Local Wal-Mart Update

New York Times
February 10, 2005

Foes Dig In As Wal-Mart Aims for City

”Wal-Mart is eager to make New York City its next frontier,” said the company’s eastern region spokeswoman, but many New Yorkers seem ready to welcome Wal-Mart as enthusiastically as a frontier town welcomes a desperado.

Small businesses, union leaders, City Council members and even some mayoral candidates are gearing up to prevent Wal-Mart from setting foot in town, now that the world’s largest retailer has acknowledged it wants to open its first New York City store, planned for Rego Park, Queens, in 2008.

Vornado Realty Trust, the developer whose proposed shopping complex would include a 132,000-square-foot Wal-Mart, has filed a land-use application with the city, and the approval process is expected to take seven months. But Wal-Mart’s opponents plan to pressure every government body that will consider the application — the community board, the City Planning Commission and the City Council — to reject it.

The fight seems likely to become the biggest battle against a single store in the city’s history, because the labor movement sees Wal-Mart as Public Enemy No. 1 since it is so anti-union, and because many small businesses fear that tens of thousands of Wal-Mart- loving consumers will flock to the store, taking millions of dollars in business with them.

”There will never be a more diverse and comprehensive coalition than this effort against Wal-Mart,” said Richard Lipsky, spokesman for the Neighborhood Retail Alliance, an anti-Wal-Mart coalition in New York. ”It will include small-business people, labor people, environmental groups, women’s groups, immigrant groups and community groups.”

One factor that will make the fight unusually intense is that labor has decided that frustrating Wal-Mart’s New York ambitions is pivotal to its new, nationwide campaign to pressure the company to improve the way it pays and treats its workers.

”Wal-Mart has come to represent the lowest common denominator in the treatment of working people,” said Brian M. McLaughlin, president of the New York City Central Labor Council, the umbrella group of more than one million union members. ”Wal-Mart didn’t build its empire on bargains. They built it on the backs of working people here and abroad.”

Wal-Mart — which says it is looking at more sites in New York — has faced opposition elsewhere, most notably in Chicago and Inglewood, a Los Angeles suburb. Last May, the Chicago City Council voted to allow a Wal-Mart on the city’s West Side, but blocked one proposed for the South Side, while in Inglewood voters rejected a Wal-Mart, 60 percent to 40 percent, in a referendum last April.

Nonetheless, company officials seem surprised by the hostility they have encountered here, especially because the city has more than a dozen big-box discount stores.

”I hope we’ll be given a fair chance,” said the Wal- Mart spokeswoman, Mia Masten, corporate affairs director for the eastern region. ”We are interested in New York City. With the population there, it would be a wonderful opportunity for us in terms of reaching a customer base we haven’t reached yet.”

In all this early skirmishing, one not inconsequential group seems largely forgotten: New York’s consumers. Many of them love Wal-Mart’s low prices.

”I like Wal-Mart,” said Sheila Richardson, a correction officer who lives in Corona, Queens, and was shopping last week at the Sears mall across 62nd Drive from the planned Wal-Mart site, which would be a block from the intersection of Queens Boulevard and the Long Island Expressway.

”I’m a shopaholic,” she said, ”and once a week I drive to Wal-Mart in Hempstead or Westbury and even where I grew up, in Albany. It would be good to have a Wal-Mart nearby.”

Danielle Sweetman, a receptionist for Catholic Charities, agreed, saying a Wal-Mart in Queens would spare her the 40-minute drive to the Wal-Mart in Hempstead. ”I’m looking forward to Wal-Mart coming,” she said. ”It has better bargains, and I can get almost anything there.”

Steven Malanga, a senior fellow with the Manhattan Institute, a conservative research organization, said Wal-Mart’s opponents unfairly want to deprive consumers of greater choices. ”The nature of the debate is whether New York gets to have the broadest shopping opportunities that exist elsewhere,” he said. ”Mark Green always did studies showing that stores in New York were ripping off the poor, and then the City Council tries stopping big-box stores. So why do people get ripped off? Because we’re restricting competition.” Mr. Green was the city’s public advocate.

