Cherokee, N.C. Wal-Mart Abandons Native American Superstore Deal
The last thing North Carolina needs is another Wal-Mart supercenter. A tribe of Native Americans in Cherokee, North Carolina was apparently the last to find that out.
On May 23, 2009, Sprawl-Busters reported that the Indian Reservation in Cherokee, North Carolina was promoting a 150,000 s.f. Wal-Mart supercenter.
Cherokee is located in western North Carolina on the Oconaluftee River and the Qualla Reservation, near Highway 19.
Tribal leaders were looking to fill their coffers with sales tax, but local merchants worried the project would hurt their sales. The Eastern Band, which is a federally-recognized tribal nation, planned to build the store and lease it to Wal-Mart.
The Eastern Band promotes its reservation as a tourist attraction. "The landscape of Cherokee presents lots of options for spending time outdoors," the Band writes on its website. "Fish for trout, swim at Islands Park, bring your softball league to play at the new John Crowe Recreation Complex or spend your time hiking, biking, tubing, kayaking, camping and bird watching." Or, Wal-Mart shopping.
The Reservation is located at the entrance to both the Great Smoky National Park and the Blue Ridge Parkway. According to the Asheville Citizen-Times, the Eastern Band Tribal Council approved a lease agreement to bring Wal-Mart to Cherokee. Principal Chief Michell Hicks told the newspaper that the Council's voted was 9-3. The Eastern Band claimed the new store would "create" 200 jobs, and add $5 million to the tribe's sales tax receipts. "I'm absolutely 100% in favor," Chief Hicks said. "We need a box retailer to prove our market so we can do further recruitment of other retailers."
The tribe had been working on this plan for nearly four years. Swain County has a population of less than 13,000 people, and ranks 89th out of 100 counties in North Carolina for population size. Local retailers in the area warned that Cherokee didn't have the consumer base to support a Wal-Mart supercenter and other merchants at the same time. "It will have a devastating effect on the local merchants," said Mike Butrum, owner of a home furnishings and gift store in Cherokee. "I think it will take business certainly from a store like mine. Those stores that sell commodity products, it will certainly hurt them."
But Chief Hicks shrugged off the concerns of local businesses. "We don't have the mom-and-pop shops," he told the newspaper. "Most of our market is tourist-related. I don't see it having the same effect as on other towns."
On June 10, 2009, Sprawl-Busters reported that not everyone on the tribal council was 'on the reservation' with Wal-Mart. Three council members voted against the plan. Under their agreement with the retailer, the tribe would have spent $25 million building the store for Wal-Mart. The tribe would lease the building to Wal-Mart at a cost of between $564,000 and $720,000 per year. The lease agreement was for a mandatory 20 years plus six optional five-year renewals, for a total of 50 years. If Wal-Mart made an average yearly lease payment of $642,000 over a 20-year period, the tribe would only get half of its money back, or $12.8 million.
That's why Council Chairman Mike Parker voted against the plan. "There's no guarantee that they're going to stick around long enough to pay that money back," Parker told the Smoky Mountain News. "I wasn't opposed to Wal-Mart, just the idea of giving them $25 million and then with no language in the lease holding them to that amount, I just couldn't rationalize that in my mind. It doesn't make business sense to give them $25 million with no guarantee."
The Eastern Band claims they had to build the superstore, because Wal-Mart is not allowed to own trust property on the Qualla Boundary. The Indians had to own the building and lease it to Wal-Mart. The tribe said the superstore would bring in nearly $214 million in tribal levy over a 25-year period, with the amount of levy gradually increasing with each five-year period. "This project alone will almost double the current Tribal Levy collections," a tribal spokesman said.
But on May 5, 2010, the Cherokees admitted that Mike Parker was right: Wal-Mart was not going to stick around long enough. A Wal-Mart spokesman confirmed the news. "We decided not to move ahead with the project," the spokesman said. "It is a combination of things. We have to consider a number of factors."
A town official in Cherokee told the News, "Our consultants informed us in early 2010 that Wal-Mart's domestic focus had changed primarily to urban markets due to the recent recession, however they would continue to pressure Wal-Mart's upper management to get the Cherokee deal approved and construction scheduled as soon as possible since lease negotiations with the Tribe had been ongoing prior to the downturn in the U.S. economy."
Wal-Mart explained that the Cherokee site did not make their cut this year. "Every year we have a certain amount of investment capital, and we have to determine the sites best suited for its use. This site didn't meet the threshold this year, but that's not to say it couldn't do so in the future."
The company spokesman said that Wal-Mart was putting more emphasis on Project Impact, its store remodeling plan, rather than adding new stores. "Two or three years ago, we made the decision to build fewer new stores and devote some of the money to remodeling existing stores."
Despite the bad news, Chief Hicks remained loyal to his giant retailer. "The Eastern Band of Cherokee remains committed to opening a Wal-Mart in our community however we cannot discuss the content of those negotiations at this time."
What you can do: One member of the Eastern Band wrote an Op Ed in the Asheville Citizen-Times that was not so complimentary to Wal-Mart. B. Lynne Harlan, a tribal historian said, "Wal-Mart is another in a long line of businesses that has shunned Native communities. Its mission is seemingly to boost its bottom line... Wal-Mart has shown our community that our dollars are not valuable to the retailer and that service to our community is not a factor in decision-making. I would like to say that we won't shop at Wal-Mart any longer... It is a pity that the world's largest retailer doesn't believe in using its popularity to actually make a difference."
There is already a Wal-Mart superstore ten miles to the southeast from this site in Sylva, North Carolina, and another supercenter 18 miles to the east in Waynesville, North Carolina. This project was clearly designed to accommodate tourists coming to Cherokee, yet the project itself was designed as a typical suburban, land-consumptive, car-dependent superstore. It is not being built for the local residents, and many of its sales will come from existing merchants. There are a number of grocery stores in the area, from the chain Food Lion to Save-A-Lot and Ingles Markets. Ingles is a family-owned chain of 200 stores.
Readers are urged to call the Eastern Band's toll free number after business hours at 800-438-1601 and leave the following message for Chief Hicks: "Dear Chief Hicks, Imagine how visitors would feel coming to the land of Blue Smoke to find a huge, asphalt and concrete Wal-Mart superstore. You are a CPA, you understand numbers. Cherokee and Swain County don't have the population base to support another superstore. You have to rely on tourists coming to Cherokee -- but it is those same tourists who support the existing merchants now. Area grocery stores, like Food Lion and Ingles, certainly will lose sales, and some smaller companies will go out of business. This is not economic development.
Your area is already saturated with two nearby Wal-Mart superstores. This big box fiasco will be remembered as the biggest mistake the Eastern Band ever made. You, and Cherokee, are better off now that Wal-Mart has made the decision to cut the project. Now you see how the company operates. They made the decision on their own, without the Eastern Band. You just saved yourself 20 years of corporate rule."