in poor neighborhoods |
| 2016-01-17 |
| Walmart abruptly announced Friday that it was abandoning a promise to build stores in Washington's poorest neighborhoods, an agreement that had been key to the deal allowing the retailer to begin operating in the nation's capital. They don't like it when they get beat at their own game it seems. The giant retailer cited increasing costs for the new projects and disappointing performance at the three D.C. stores it opened over the past several years. But news that Walmart would pull out of two supercenters planned for east of the Anacostia River, where its wares and jobs are wanted most, shocked D.C. leaders. In one case, the city had already committed $90 million to make a development surrounding one of the stores viable. "I'm blood mad," D.C. Mayor Muriel E. Bowser (D) said at a Friday news conference. As mad as you were when 0bean lied about abortion funding in order to get that holdout group of Dems to vote for 0bamacare? "It's an outrage," said former mayor Vincent C. Gray (D), who in 2013 completed the handshake deal for the stores. "This is devastating and disrespectful to the residents of the East End of the District of Columbia." Almost as devastating and disrespectful as when the store would have been looted in the future for some imagined insult. The decision to withdraw from the planned D.C. locations came as part of a broader strategic move by the nation's largest retailer to shutter 269 of its stores around the world -- but not the existing D.C. stores, the company confirmed -- a plan Walmart hopes will allow it to focus on becoming a more serious player in online shopping and to improve its remaining fleet of supercenters and grocery stores. But in the nation's capital, the two stores were more than statistics. For D.C. leaders, they amounted to Walmart's breaking a promise that had allowed it to win a public relations coup at a critical point for the company. Don't take it personal, it's just business. After saturating the nation's rural landscape with big-box stores at the turn of the decade, Walmart had been blocked by liberal politicians and unions in New York and Boston from its next frontier, remaking retail in the nation's urban core. But in the District, Walmart won the right to open stores surrounding the U.S. Capitol -- and a symbolic victory for its belief that low-price goods help its poor customers more than low-wage jobs hurt its workers. Under the initial deal, Walmart could build stores almost anywhere in the District, as long as it opened two stores in its poorest wards and areas of the city sometimes referred to as food deserts, with few -- if any -- options for fresh produce and groceries. One was planned for Skyland Town Center in Southeast Washington and the other at Capitol Gateway Marketplace in Northeast Washington. The deal came at significant cost, however. Pushed by labor unions, a majority of the D.C. Council at first pushed back against welcoming Walmart to the city. Opponents cited Walmart's large profits and refusal to let workers unionize, as well as its reputation for low wages. I recommend the Unions join the Chinese embassy in a joint condemnation. But as recently as last week, all of that seemed like a distant memory. In her list of first-year accomplishments, Bowser had included a ribbon-cutting ceremony at the city's latest Walmart, at Fort Totten, in a video montage and listed a technical deal signed in the fall that cleared a final roadblock for construction at Skyland. Then on Friday, the deal was off. Walmart officials entered the mayor's office early in the morning and apologized, saying plans and economics had changed. Large urban Walmarts were more expensive to build and less profitable to operate than expected -- especially, it turned out, in the District. Maybe if the Dems fostered a better economic environment this wouldn't have happened. But . . . HEY! LOOK OVER THERE! Mike Moore, Walmart's executive vice president of supercenters, said in an interview that the decision to pull out of the projects at Skyland and Capital Gateway was based on Can anyone say "higher minimum wages?" So far, Moore added, the three stores Walmart has opened -- one blocks from Union Station in the trendy NoMa neighborhood and two in gentrifying areas along Georgia Avenue and at Fort Totten -- were underperforming and "just not anywhere close to your expectation." Council member Jack Evans (D-Ward 2), head of the council's finance committee, sat in on the meeting Friday morning with Walmart officials and Brian Kenner, Bowser's deputy mayor for planning and economic development. Evans said that, behind closed doors, Walmart officials were more frank about the reasons the company was downsizing. He said the company cited the District's rising minimum wage, now at $11.50 an hour and possibly going to $15 an hour if a proposed ballot measure is successful in November. He also said a proposal for legislation requiring D.C. employers to pay into a fund for family and medical leave for employees, and another effort to require a minimum amount of hours for hourly workers were compounding costs and concerns for the retailer. "They were saying, 'How are we going to run the three stores we have, let alone build two more?' " Evans said. "The optics of this are horrible; they are not going to build the stores east of the river, in largely African American neighborhoods? That's horrible; you can't do that," Evans said. "A deal's a deal." Was raising the minimum wage part of the deal? It was immediately clear that Walmart's announcement could also reverberate in a city election year. Gray, who is considering an effort to resurrect his political career after prosecutors dropped