Albion, NY The Kind of Analysis Wal-Mart Hates To Read
From big cities like Chicago, to small towns like Galt, California, local officials are so economically illiterate that they think a new retail building going up is synonymous with economic growth. Instead, when Wal-Mart comes to town, all that happens is what the libertarians call the "creative destructionism" of the free market system. That's a polite term for major economic displacement.
The most often-cited reason that local officials give for approving a Wal-Mart is the double promise of jobs and revenues. But in many communities, a closer examination of the numbers does not support Wal-Mart's voodoo economics reality. The latest example comes from the pages of The Batavia Daily News, from columnist Tom Rivers, who took a four year look at what Wal-Mart did economically to several towns in the Albion, New York region.
Sprawl-Busters reported on November 10, 2004 that the Mayor of the Village of Albion, New York was pleading to save his community from the town of Albion's Wal-Mart proposal. Village Mayor Ed Salvatore told officials from the town of the same name, that a Wal-Mart outside the Albion village center would be a disaster for his residents. "I believe it will be the demise of our community," the Mayor pleaded. "The village of Albion will never survive that."
The Mayor said a proposed 155,000 s.f. Wal-Mart supercenter, which needed a rezoning from residential to commercial, would force many stores in the village central business district to close. The former head of the Orleans County Chamber of Commerce told town officials that a department store was needed, but not a supercenter.
The Wal-Mart supercenter opened in Albion on June 14, 2006. The Daily News reported that Wal-Mart had hired 390 employees, but said nothing about the workers who lost their jobs at Ames when that retailer closed several years ago due to business lost to Wal-Mart. The only person at the festivities who seemed to connect the dots about Wal-Mart's impact on the community was George Bower, chair of the Orleans County Legislature.
At the Grand Opening, Bower handed Wal-Mart officials a letter for company CEO Lee Scott, asking the retailer to help the county attract a manufacturing company to Orleans. Bower told the Daily News that he was trying to make up for the 200 industrial jobs lost the month before Wal-Mart opened in nearby Medina, New York, when the Bernz-O-Matic company, which is a brand owned by Newell/Rubbermaid (another company almost destroyed by Wal-Mart), shut down its Medina plant and threw more than 200 local residents out of work.
Bernz-O-Matic makes consumer products like torches and kits. One of their biggest customers is Wal-Mart. Bernz-O-Matic moved its plan to China, ostensibly to be able to produce cheaper torches for Wal-Mart and Home Depot. So Wal-Mart opens its doors with 390 employees (a number which will drop dramatically within months after the store opening) and on the other side of the ledger are the lost jobs at Ames and Bernz-O-Matic.
Add to that the fact that the Wal-Mart supercenter has a grocery store, a garden center, an electronics center, a tire and lube express, a vision center, pharmacy, photo lab, and hair salon -- all of which already exist in abundance in Albion. All of these stores inside the store will take most of their sales from existing merchants in the greater Albion area. Legislator Bower told Wal-Mart that he would love to see products sold in Wal-Mart that say "Made in Orleans County." But Bower's comments were lost.
Now four years later, columnist Tom Rivers is taking the toll of Wal-Mart damage. "I was dubious and I was worried. I knew the store, despite its best efforts and intentions, would cripple many of the small-business owners in Orleans County," Rivers writes. "A mammoth store with probably more shelf space than all of downtown Albion and Medina simply couldn't be absorbed into a shrinking local economy without hurting many other businesses."
According to Rivers, his look back at the last four years shows "there is evidence about the store's devastation of the village tax bases. The villages are suffering, with independent grocery stores gone, and their hulking buildings a shadow of their former assessments." The last four years includes a difficult recession, Rivers notes, "But there's no denying Wal-Mart, with its sheer immensity, has sucked too many sales out of the local economy."
One victim was Dale's Market, located on Albion's Main Street, which went out of business in 2007. That property once was assessed at close to a million dollars -- but now the Village has torn it down to build a library which pays no property or sales taxes. A regional grocery chain, Tops, opened a new store in Albion village three years before Wal-Mart. It had to ask the Village to lower its assessed value from $3.6 million to $2.75 million because of declining sales.
In the nearby towns of Holley and Medina, two Jubilee grocery stores shut down within six months of Wal-Mart's opening. The Jubilee store in Medina was valued at almost half a million before Wal-Mart, and is now worth less than $100,000 after three years sitting empty.
All these retail closings, says Rivers, leave other taxpayers holding the bag: "It means the remaining residents and businesses will bear a bigger burden in keeping afloat the police departments, fire companies, DPWs and other services." In total, the Village's tax base has fallen from $143.82 million in 2007, to $141.88 million for 2009. So valuations have actually fallen 1.35% since Wal-Mart's arrival -- a reversal of fortune. The same is true in Medina.
Even in the town of Albion, where the Wal-Mart superstore is located, town officials gave the world's wealthiest retailer a 50% tax break on town and county taxes. Even though Wal-Mart's store is valued at $6.975 million, it is only paying tax on $4.85 million -- a 30% tax break. The building will not pay full property taxes for another six years. The Village of Albion provides the store with water and sewer services, but gets no taxes from Wal-Mart.
Tom Rivers concludes: "Wal-Mart trumpets its slogan, 'Save Money. Live Better.' But surveying the carcasses of former stores in Orleans County villages, the message rings hollow."
What you can do: It's hard to know which is more appalling: the voodoo economics of Wal-Mart's impact on Albion, and its direct connection with the closure of Bernz-O-Matic and Ames, or the impact on existing merchants catalogued by Tom Rivers since the store opened.
How many of the workers at the Medina plant that shut down will shop at Wal-Mart? How many of them will stop by the hardware section and see Bernz-O-Matic products there that they used to make in Medina, now bearing a "Made in China" imprint on it? Will they make the connection? George Bower got the message, and he passed it on to Lee Scott. Wal-Mart is responsible for another company leaving an empty factory in Orleans county, and no amount of Wal-Mart clerks and baggers will ever make up for the lost manufacturing jobs and retail jobs that Wal-Mart convinces local officials would never happen.
Readers are urged to email the Town of Albion, NY Supervisor, Judith Koehler, at email@example.com with the following message: "Dear Supervisor Koehler, If you read Tom Rivers' analysis of the impact of the Town's Wal-Mart supercenter, the town of Albion might want to consider apologizing to the Medina and the Village of Albion for allowing a saturated market area to become flooded with groceries from a national chain like Wal-Mart, creating empty buildings and blighted properties in the process. To add insult to injury, your own taxpayers have been shortchanged by the unnecessary tax welfare deal you gave to Wal-Mart. I would urge you to at least renegotiate the corporate welfare deal immediately, and give the added Wal-Mart tax payments created by ending the tax break, to the Village. Right now, Wal-Mart is a symbol of the total lack of regional land use planning in Orleans county. It is this lack of coordination that allowed the Town to devastate the Village -- just to give added market share to Wal-Mart. Anyone who participated in this welfare deal for Wal-Mart should be voted out of office by the residents of Albion, who could have used that money to offset the cost of police and fire services to protect Wal-Mart. It is embarrassing that the Town of Albion had no clue about how these projects work economically, and that town officials were perfectly happy to hurt their neighbors by building redundant stores."