The store is already becoming an issue in this year’s mayoral campaign. Two Democratic candidates, Anthony D. Weiner, the congressman who represents Rego Park, and Gifford Miller, the Council’s speaker, have voiced opposition to the Wal-Mart store. Mr. Weiner said recently that ”Wal-Mart has blazed a path of economic and social destruction in towns throughout the U.S.”

Mayor Michael R. Bloomberg, a Republican, appeared to support the Wal-Mart project in his initial comments on the plan, but now mayoral aides say it is by no means a given that he will support it.

”You can’t sit there and just say these big stores should not be allowed to be built in this city,” he told reporters recently, voicing concern that the city was losing shoppers, jobs and sales tax revenues to big stores in the suburbs.

Wal-Mart executives say they have not signed an official deal with Vornado, and some city officials say that if the heat grows too intense, Wal-Mart may walk away from the project or Vornado may ask it to drop out, hoping to find another tenant that provokes less opposition. Vornado declined to comment.

Officials in the city’s planning department are doing an initial review of Vornado’s application to see whether all the necessary papers, including a preliminary environmental impact filing, have been submitted. Vornado’s application calls for a three- story shopping complex, two 25-story apartment towers and 1,400 parking spaces. The Wal-Mart store, occupying the first floor, would not include a supermarket.

Various approvals, including changes to a previous land-use plan for the site, are needed, planning officials explained, because of the height, the residential use and the expiration of approvals from 1986 for a mall at the site.

Once all the papers are filed, Rego Park’s community board is to hold a hearing and submit a recommendation to the planning commission. The Queens borough president can also hold a hearing and make recommendations. After the borough president weighs in, the City Planning Commission must hold a hearing and has 60 days to approve, modify or reject the application. If the commission approves it, the Vornado application goes to the City Council’s zoning and franchise subcommittee, then to its land-use committee and then to the whole Council.

The community board and the planning commission are supposed to consider 20 land-use issues, including effects on traffic, air quality and neighboring shopping districts. They are not supposed to consider whether Wal-Mart is antiunion, but the Council’s politicians are expected to be mindful of such arguments.

For the community board and city planners, one fear is that Wal-Mart’s presence could badly undercut one of the borough’s best-known shopping districts, Austin Street in Forest Hills, one mile away.

Lenny Karp, whose family has run Austin Shoes since 1942, voiced fears that Wal-Mart’s low prices, high volume and huge name would drive many storeowners under. ”I’m a small retailer. How can I compete with them?” he said. ”They can devastate a community. We’ve seen that happen elsewhere. The small-business owner is no match for them.”

A customer interrupted to say Mr. Karp’s customers would remain loyal, but Mr. Karp said new
comers to the neighborhood might never even visit his store because they might go right to Wal-Mart. ”Right now, I work seven days a week now to support my family,” he said. ”I just don’t think it’s fair if they come.”

Sung Soo Kim, president of the city’s Small Business Congress, with 130,000 members, said: ”There’s a myth that local businesses can be competitive with megastores. Those megastores are category-killing. They cannibalize existing retail merchants.”

Perhaps the strongest opposition to Wal-Mart will come from organized labor, which has told City Council members that Wal-Mart pays low wages, provides health insurance to fewer than half its workers, is vehemently antiunion and faces a huge sex-discrimination lawsuit.

Wal-Mart’s Ms. Masten said the new store would create over 300 jobs. She said Wal-Mart stores in cities paid $10.38 an hour on average; union officials put the figure around $9.25. She said Wal-Mart offers profit- sharing, a 401(k) plan and affordable health benefits, starting at $40 a month for individual coverage and $155 a month for family coverage.

Noting that Wal-Mart employs 1.2 million Americans, she said, ”People wouldn’t stay with a company that wasn’t providing opportunities and competitive wages and benefits.”

Helen Sears, the council member who represents Rego Park, said she had cautioned Wal-Mart officials about their labor practices.

”I’ve said to them, they are the biggest daddy of all, and if they want to do big things, if they want to do work in our Big Apple, their policies absolutely need to be reviewed,” she said. ”They have to put something in place that’s a little different from what they have now.”