an investigation into his first mayoral run, said he was outraged. Gray cast blame on Bowser's team, saying he had met with the project's developers two weeks before he left office last year and "everything was on track." "What did the administration do to stay on top of this? There is no bigger project going on than this one, maybe in all of the East End," he said of Skyland. Gray could run this year against Ward 7 Council member Yvette M. Alexander (D) or in an at-large race. But on Friday, he sounded more like a mayoral candidate. "If I were mayor, I'd get on a plane and go to Bentonville," to Walmart's global headquarters in Arkansas, Gray said. "They should be held accountable." Why don't you just sue them? {snicker} Speaking to reporters, Bowser was more muted. She said she was disappointed but stressed that the District's three existing Walmarts were not on the closure list. Although they probably could be if, say, "headwinds" were to somehow get any stronger . . . . Michael Czin, her communications director, said that Walmart had signed a lease at Skyland, but attorneys for the administration and the developer were still analyzing whether either could be entitled to legal recourse. Gee. I wonder if Walmart's attorneys ever considered this angle. "We're assessing options and looking at everything," he said. "We continue to talk to legal counsel. It's still somewhat early; folks are looking into how everything was written." |
| Posted by:gorb |
| #21 That's exactly my point, # 19 Rambler. |
| Posted by: Barbara 2016-01-17 22:17 |
| #20 How bad is the East End to be snubbed by Wal-Mart? |
| Posted by: regular joe 2016-01-17 21:51 |
| #19 Barbara, they would only do it if Obama gave them a grant to cover their startup expenses, plus their usual "markup". |
| Posted by: Rambler in Virginia 2016-01-17 21:31 |
| #18 Point taken Sven. Point taken. |
| Posted by: Besoeker 2016-01-17 20:37 |
| #17 B, that is not how community organizers work. There MO is extortion, not production. |
| Posted by: Sven the pelter 2016-01-17 20:09 |
| #16 "Hey - I've got an idea! Why don't Jesse Jackson, Al Sharpton, the mayor of DC, and the BLM people hold a I've got an idea, too, Rambler. Why don't Jesse Jackson, Al Sharpton, and the mayor of DC open their own business(es) and employ people in the areas Wal-Mart backed out of? At $15.00 an hour. Put your money where your mouths are, jackasses, or STFU. |
| Posted by: Barbara 2016-01-17 19:47 |
| #15 Hey - I've got an idea! Why don't Jesse Jackson, Al Sharpton, the mayor of DC, and the BLM people hold a riot demonstration at each of the three existing stores in DC. I see an episode of Undercover Boss, where they each clerk there for a day. |
| Posted by: swksvolFF 2016-01-17 19:31 |
| #14 When you lose a Walmart it changes the whole town. For the better. Because adding a Walmart makes it worse - it adds a few minimum wage jobs, kills the local stores, and doesn't add anything to the local economy except more traffic at the local Dunkin Donuts. |
| Posted by: KBK 2016-01-17 19:29 |
| #13 So the "local government" was putting 90 million into a project to make development around one store viable. A store that generated, what, 400 minimum wage jobs? 9*10^7 divided by 4*10^2 is $225,000 expended per $24,000 job. Yeah, that works. |
| Posted by: KBK 2016-01-17 19:27 |
| #12 Hey - I've got an idea! Why don't Jesse Jackson, Al Sharpton, the mayor of DC, and the BLM people hold a |
| Posted by: Rambler in Virginia 2016-01-17 17:01 |
| #11 Riot history and black lives matter have killed any chance of protection for their stores. Media will always be against you. Politicians also. look at Deblasio of New York, now there's a piece of work. |
| Posted by: Dale 2016-01-17 16:42 |
| #10 When you lose a Walmart it changes the whole town. We had one that wanted to expand here in Elkin, NC, but some lawyers showed up and blocked it, something about a few Indian graves in the forest behind the store. So they closed the store and the 30 shops around it are now half vacant. They ask nicely, can write a check, but they also walk away, and they will. |
| Posted by: Beau 2016-01-17 14:45 |
| #9 "You chose the wrong friends. This time it will cost you." |
| Posted by: DarthVader 2016-01-17 14:06 |
| #8 At least they won't put the "mom & pop" liquor and lottery ticket" stores on Main Street out of business. |
| Posted by: Capsu 78 2016-01-17 11:40 |
| #7 higher min wages have that dort of effect. ask seatac washington |
| Posted by: Clem Phavick7419 2016-01-17 11:31 |
| #6 Walmart is a co dependent of the GIVERnment; as the EBT cards get loaded Walmart reaps the benefits. this is the real reason the Distict elite cannot understand the decision. Posted by Airandee It's a balancing act. Shrinkage can easily trump co-dependency. |
| Posted by: Besoeker 2016-01-17 11:08 |
| #5 Walmart is a co dependent of the GIVERnment; as the EBT cards get loaded Walmart reaps the benefits. this is the real reason the Distict elite cannot understand the decision. |
| Posted by: Airandee 2016-01-17 10:35 |
| #4 Maybe the black racist CEO of Sam's Club will step in with a few shoot and loot "membership" stores |
| Posted by: Frank G 2016-01-17 10:22 |
| #3 I seem to also remember the deal was (more store$=more community employee$) as a trade for the higher min wage. |
| Posted by: Skidmark 2016-01-17 09:08 |
| #2 Following last week's harsh Rantburg critque, those stores will now be built in Argentina. |
| Posted by: Besoeker 2016-01-17 08:44 |
| #1 Georgia Avenue and at Fort Totten [stores] -- were underperforming Managers and staff will still receive their bonuses. Nearly everything in Washington underperforms. |
| Posted by: Besoeker 2016-01-17 06:55 |