Wal-Mart Woos Entrepreneurs And Minorities
BY DANIELA GERSON – Staff Reporter of the SunJanuary 16, 2006
Wal-Mart, while keeping quiet on when and where it plans to open its first store in New York City, is actively courting local minority business owners, networking with immigrant nonprofit organizations, and hosting supplier workshops.
Many small-business owners have responded enthusiastically to the overtures, a striking contrast to a frequently heard criticism that if the retail giant enters New York it would be detrimental to commerce in the city.
“I’ve been fighting for the small businesses more than almost anyone else out there – I am very sensitive to them. But I also have an allegiance to the members who pay their dues every year,” the president of the New York Statewide Hispanic Chambers of Commerce, Frank Garcia, said. “To those minority businesses, this could really save their business. This could create a lot of jobs in the South Bronx.”
Wal-Mart’s potential contribution to minority suppliers was the message of a seminar co-hosted last month by the company and the Asian American Federation of New York, a local nonprofit. Advertising in trade publications under the headline “Want to Sell to Wal-Mart?” the company promised “one-on-one meetings with Wal-Mart representatives.”
The outpouring of interest overwhelmed organizers. “We got bombarded with calls from people wanting to speak with them,” the group’s donor relations director, Michelle Tung, said. The immigrant advocacy organization is trying to steer clear of the hot-button issue of whether Wal-Mart should enter New York. Instead, she said, it arranged the meeting to help small-business members.
At the meeting, she said, more than 100 people listened raptly as Wal-Mart managers and officers explained what types of products and certification the company looks for. Wal-Mart’s labor practices and effects on competitors, which some criticize, were never questioned. “It was purely business. It was an overwhelming response, and of everyone who attended not one voiced concern,” she said.
The Asian American Federation event was the first “minority supplier workshop” hosted in New York, part of a larger program the company launched about a year ago to reach out to minority businesses, Wal-Mart’s director of corporate affairs for the east region, Mia Masten, said. “We were very encouraged by the enthusiastic response to last month’s event and will have a larger venue, more staff, and more publicity for the next event,” she said via e-mail. Generally, she said, the company is looking to “expand our relationship” with all minority groups, including women and the physically challenged.
While Ms. Masten said the company is looking “very seriously” at New York, focusing on the outer boroughs, she said the outreach to suppliers is not related to the bid. Last year, Wal-Mart spent $11 billion on suppliers from New York City, according to Ms. Masten. She said Wal-Mart currently buys from 36 minority suppliers in the city, and 125 statewide.
Opponents of Wal-Mart at the City Council, which last year successfully overrode a veto by Mayor Bloomberg to pass a health care bill critics said specifically targeted the company, are not impressed by what the company says it can offer minority suppliers.
“Wal-Mart has been trying to conduct seminars for small businesses and some minority-owned businesses, but this is a thinly veiled attempt to lay claim to helping minority and immigrant businesses when the net result will be exactly the opposite,” Council Member John Liu, a Democrat of Queens, said. “The impact of Wal-Mart would be to not only degrade worker conditions in New York City, but would also drive a dagger into the economic engine of New York City, which is small business.”
The president of the Small Business Congress, a federation of 70 trade organizations in New York, Sung Soo Kim, has campaigned vigorously on how Wal-Mart could destroy his members. Wal-Mart, he said, in addition to potentially ruining the unique commercial environment in New York, “created a playing field which we cannot play inside.” With about 15,000 city stores closing their doors in 2004 and an estimated 10,000 entering bankruptcy in 2005, he said, “We declared small business in crises.” Of his members, he said, not one is in favor of Wal-Mart’s coming to New York.
However, the New York Statewide Hispanic Chamber of Commerce is a member organization. Its president, Mr. Garcia, said his perspective on Wal-Mart changed when he traveled with a delegation of national representatives of Hispanic Chambers of Commerce to the company’s headquarters in Arkansas to ask for foundation support. “I was one of the biggest anti-Wal-Mart people until I went to Wal-Mart and saw what they were really all about,” he said.
There, he said, the delegation sat down and voiced their concerns to the new president and CEO of Wal-Mart, Eduardo Castro-Wright. He said the company seemed receptive.
