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2007-09-15
Lancaster, MA. Wal-Mart Makes “Rare” Decision To Withdraw

After more than 15 months of bitter controversy, a proposed 187,000 s.f. Wal-Mart supercenter in rural Lancaster, Massachusetts is now dead. Wal-Mart has terminated its purchase and sale agreement for roughly 60 acres of land along Old Union Turnpike. A terse, four paragraph press release from Wal-Mart public affairs was issued through its public relations firm yesterday, announcing that the retailer was withdrawing its plans. "The decision," Wal-Mart said, "is related to Wal-Mart's recently announced plans to moderate growth of U.S. supercenters as part of leveraging capital resources through a strategy designed to improve returns and sales within U.S. stores." Translation: the Lancaster store would have been located 3 miles from another Wal-Mart supercenter in Leominster, Massachusetts, causing both stores to cannibalize each other. A company spokesman denied the decision to abandon the Lancaster plan was related to the construction of another Wal-Mart Supercenter three miles away. "It was not an easy decision to make," the company's regional public affairs manager told the Worcester Telegram, "and a very rare occurrence, but it was a business decision made after the annual shareholders meeting that the Lancaster project was not in sync with our overall growth strategy in the Northeast, and nationwide." That means Wal-Mart decided three months ago to ditch the Lancaster Project. Lest other developers in New England get nervous, Wal-Mart added, "We have no other plans to withdraw any other stores in the Northeast." The site Wal-Mart wanted in Lancaster has been used for at least 15 years as a golf center, and had extensive wetlands on the property which fed into a state-owned pond surrounded by residential homes. Citizens in the northern part of Lancaster organized into a group called Our Lancaster First, and working with Sprawl-Busters, met every 14 days in neighbors' homes to plot strategy against the world's largest retailer. Local Planning and Conservation boards gave Wal-Mart everything they asked for. The town was promised $500,000 by Wal-Mart as a deal-sweetener. But residents fought with town officials over the lack of a Concept Plan for the project, the inappropriate placement of a shopping center in an industrial zone, and the classification of a pond as an unprotected wetland area. Our Lancaster First got town selectmen to ask Wal-Mart to ban overnight hours, but the company refused to abide by a curfew. Our Lancaster First hired a wetland scientist and a civil engineer to challenge the impacts of this huge project. This site has no sewer infrastructure, forcing Wal-Mart to propose its own sewage treatment plan. According to Our Lancaster First's engineer, the stormwater flow after construction would increase significantly, creating an environmental risk to the southern wetlands on the site, and White Pond. Although Wal-Mart continued with its local reviews right up to the sudden withdrawal of the project, the company had not submitted paperwork to the state for more than a year. Their environmental notification form to the state was never followed by the required Environmental Impact Report. Lancaster's Town Administrator told the Telegram, "As time went on we were skeptical, not the pressure on Leominster, or anything political, but you can see that economic factors drove this decision. Profitability and their stock prices were down, and their growth strategy was very aggressive. Although they spent a lot on the permitting process, the real costs would have gone into the construction of the store." Although the Lancaster project is now history, Wal-Mart has gained a foothold in the same trade area through its Leominster store -- which was stopped by a citizen group lawsuit -- but survived as part of a pre-trial settlement in which the retailer agreed to reduce its store size and eliminate overnight hours. "We enjoyed great support from the Lancaster community," Wal-Mart said, "and it was tough making phone calls to these folks. But the silver lining is that there is a store three miles away that will serve customers from Leominster and Lancaster."

What you can do: There is no silver lining for Wal-Mart shareholders from this precipitous withdrawal. Wal-Mart spent hundreds of thousands of dollars working on this project for the past two or more years. Shareholders might well ask why the company persisted long after they knew two superstores 3 miles apart made no sense. The company told Lancaster officials that there were other locations in the country where superstores were located within a stone's throw, but the fact remains, it was a bad business decision to throw corporate money down a sinkhole for months. The company knew it faced litigation, which would have thrown the production schedule off by six months to a year, or longer. The site itself had no infrastructure, and no real prospect of getting water and sewer lines from the city of Leominster. In the process of fighting this store, Our Lancaster First kept applying an increasing amount of public pressure, and one of its members even was elected Selectman last spring. Wal-Mart downplayed the significance of this retreat -- but the fact is, the company has had to withdraw a number of its projects this year, and the move is no longer "a very rare occurrence." Our Lancaster First is holding a victory party next week, and planning its next move to prevent some other big box from squatting on the 130 acre parcel on Old Union Turnpike.










 
 
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