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2009-09-17
Ellsworth, ME. New Superstore Opens, Old Wal-Mart Shuts Down

Wal-Mart has hired a private real estate broker to sell its empty store at 461 High Street in Ellsworth, Maine. You can buy the 94,160 s.f. store for $3.85 million. It's hardly been used, built in 1994, and sitting on nearly 19 acres of land. Wal-Mart wants a 100% down-payment on the store, but the retailer claims that "this relocating Wal-Mart is located on the desirable retail corridor of Route 3. The property is centrally located and suitable for multi-tenant redevelopment or a single end-user with expansion area to the north and south of the building." This Ellsworth store is up for sale because this week Wal-Mart opened a new superstore at nearby "Acadia Crossing," which has other big box stores like Home Depot and a nearby Lowes. Less than a mile away are three other merchants who will no doubt feel the economic pinch now that this new Wal-Martd superstore is open: Hannaford and Shaw's grocery store, and Walgreens. All these chain stores are fighting over a demographic projected for 2012 of only 30,210 people within a 15 mile radius. There are only 41 people per square mile in this location -- hardly enough households to write home about. The Ellsworth "dark store" is now one of three such properties Wal-Mart has left behind in Maine, the others being in Sanford and Scarborough. The real estate broker says Ellsworth "has evolved into a major commercial retail center benefiting from its close proximity to Downeast Maine... the primary trade area's population is over 60,000 with population tripling in summer months as the town becomes a major tourism hub." Sprawl-Busters reported on June 30, 2000 that Wal-Mart wanted to be the Main retailer in Maine, and had launched a multi-town assault on vacationland. In Ellsworth, Maine, Wal-Mart sent a letter to the Planning Board saying they were looking to locate on a parcel along Route 3 to build a 185,000 s.f. supercenter, which would be just about the size of 4 footballs fields. The land was owned by a city councilor in Ellsworth, and was slated to be a business park. The parcel was accessed through a 2 lane road. The chairman of the Planning Board wanted to know what Wal-Mart would do with its current 94,000 s.f. Wal-Mart store in Ellsworth, also on Route 3. The Planning Board Chairman at the time, John Fink, told the Bangor Daily News that when he is near the Wal-Mart Supercenter in Augusta, "he tries not to look at it..." Wal-Mart was granted a permit to build a supercenter in Ellsworth in February, 2001, but the store was never built. Their permit had to be exercised within one year. As the deadline approached, no activity at all was seen at the site. On January 25, 2002, the news broke that Wal-Mart had decided that the mitigating costs required by the Maine Department of Transportation (MDOT) were too great -- at almost $4 million -- and, having failed in their campaign to get MDOT to reduce this, Wal-Mart decided to withdraw. But six years later, on February 20, 2006, residents of Ellsworth learned that Wal-Mart had not given up its efforts to build a superstore on Route 3. A Massachusetts-based developer, S.R. Weiner, applied to put a store at the intersection of Route 3 and Myrick Street. Weiner, who has tangled with town governments all over New England, had apparently opened up discussions with Ellsworth City Manager Stephen Gunty. Weiner wanted to put a Wal-Mart near the existing Home Depot. "They've been consistently keeping their options open," Gunty told the newspaper. "We don't have many specifics. Everything is very preliminary at this point." To help Wal-Mart out, city officials considered adopting a new ordinance that would allow site development fees to be levied on all the businesses benefiting from the development, not just the first developer to initiate a project. The Wal-Mart in Ellsworth would have required significant road improvements not necessary without the project. Residents in Ellsworth formed a citizen's group called "Wise Planning for Ellsworth" (WPE) to take the lead in opposing Weiner's attempts to put a supercenter in Ellsworth. Hearings on "Acadia Crossing" began in 2006. W/S development has a dozen retail centers in Maine from South Portland to Calais, including a 1.3 million-square-foot center in Augusta. Weiner claims to have 70 community shopping centers and three regional malls as part of his portfolio, totaling approximately 13.5 million square feet. In August of 2007, the city of Ellsworth approved the supercenter, which measured in at 198,730 s.f. The retailer has made it clear that the existing Wal-Mart discount store, which is almost the size of two football fields, would close. "This is a planned relocation, so once we open the new store we will close the existing one and either sell or lease the property," a company spokesman told the American. Another 25 stores are planned for Acadia Crossing. A spokesman for W/S Development told the newspaper that signing on additional tenants was like a "domino effect." "The smaller ones usually want to know when the larger ones are going to be open," W/S said. "In a general sense, the economy is slowing down. They're still in the business of doing business. Retailers are still looking for outlets to service their customers." After 10 months of construction, the Ellsworth Wal-Mart opened this week, boasting it will employ as many as 425 full and part time workers. But the 'old' store had 175 workers, so the net change of 250 jobs to Wal-Mart is only 59% of the gross figure. "We've been able to bring on a lot of extra employees," the Wal-Mart manager said yesterday, the day the old store shut down. The grocery section was described as the 'main attraction' of the store, but any new jobs there will surely come from the other grocery chains located nearby, given the fact that the Ellsworth population is modest to begin with, and not growing rapidly. The store also includes a Dunkin' Donuts shop, a pharmacy and a hair salon, so other local merchants will lose sales in those areas. Ellsworth City Manager, Michell Beal appeared to be oblivious to the economics of retail development in her small community. "The biggest thing is that this will create an additional 200 jobs at a time when people can really use a job. And they'll be providing benefits for the majority of those employees," she told the Bangor Daily News. "That's the biggest thing for Ellsworth and the region as well. We've been in a recession for a year... I think that shows a confidence in the area and its ability to support those businesses." The second half of the Acadia Crossing project is not going as well. The marketing director for W/S Development said the recession has slowed down interest in locating near Wal-Mart. "The next phase [of Acadia Crossing], Phase III, is really dependent on tenant interest," the W/S spokesman said. "Right now, we're very excited about the next phase, and we are marketing the space to national and local tenants. We've had some good interest... That's an exceptional location." But he added that fewer retailers are knocking on their door, and fewer developers are opening retail space. But W/S Development brags that it has opened three shopping centers over the past three years -- each one of them adding little new economic value to the local economy, since their 'new' jobs are really old jobs at new addresses.

