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2005-01-08
Decorah, IA. Wal-Mart Hassles City Over Lease For Dead Store

The story of how Wal-Mart got into Decorah, Iowa in the floodplain of the Upper Iowa River is a long, and ugly tale. A strong citizen opposition to the superstore delayed consideration for several years, and the Iowa courts ruled in favor of a citizen lawsuit that said the retailer had illegally built in a floodplain -- but the court would not rule the building should be torn down. Wal-Mart got their superstore built, and now this beautiful little community that once took out an ad in USA Today to protest Wal-Mart's plan, has to deal with disposing of the "old" store that Wal-Mart left behind. Wal-Mart had an original store lease that ran another 7 years, until 2012. The building is owned by some investors calling themselves "Decorah Associates." The city negotiated with Wal-Mart over the lease for their dead store, and in August of 2003, finalized a settlement. Under the agreement, the city would take over Wal-Mart's lease for $1 per year after the Wal-Mart supercenter has been opened for one year. The supercenter began operations on January 28, 2004, so the city's option is coming up in a few weeks. The city has 45 days once the lease becomes open to exercise its option. So the store sat empty for one year while Wal-Mart built up its superstore business. But there's a catch. Wal-Mart is saying that the city cannot sublet the space to any tenant that would compete with Wal-Mart's supercenter. In fact, Wal-Mart's standard letter of intent for companies interested in Wal-Mart's hundreds of "dark stores" prohibits the new tenant or owner from opening discount stores or membership clubs in the empty space. Wal-Mart tells the media that they are willing to lease to competitors like Target or Kohl's, but Decorah officials found out the truth. "It certainly seems to me Wal-Mart, in good faith, should say they will overlook that piece of the covenant if they truly want to help the community," one Decorah city councilor was quoted as saying in the Waterloo/Cedar Falls Courier. But Councilman Steve Matter was more blunt. "Wal-Mart's trying to make fools out of us. They're trying to make this complicated." The empty Wal-Mart building costs $9,000 a month just for utilities, and city officials don't want to get stuck paying for those costs. "We don't want to be in a situation too many cities are in," said Councilman Jerry Aulwes, making reference to the hundreds of empty Wal-Mart discount stores.

What you can do: The City Council in Decorah has betrayed the public trust of their taxpayers twice. Once when they let Wal-Mart build its superstore in a floodplain on the banks of a scenic river, and twice when they failed to read the fine print in the Wal-Mart lease settlement. Now they want Wal-Mart to "overlook" part of the agreement the Council signed its name to. Wal-Mart is not trying to make the Council look foolish -- they've already done that several times over themselves. The Wal-Mart supercenter should never have been approved. The city already had a Wal-Mart discount store, and the location for the new store was just horrendous. The Council now is dealing with the aftermath of a bad decision, and Wal-Mart's covenanats on the lease just reaffirm the opinion that Wal-Mart likes the free market when it works for them, but has no problem trying to stifle competition when that works better. In the meantime, the empty Wal-Mart store is about to celebrate its first year of vacancy. Wal-Mart consistently carries about 350 to 400 such "dark stores", equal to roughly 26 million square feet of dead stores. This makes Wal-Mart the King of Dead Air. Ironically, Decorah will have more empty buildings to fill if any of the existing grocery stores has to close because of the new supercenter.










 
 
"Norman has become the guru of the anti-Wal-Mart movement" ~ 60 Minutes

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