• Better Not Bigger
  
  
• Street Reclaiming
  
  
  

Excerpts:

A large-scale retailer will initially provide a community with a big boost in terms of selection and convenience-- sometimes doubling a small town's total retail space. Developers often present these stores as major additions to the local economy, but in areas with anything less than spectacular population and income growth, the bulk of the new store's sales will be taken directly from existing merchants and ultimately entail numerous small business failures. One study, for instance, examined nine Iowa counties where Wal-Mart had located and found that 84 percent of the megastore's sales were captured from existing businesses within the same county.

Small, locally owned businesses provide economic diversity and stability. A town of 10,000 might support 50 to 60 small merchants, but when a large corporate retailer moves in, the host community as well as several smaller towns in the vicinity often lose their Main Street merchants altogether, leaving many of the region's residents little option but to travel long distances for even the most basic of daily necessities.

This dependency carries risks. While local merchants will do their best to weather economic hard times, absentee owners are far more mobile and will abandon a community if profit margins do not meet their expectations. Such is the case in Warr Acres, a community of 10,000 located about 25 miles from downtown Oklahoma City. In 1992, local officials used public funds to convince Wal-
Mart to open a 120,000 square foot store in their town. The opening led to several failures at existing businesses, including the loss of the local grocery store. Just six years later, Wal-Mart decided to close its doors in favor of opening a 200,000 square foot supercenter closer to Oklahoma City. Warr Acres will lose 8 percent of its tax base.

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Corporate retailers often play neighboring communities off one another to exact the biggest subsidies, a tactic perfected by Wal-Mart in the early days of its expansion and now utilized by many companies that find sales and property tax dependent local governments easy targets. Government support for these retailers delivers a double blow to local businesses. Rarely are public funds made available to local merchants. Subsides instead help fuel the expansion of their biggest competitors.

Corporate retailers and public officials insist that these expenditures are justified as a means of generating new jobs and higher tax revenue. Unlike new manufacturing facilities, however, these gains will invariably be offset by job and tax losses at existing retailers, producing only marginal overall improvement or even a net decline in some cases. Even without additional subsidies, the public cost of development--expanding roads and providing services such as water and sewer--combined with declines in property values and sales taxes in existing retail centers may actually exceed the tax revenue generated by the new retailer.

One study paid for by Wal-Mart concluded that the superstore's proposal to locate in Greenfield, Massachusetts would cost existing businesses $35 million in sales, leading to a net loss of 105,000 square feet of retail space and consequently declines in property tax revenue. The 177 new jobs expected to be gained by the addition of Wal-Mart would be off-set by losses of 148 jobs at other businesses.(4)

Another study, which examined the impact of a proposed Wal-Mart in North Elba, New York, found that $12.3 million, or 68 percent, of the store's projected sales would be captured from local businesses. The 134j obs promised by Wal-Mart would cause 112 job losses elsewhere, leaving the town with a net gain of only 22 jobs.(5)

A detailed study on the effects of a proposed Wal-Mart store in St. Albans, Vermont, concluded that the development would lead to a substantial decline in local government revenue. The study found that 76 percent of the new store's sales would be drawn from existing businesses in the county, leading to a net loss of 110,000 square feet of retail space and 167 jobs over a period of ten years. The failure of these businesses would result in a net decline in real and personal property values of $1.4 million countywide and significant reductions in property and payroll taxes. In rejecting Wal-Mart's plans, the Vermont Environmental Board concluded that for each dollar of public benefits generated by the proposed store there would be 2.5 dollars in public costs. (17)

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The Comprehensive Plan

There are two primary pieces of local land use policy: the comprehensive plan, which is essentially a vision statement containing eneral guidelines for development, and the zoning code, which implements the plan through concrete rules governing land use.

A number of communities have included in their comprehensive plan an intention to preserve and strengthen local businesses, limit commercial development to downtown or other existing retail districts, and restrict the pro-liferation of corporate chain stores.

In the North Beach neighborhood of San Francisco, for instance, "small-scale, neighborhood-serving businesses are strongly encouraged." The Local Comprehensive Plan for Kent County, Maryland, lists among its objectives "support [for] small, locally owned businesses" and "prevent [tion ofl commercial sprawl outside the county's existing traditional commercial centers."

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