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2009-03-04
Chicago, IL. Political Winds Still Blowing Against Wal-Mart

In Chicago, Illinois, Wal-Mart doesn't need a weatherman to know which way the winds blow. On February 6, 2009, Sprawl-Busters reported that Wal-Mart wanted to increase its one-store presence in the windy city. But stiff political winds are likely to continue to blow the company off course. In May of 2008, Wal-Mart decided to abandon efforts to locate a store on the South Side of Chicago. The corporation said it was "turning its attention to a backup plan of opening stores just outside city limits." Chicago Mayor Richard Daley had reportedly advised Wal-Mart that he didn't want controversial headlines about big box battles in his city while his Administration pursues an effort to host the 2016 Olympics in Chicago. That decision won't be made by the Olympic Committee until the fall of 2009. If true, that put a strangle hold on any Wal-Mart projects in the short-term. In March of 2008, city officials denied Wal-Mart's request to build a 150,000 s.f. store in the huge Chatham Market project, which spreads out over 50 acres on the site of a former steel plant, with a total of 418,000 s.f. of retail space. Chicago's Planning Commissioner notified Archon, an Irving, Texas-based developer that Wal-Mart would not be allowed to open at Chatham Market as proposed. Despite this history, rumors about Wal-Mart's renewed interest in Chicago began surfacing again last month. After losing its battle at the Chatham site, Archon, which is owned by the Goldman Sachs Group, put Wal-Mart's piece of the southside property up for sale, hunting for a new, and less-controversial anchor. In Chicago, the issue was not over zoning, but over wages. The Chicago City Council passed a "living wage" ordinance, but on September 19, 2006, Mayor Daley vetoed the legislation, which would have forced large corporations to pay a "living wage" to its workers. The City Council voted 31-to-18 to override his veto, coming just 3 votes short of the necessary two-thirds needed to override. The ordinance would have set minimum pay and benefit levels for any major retailer with a store 90,000 s.f. or larger. Wal-Mart issued a press release just after the vote which said: "We will open our first store in the city on Chicago's west side later this month. This store will show what a great asset Wal-Mart can be to the community, as an employer and corporate citizen, and as an affordable resource for thousands of Chicago's working families." It never worked out that way. Wal-Mart had hoped to open 20 stores in the city. Thus far they have opened only one 142,000 s.f. discount store on the west side of the city -- and only after a very contentious political debate. The battle goes back to August of 2004, when Wal-Mart pulled out of its effort to build a store on the south side of Chicago. The company cited its concern over the living wage bill as the issue. "It's not about a living-wage issue," a Wal-Mart spokesman said at the time. "It's about an ordinance that singles out just some -- not all -- businesses in Chicago. We wanted to defer the discussion until we got a better sense of how this big-box thing was going. We're just not comfortable committing considerable capital investment to a site when we don't know if we're going to be able to operate in Chicago. The developer, rather than extending our contract, decided to go ahead with the [zoning] vote. It's not our call. The project is going ahead without us." But Wal-Mart never gave up on its south side dreams. In February, 2009, the Chicago media ran stories that said Wal-Mart was preparing a 'new push' for as many as 5 new stores in Chicago. Chicago Alderman Howard Brookins, who has long supported a Wal-Mart in his ward, said the retailer wants to build its next store in his district, the 21st Ward on Chicago's South Side. Two other potential stores would also be located in the 20th and 34th wards, which are also on the South Side. But this week, according to Crain's Chicago Business, most Chicago Aldermen remain opposed to Wal-Mart, and Mayor Daley has asked Brookins to hold off on pushing a new store. Crain's quoted one Alderman as saying Wal-Mart "would be welcome to come to Chicago if they gave their workers the right, if they so desire, to organize. We are simply asking them for that level of fairness." Crain's says that Alderman Brookins has drafted legislation that would take away power to approve the store from the city's Community Development Commission, and give to the City Council, but the Mayor has told Brookins he needs to have enough votes to overcome a Mayoral veto -- which Brookins is not likely to have. That's because over time, at least half a dozen of the Aldermen who supported Wal-Mart in 2006 have losted their seats. "I can't imagine with the sensitivity around the Olympics proposal that this is a debate that some within the administration and City Hall would want to have," Jerry Morrison, executive director of the Service Employees International Union's Illinois council, told Crain's. But Wal-Mart continues to push its voodoo economics claim that big box retail stores will help the city financially by generating sales taxes. Unfortunately, what the company fails to reveal is that most of that sales tax comes from replacing existing merchants who are generating that same sales tax now -- and paying their people a better wage. A Wal-Mart spokesman downplayed the company's involvement in the backroom dealing over their future in Chicago. "We are evaluating all projects on a case-by-case basis," Wal-Mart said in written statement, "and balancing the city's current political and economic climate as we work to bring new locations to our Chicagoland customers." But a big wind threatens to blow their plans right out of Chicagoland.

What you can do: Once Wal-Mart realized their dreams of conquering the Chicago market were on hold, the company decided it would continue to place stores just outside the urban area. But the company lost a battle in Tinley Park, only 21 miles from downtown Chicago, and lost another location in St. Charles, Illinois, one hour west of the city. In addition to the Wal-Mart discount store on W. North Avenue in Chicago, the company has another 11 stores within 20 miles of Chicago, in Forest Park, Bedford Park, Niles (2), Evergreen Park, Hodgkins, Northlake, Bridgeview, Villa Park, Crestwood, and Mount Prospect. But none of these stores are supercenters, the company's more profitable model. The retailer has targeted the communities of Calumet Park, Cicero and McCook. Its failed project in Tinley Park was a superstore. Lee Scott, Wal-Mart's recently-departed CEO, announced in April, 2006 in Chicago, that Wal-Mart "has never been afraid to invest in communities that are overlooked by other retailers." But the company's efforts in cities like Los Angeles, Boston and New York have gone nowhere. "We are a store that wants to come in and invest in that community," a Wal-Mart public affairs spokesperson told The Chicago Tribune last spring. But it will be difficult for Wal-Mart to break into the South Side, even though some politicians falsely believe such projects are job generators. Readers are urged to email Alderman Howard Brookins at: info@aldermanhowardbrookinsjr.com with the following message: "Dear Alderman Brookins, I think you've got the right vision for the 21st ward -- but the wrong focus. You correctly say that the goal should be 'new development [and] the creation of employment opportunities." But then you promote projects like a Wal-Mart supercenter -- which does neither. A Wal-Mart on the South Side -- or any side -- of Chicago does not create "new" jobs. It represents old jobs in new aprons. It's a form of transferred sales -- since most of its sales will come from existing merchants in your ward. I know you have talked to many businessmen in your ward. They will tell you off the record that inviting Wal-Mart to the South Side is like inviting the cannibals to dinner. This is the company that had to vigorously deny reports that it was counseling its workers to vote against Barack Obama. This is the company that recently had to settle hundreds of wage and hour lawsuits brought by its own workers. Is this 'new' development and employment opportunity? How symbolic is it that Wal-Mart wanted to build at the Chatham Market, the site of an old steel plant? Wal-Mart adds no economic value to Chicago -- because they make nothing, and what they sell others already carry. This is not the proud vision of a workforce in the 21st ward laboring at good wages, with good benefits. I urge you to focus on added value, on developing community-based economic development, and not chasing after national chain stores. The 21st ward does not need that kind of 'new development.'"










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

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