What you can do: Ellsworth is a community of just over 7,000 people. The existing Wal-Mart discount store on High Street was certainly adequate to meet the needs of shopping in this small community. Ellsworth is now boxed in by most of the national big box logos. The addition of the supercenter really brings no added value economically to Ellsworth. Most of Wal-Marts sales will come from the existing Wal-Mart which will close, and the balance will come from existing grocery stores in Ellsworth. Since 1990, there have only been 1,100 new people move into Ellsworth. That's an average of about 69 new people per year -- hardly enough new market to meet the saturation supply of retailers. Wal-Mart has two other dead stores on the market in Maine -- but the retailer claims that all three empty stores have a "contract pending." The Ellsworth supercenter will be the 16th Wal-Mart superstore in Maine, along with 7 discount stores. All this taking of open space for redundant stores makes no economic sense for Maine residents. All that is happening is a shifting of market share -- mostly within the grocery sector. This swarm of national retailers started to get local residents concerned. In May of 2007, the Ellsworth City Council engaged a team of consultants for the purpose of working with the City staff and the Ellsworth Economic Development Committee to craft a long-term economic development strategy for the community. "The move was prompted primarily by a recent influx of private sector investment that is expected to result in more than 1 million square feet of new retail space in the City's Beckwith Hill area," the report notes. "While the retail growth is expected to add upwards of $80 million in valuation to Ellsworth's tax base and create a number of new employment opportunities, the City's public and private sector leaders recognized the need to establish a strategic approach to economic development as a means of ensuring a healthy diversity in the community's tax and employment base in the years ahead." The study found that commercial zones in the city account for 33% of the city's total property valuation. Almost 28% (1,729 jobs) of Ellsworth's jobs were in the retail sector, and the average weekly wage of $497 for such jobs was significantly below the second largest job sector in Ellsworth, health and social services, which had an average weekly wage of $720. "The Retail Trade sector, the City's largest employment sector, had an average wage of $497, 12% below the Citywide average," the report states. "This could be a significant issue for the community, given the expected increase in retail employment as another one million square feet of retail space comes online." In interviews with local employers, the city was warned: "Growth in retailing could result in the cannibalization of workers from existing businesses... The City needs more cohesive, integrated planning for the Beckwith Hill retail area and downtown Ellsworth. Concern over the potential impacts of over-building." Local employers noted: "City is allowing too much retail -- the size of the retail pie isn't growing fast enough to support all this new growth -- some existing businesses are likely to get hurt. The City could be facing a housing shortage soon, particularly if workers move to the area for jobs in the retail sector. This could necessitate more rental and/or workforce housing. Concern over where the worker will come from to support the new retail development. Finding new employees for existing businesses is 'very difficult'". Readers are urged to email John Phillips, Chairman of the Ellsworth City Council at jphill1453@myfairpoint.net. Leave the following message: "Chairman Phillips, Ellsworth has now flooded the local economy with national retail chain stores, and left the community with Maine's third empty Wal-Mart discount store. Your own Economic Development study from 2007 shows how you have over-built your retail sector, and saturated the area with low wage jobs. It's time for Ellsworth to stop encouraging more super-chains. The city should impose a limit on the amount of new retail acreage for commercial projects, cap the size of retail buildings, and pass a demolition bond in case the city has to tear down some of the empty stores that you are going to be left with. Your retail sector is already cannibalizing itself, and this will ultimately harm your local economy. You are now boxed it, and the problems of rising crime and traffic will consume more and more of your resources. Your City Manager does not seem to grasp how retail development works. This project is not a value-added jobs deal for Ellsworth. Most of the net 250 jobs at Wal-Mart will come from other merchants in Ellsworth that will lose trade. All you have done is squandered 19 acres at the old site, and placed another burden around the neck of existing merchants. This is not economic development, this is economic displacement."










 
 
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