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2009-01-03
Palm Coast, FL. City Offers Wal-Mart $10 Million Subsidy

It's hard to believe that a company with nearly $13 billion in profits last year can convince city officials they need financial help -- but that's the welfare deal that Wal-Mart has lined up in the city of Palm Coast, Florida, Palm Coast already has a Wal-Mart supercenter on Cypress Point Parkway. There's another supercenter 20 miles away in St. Augustine, and 23 miles away in Ormond Beach. For a community with roughly 71,400 people, the area has enough supercenters already. But Sprawl-Busters received an email this week from an unhappy resident in Palm Coast. "The city of Palm Coast in Flagler County," the email began, "is pushing for a Super Wal-Mart to buy the land and build just west of I-95l, by the just-inaugurated Town Center shopping mall, by providing $10 million in savings from our water company, to supply the infrastructure needed in Old Kings Road, North of Rte 100, including widening and landscaping. Meanwhile the City is planning and well into a desalinization plan project for which over $800,000 has been spent already for the initial studies with a New York contractor. This desalination plant will severely affect our coastal and intracoastal marine life, as well as the cost of a gallon of drinkable water." The Daytona Beach News Journal has reported that Wal-Mart has spent $7.4 million to buy 21 acres of land from the Diocese of Orlando at the site of the old Father Lopez Catholic High School. Wal-Mart paid around $350,000 an acre -- a high price for the area. The newspaper says that Wal-Mart has had a contract on the land for at least three years. Wal-Mart told the News Journal that construction of the supercenter was only awaiting the land deal to finalize. The old high school has already been demolished. Wal-Mart has flooded this area with stores. There is a supercenter in Daytona Beach, one in DeLand, Deltona, Orange City, Ormond Beach, Port Orange, and Palm Coast. Wal-Mart has proposed a supercenter for New Smyrna Beach, which will replace its existing discount store there. The city of Palm Coast created a community redevelopment area along Old Kings Road between State Road 100 and Palm Coast Parkway that includes major roadway improvements and construction of a new Wal_Mart store. But in December, the newspaper reported that the city was having trouble selling bonds to finance the project because of "disarray in the credit markets." "Because of the credit market (and) the economy, we went out to the market and our advisers indicated there was no way we would be able to issue bonds," the city manager told the News Journal. The city now plans to use $10 million in utility funds that were earmarked for work along that part of Old Kings Road. The city will use the utility funds and property owners will pay the interest on those funds. "As soon as we can go to the bond market, we will do that and then reimburse the utility fund as well as the developers," the city manager explained. The only thing that stands in the way of this $10 million in corporate welfare, is the City Council, which will have to formally approve use of the utility funds for this project. "One of the reasons why this is critical to us is it's actually an economic development initiative," the city manager told the newspaper. "Wal-Mart has indicated if this is built, they will build a second store in this area." The city's excitement about the project is based on the notion that Wal-Mart, a low-wage retailer, will provide much-needed jobs for the city, and serve as an economic development tool. "This will be, in my opinion, a very attractive area for future commercial development," the city manager said. "I think this will move the project forward as quickly as possible in today's world. Infrastructure projects are critical in kick-starting the economy. They put people to work immediately and they also provide the necessary facilities and amenities for private developers." One of the city councilors, when he learned of the $10 million subsidy for Wal-Mart, told the News Journal, "I think this is a really innovative approach to something. It is clearly making lemonade out of lemons."

What you can do: Palm Coast Mayor Jon Netts says the Wal-Mart supercenter subsidy will give the city something to show for its investment, as opposed to the federal bail out of Wall Street. "What I particularly like about this is at the end of the day you'll have something to show for this. Unlike bailout money where the benefits are perhaps a little bit more removed from reality." But Wal-Mart or Wall Street -- both plans are a public bailout, and in Wal-Mart's case, the company's financials are strong enough to manage this project without asking for taxpayer welfare. Wal-Mart was one of only two companies (the other being McDonald's) in the 30-stock Dow Jones Industrial Average whose stock rose over the past year. Palm Coast is providing Wal-Mart with a bailout at taxpayer's expense. The superstore is not really needed in the first place, and adds no value economically to an area already swimming with Wal-Marts. Readers are urged to email Mayor Netts at http://www.ci.palm-coast.fl.us/Government/City_Officials/Default.aspx?district=mayor with the following message: "Dear Mayor Netts, Your city's Strategic Plan boasts that Palm Coast has 'a hometown feeling,' and the community 'respects and protects the natural environment.'You say you have a 'strong local economy' with a 'vibrant downtown.' To illustrate the hometown feeling, your Plan says the city seeks "development in scale and integrated with the natural environment.' You are encouraging the Town Center to be 'Palm Coast's destination and community focal point,' that is 'walkable, pedestrian friendly with mixed-use buildings.' You claim that 'small businesses are the backbone of the local economy,' yet you are promoting a 'regional retail center with major national retail businesses.' This is a schizophrenic vision, because national retail chain stores largely survive by transferring sales from the 'backbone' businesses of your local economy. If you are chasing national retailers like Wal-Mart, and offering them millions in tax-subsidized infrastructure ($10 million in utility funds), you are not only forcing taxpayers who don't want Wal-Mart to subsidize the retailer, but you are also abandoning your small businesses -- who don't get such tax breaks. If Wal-Mart wants to build another superstore in Palm Coast, let them do it with their own financing, not with welfare. This deal is no different than a Wall Street bailout. In this case though, the company is doing well financially -- so a bailout if even more absurd."










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

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