At this point, Mr. Garcia said, “We’re not in favor or against Wal-Mart coming. We want our members to be able to get contracts.”
When Mr. Garcia went to Arkansas, he said he brought with him a letter from the president of Sylvia’s Food Products, Van Woods. For years, Mr. Woods said, he tried to find a way for his 70 products, created in 1994 from recipes for dishes sold at his mother’s restaurant in Harlem, to be sold at Wal-Mart.
“As a businessman I want my products in Wal-Mart,” Mr. Woods said, estimating his $4 million in sales last year would be taken up by a “few more million” if he could sell to the world’s biggest retailer. “I am a small-business man and I’m not threatened by Wal-Mart. The guy who has the paint store, the hardware store might be, but I don’t feel the threat.”
Deadline Looms for Council’s Ruling on Related’s Bronx Mall
BY JILL GARDINER – Staff Reporter of the SunJanuary 12, 2006
The fate of a massive development project in the Bronx proposed by the Related Companies, the real estate giant that built the Time Warner Center at Columbus Circle, is hanging in the balance.
The project, which includes a mega-mall with 1 million square feet of retail space, has already received approval from the City Planning Commission and the local community board. But the project has one more hurdle to clear in the City Council, which must vote by February 8.
“People are just starting to realize that the ULURP clock is running out and we have to take action,” Council Member Joel Rivera said, referring to the land-use application process. “Time is not on our side.”
Mr. Rivera, the council’s majority leader, said negotiations with Related are underway to hash out community concerns, but he said most Bronx council members are likely to back the overall plan. Mr. Rivera is supporting the project, which will replace the dilapidated Bronx Terminal Market, where two dozen merchants and hundreds of employees still sell produce and other goods.
The Gateway Mall, as the project is called, could be the first major litmus test for the newly constituted council. The council just elected a new speaker, Christine Quinn, and its vote will send a signal on where it stands on development and organized labor.
While the Bloomberg administration and the developer are expressing optimism about the plan’s prospects for approval, opponents are slamming the proposal and pressuring council members to reject it. They have criticized it as a “sweetheart deal,” citing connections between the administration and Related and the fact the site was not put out for public bidding.
A lobbyist who represents merchants that would be displaced by the project, Richard Lipsky, disputed the notion the plan has strong council support and said the Bronx delegation is still “very much in play.”
“There is a lot of opposition to the deal and to the prospect of the project being a Trojan horse,” Mr. Lipsky said.
Mr. Lipsky, who also represents unions and small
supermarkets, called on the council to block the project unless Related agrees to bar BJ’s Wholesale Club and Wal-Mart from the mall. He also said the council does not have enough time to properly review the project.
Related has already said it has no plans to bring in Wal-Mart. The council has in the past rejected projects in the final phase of land-use review process because of opposition to stores like BJs and Wal-Mart.
Ms. Quinn has not made public her position on the Gateway Mall. A spokeswoman for her, Maria Alvarado, said via e-mail that the “speaker’s position on the matter will be determined after hearing from all the interested parties during this process.”
Both the city and Related have argued that the development will be a desperately needed shot in the arm to spur economic activity and create jobs in a now blighted section of the borough. They have also pointed out the project has “overwhelming support” from leaders in the borough, including the president of the Bronx, Aldofo Carrion.
David Stearns, a spokesman for the marketing firm representing Related, the Marino Group, said the council generally yields to elected officials that represent the area and noted that land use approvals have nothing to do with the stores that occupy a site.
Last week Council Member Helen Foster told The New York Sun that unless there is a greater effort to find a new space for the existing merchants, who were ordered out by a state Supreme Court judge, there will be “bumps and bruises” in the final land use review.
Complicating matters is that the council does not yet have committees in place following the recent election, so its window for taking up the matter is narrowing. Ms. Quinn and the council’s Rules Committee scheduled to approve committee assignments next week, giving the Land Use Committee three weeks to act.
Related paid already $42 million for the lease, but the city agreed to reimburse the company if the project falls through and has said it would provide millions of dollars in tax breaks. If the council rejects the application, Mayor Bloomberg can veto its action. But most council votes are veto-proof.