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2008-11-20
Mankato, MN. Wal-Mart Delays Grocery Distribution Center Despite Public Welfare

The city of Mankato, Minnesota, population roughly 36,000 people, already has one Wal-Mart superstore on Madison Avenue. One store for a community this size is certainly adequate. But the giant retailer also wants to build a huge grocery distribution center in this community that will change the entire nature of the city. If it ever opens, a semi truck will be coming or leaving the distribution center every two minutes, 24 hours a day, every day of the year. The trucking warehouse will be built on a 150-acre parcel north of Highway 14. The total project cost was estimated to be in the $60 million to $100 million range. Mankato's name comes from the Dakota word meaning greenish blue earth, and the city lies along the banks of the Blue Earth River. The city's "Vision and Values" statement says its goal is "leading the way as a prosperous diverse regional community." The city describes itself as a major regional center "that has been designated as the 14th Most Livable Micropolitan City in the Nation." The trade area has a surrounding population of 46,173, and 1.6 million people who live within 60 miles of Mankato. But the area also has 6 Wal-Marts within 40 miles -- so there is no large trade area when it comes to shopping for Chinese imports. The City of Mankato boasts of its "great parks and trails..natural prairies and forested areas." Mankatoans are filling up those areas with big box stores, and city officials are walking a dangerous path that could endanger what they call "the peace of mind and quality of life often associated with smaller towns." This week, the Mankato Free Press reports that Wal-Mart has delayed plans to construct a distribution center -- with the ostensible excuse that a tough retail environment is slowing down their plans. The company hasn't delayed the distribution center -- only its update to the city. The huge facility was supposed to begin construction early in 2009, and be completed by the end of 2010. Mankato's City told the media that Wal-Mart was slated to update the city on October 31st, but delayed the update until the end of November, based on "some new information" that was not disclosed. The City Manager insisted that the distribution center is still a live project. But there are residents in Mankato who would rather protect their small town quality of life than turn their city into a Wal-Mart truck stop.

What you can do: This distribution center was first announced three years ago this month. It was supposed to be open by now. "I expect people will speculate that they will not build because of these hard economic times," the City Manager told the Mankato Free Press. But the retailer has already invested millions into the site, including nearly $6 million in utility and road work that was paid for by the county, and is owed by Wal-Mart. The company also has to pay the city for property taxes on the building beginning in 2010 -- regardless of whether or not it is built. The city was thrilled that it did not have to provide incentives to attract Wal-Mart -- but taxpayers are supporting the project. The city and Blue Earth County will dedicate some of the property taxes collected from the project to pay for improvements to highways and to extend sewer, water and other infrastructure. Roughly $5.3 million in site improvements will be done, including extending a road and relocating a gas pipeline. Blue Earth County will widen a road from 3 to 4 lanes for about two-thirds of a mile, right to the site of the distribution center. But the welfare does not end there. State taxpayers are tossing in another $2 million in an infrastructure grant to cover some of the costs with the additional costs coming from property taxes paid by Wal-Mart. County and city officials said this distribution center would create 500 new jobs, and stimulate spin-off businesses. One city councilor told the Free Press, "I'm excited about those support businesses that move in to support a distribution center of this size." No one is concerned about the impact this grocery warehouse will have on existing grocery stores in the five state area that will be served by the facility. In fact, these distribution centers create little new net growth, because Wal-Mart grocery sales largely come from existing grocery stores. Readers are urged to email Mankato Mayor John Brady at jbrady@city.mankato.mn.us with the following message: "Dear Mayor Brady, Do you believe that the Wal-Mart distribution center will open up before the end of your term as Mayor on December 31, 2010? Let's hope not. This enormous trucking warehouse will dramatically change the 'small town character' that your community cherishes. Most residents will be horrified to watch 262,800 truck trips per year running in and out of this facility. So much for being a "livable community." Other than the jobs inside the warehouse, the impact on the rest of Minnesota and four other states will be to help Wal-Mart put existing grocery stores out of business. There will be little or no net job gains in the grocery industry as a result of all this activity. Worst of all, county and state taxpayers are providing corporate welfare to the richest retailer in the world. Wal-Mart had more than $13.7 billion in profits last year -- yet they can't afford to build the roads, water and sewer lines for this facility? These millions of dollars in public subsidies to the Walton's company gives them yet another unfair advantage over smaller companies who are selling groceries without any subsidy from the county or state. Wal-Mart has the financial resources to stand on its own feet. Every taxpayer in Minnesota should be concerned about the wasteful use of limited tax dollars in Mankato to help a retailer create larger market share for its stockholders. Mankato will become known as "the Wal-Mart truck warehouse exit," and the city that paved Wal-Mart's way with tax dollars. This amounts to little more than a financial bail out for a giant corporation that could have paid its own way."












 
 
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