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2007-05-03
Birmingham, AL. Wal-Mart Offers City $1 Million “Sweetener”

Wal-Mart has gone from asking for a public handout, to passing money out in Alabama. The Birmingham News reports this week that Wal-Mart has offered $4.6 million for land in the Titusville neighborhood of Birmingham, Alabama, to build a Supercenter -- and part of that price tag is a nice, little deal-sweetener from Wal-Mart. The Jefferson County Economic and Industrial Development Authority's board reviewed a draft agreement with Wal-Mart yesterday, and the group has indicated its initial support for the offer. The Board's Chairman told The News that the project has been contentious, but he thinks it is more popular now than when first proposed. The Authority owns the 27 acres that Wal-Mart wants. The city of Birmingham and Jefferson County bought the land, which was formerly owned by the Trinity steel company, in 2005 for $2.6 million, with the express purpose of developing it. The Authority also has options to buy another 17 acres of land for retail next to the Wal-Mart site. The purchase price is actually $3.6 million for the land, plus $1 million from Wal-Mart for "community revitalization." Wal-Mart has told the city it will spend about $15 million building the store, which the Authority projects will employ 400 people and generate $4.7 million a year in taxes for the city and county. These are obviously gross figures, not counting costs to the city for services to the site, or lost jobs at other businesses. The $1 million offer to the city is quite a change for Wal-Mart. The city of Birmingham gave the retailer $11 million for its store being built at the old Eastwood Mall site. But not everyone is lying down with Wal-Mart. Jefferson County Commissioner Shelia Smoot and Birmingham City Councilman Steven Hoyt, told The News that the Wal-Mart project is a shortsighted use of the land. "Marketing has never been done properly at this site," Smoot told the paper. "There are other offers but they're not here because we haven't marketed." Smoot has suggested that instead of Wal-Mart, the land should be developed as a residential, retail and office complex. She said a development on the Trinity site should be a destination point and capture the money of people traveling through the Interstate 65 corridor. "I'm asking you to look beyond the surface for a change," Smoot told residents at a recent public hearing on the Wal-Mart proposal. "That site is a lot better than you're giving it credit for." Birmingham Mayor Bernard Kincaid has said he supports the project, but Councilman Hoyt said he wants to see more minority involvement throughout the project.

What you can do: Birmingham made a mistake when it subsidized Wal-Mart's operation back in 2003. Now the city is making a second mistake by taking the company's $1 million "sweetener" to let them build the second supercenter. On September 27, 2003, Sprawl-Busters reported that city officials in Birmingham had offered to give Wal-Mart $10 million in corporate welfare by refunding sales taxes to the company as an enticement to build a supercenter locally. Under the deal, the city would give Wal-Mart a 90% refund on the sales tax for roughly the first five years of the store's sales. With sales taxes expected to be around $2.2 million a year, it would take just under 5 years to reach $10 million, at which point, the city would begin to receive the sales tax. This welfare subsidy for Wal-Mart prompted a lawsuit. A local merchant and a city resident filed a lawsuit in September of 2003 to prevent the city for honoring this blatant corporate free lunch. Southeastern Meats of Pelham, Inc, and William Craig charged in Jefferson County Court that Birmingham officials were giving Wal-Mart an unfair advantage over its smaller competitors, of misusing tax dollars, and of unfairly using eminent domain powers to coerce landowners to sell their land to the Wal-Mart development. Southeastern Meats has operated a store near the proposed Wal-Mart site for more than two decades. The company complains that the city never offered them any tax incentives to stay. "Southeastern Meats is standing up for all other small businesses that will be hurt by this new Wal-Mart," the merchant's attorney said. The lawsuit charged that the tax break was just a fancy giveway that would redistribute the tax money already being collected, with money formerly spent at smaller merchants in Birmingham now going to Wal-Mart. "The city's $10 million gift to Wal-Mart cannot be justified on the grounds that it will generate new jobs or additional tax revenue," the suit said. "The city's gift was irrelevant to Wal-Mart's business decision to replace it's Wal-Mart stores with supercenters. The Huffman Wal-Mart would have been replaced with a supercenter regardless of the city's $10 million gift." Shelia Smoot appears to be the only one who realizes all Wal-Mart's figures about jobs and revenues are phony, inflated numbers. Two grocery stores in the area, Food Fair and Food World, closed, but local residents don't seem to make the connection between these closures and Wal-Mart. Let Mayor Bernie Kincaid know that you think a Wal-Mart in the Titusville neighborhood is a big mistake. Call the Mayor at 205-254-2277. Then make a call to Shelia Smoot and tell her to keep up her opposition to the Wal-Mart plan. Call Smoot at 205-325-5074, or email her at: smoots@jccal.org.











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

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