Derry, NH Wal-Mart Wants to “Live Free” on New Hampshire Subsidies
Wal-Mart understands the state slogan in New Hampshire: "Live Free or Die."
The giant retailer is once again trying to live off of free money at the expense of New Hampshire taxpayers. The world's largest retailer has its hand out, looking for public welfare instead of relying on its own enormous profits.
Sprawl-Busters reported on May 9, 2010, that a lot of Wal-Mart opponents in Derry, New Hampshire were disappointed to learn that Wal-Mart had decided to try to build a superstore in this community of 34,000 people.
That's because there already is a Wal-Mart discount store on Manchester Road in Derry. But Wal-Mart wants a bigger store so it can add a full line of groceries. There are, in fact, no less than 12 Wal-Mart stores within 18 miles of Derry, so the residents have plenty of places to get their cheap Chinese imports.
But Americans swoon at the "bigger is better" mentality, even though killing off the existing store makes no sense from a land use perspective, and adds no value to the Derry economy. Local officials are ready to throw cash at the project because it is new and big.
Two years ago, in March of 2008, Wal-Mart dropped plans to build a Derry superstore. But now the company says its plans are back on the drawing board -- which means the company will leave behind a 'dark store' that could remain empty for years. According to the Lawrence Eagle Tribune newspaper, the site Wal-Mart covets now is the same location on Route 28 that it was developing two years ago.
Wal-Mart's regional community manager issued the standard company statement about the on-again project. "We are excited to bring even more savings and convenience to the Derry community. Our relationship with the residents of this community has been long-standing and we look forward to continuing to serve the area." When Wal-Mart gets "excited," it's a signal for local officials to bring out their candy store of giveaways.
The new store will measure in at 147,000 s.f. Wal-Mart says the 160 people it employs at its current Derry store will be transferred to the new site, and that 85 new jobs will be created. This, of course, is a gross figure, and does not indicate the net jobs left once you subtract out the similar jobs that will be lost at existing grocery stores in the Derry trade area.
The existing Manchester Road location just minutes away is 115,000 s.f. -- which is large enough to be a supercenter. A second location is totally unnecessary. Wal-Mart could do an "in-box conversion," in which the existing store footprint is simply reconfigured to make room for groceries. This would require no permits, no hearings, and no major controversy.
In the spring of 2008, Wal-Mart announced a major slow down in new store development. The company told Derry officials that the economy was the main reason it was shutting down negotiations with the town.
But Wal-Mart now says times have changed. "Due to changing dynamics in the regional and national economy, we feel this proposal is a good fit at this time," the Wal-Mart spokesman told The Eagle Tribune.
Two years ago, during negotiations with the town, Wal-Mart was asked to come up with $1 million to help upgrade Route 28 for their new store. It turns out that town officials have been having private meetings with Wal-Mart for months, without the public knowing about it. "We've had some discussions with the real estate people over the last couple months," Derry's planning director admitted to the newspaper.
This week, the Derry News says that Wal-Mart's "bigger and better" store is ready to move through its local reviews -- and a public bailout is attached to the idea. The newspaper explains that the new site Wal-Mart has chosen is "firmly in Derry's tax increment financing district, a spot town officials hope will bring more economic growth and development to the area."
TIF is simply a form of public welfare that gives rich developers back tax payments that would have gone to the local community, but instead go to underwrite the cost of site improvements. The developer is thus able to use public money to subsidize their project -- something that smaller merchants have to watch from the sidelines. The same property that Wal-Mart passed on in 2008 now looks alot sweeter, thanks to New Hampshire taxpayers.
In fact taxpayers are underwriting the cost of an expansion project along Route 28, to pave the way for bigger retailers. The Derry News says town officials in Derry are negotiating with a number of landowners along Route 28 to buy the frontage needed to build wider roads to hold larger traffic volumes.
In return for this public subsidy, Derry residents will get a Wal-Mart with an expanded grocery section, wider aisles, and what the retailer calls "more shopper-friendly features."
Derry's effort to throw cash at billionaires continues on the evening of July 21st, when the Derry Planning Board shows Wal-Mart how to live free in New Hampshire. Ironically, New Hampshire is a state without a sales tax, so all local residents can look to is the incremental increase in property tax payments. But once you subtract out the loss of value at other smaller merchants that close, and the added municipal costs of police and fire protection -- most projects like this are just a wash -- or lose money for the town.
What you can do: Town officials in this small community seem to have no clue what this project means for the local economy.
"I think it's great," Derry Town Council Chairman Brad Benson told the Eagle-Tribune last spring. "I think any further economic development Derry could get is good."
But is Wal-Mart a form of economic development, or simply a form of economic displacement?
The town council has no economic impact study before them, and "thinks" this project means jobs -- but actually has no evidence that a supercenter means a net gain of any jobs.
Wal-Mart claims 85 new jobs will emerge from this subsidy, and the closing of an existing store. Another town councilor told the newspaper, "I'm happy they are going to come. But if it's not them, then it will be someone else. If Wal-Mart comes, it will bring a lot of other people. Hopefully, it will be beneficial to Derry."
But economic development should not be based on 'hope.' The reality is not only will Derry be left with a dead Wal-Mart to fill -- and very few retailers want a 115,000 s.f. used building -- but there is also an existing Wal-Mart superstore only 7 miles away in Salem, New Hampshire, which could also lose sales.
Wal-Mart admitted in its 2010 annual report that new stores often steal sales from existing stores, so the addition of new stores cuts into a key indicator called "same store sales growth," which was very weak at Wal-Mart this year -- in part because of the over- saturation of stores -- as in the Derry trade area.
Readers are urged to contact Derry Town Council Chairman Brad Benson and his colleagues on the Council at email@example.com with the following message: "Dear Chairman Benson and Council Members, I was surprised to see your assessment of the proposed Wal-Mart superstore as being 'great.' Why do you consider this a form of economic development?
I would urge you to check with your existing grocery stores in town to ask them how many people they employ, before you start counting your 85 promised jobs at Wal-Mart.
The town would do well to put in place a surety bond for demolition of retail stores that sit empty for more than 12 months, because you are going to have a 115,000 s.f. dead store on your hands within a year after you green light Wal-Mart.
The fact is, a Wal-Mart superstore will make some things increase: crime, traffic, air pollution, noise and light pollution. It will make residential property values near the site go down. But that's it. Another retailer in town just means one more player in the game of retail musical chairs.
A study several years ago concluded that for every one Wal-Mart supercenter that opens, two area grocery stores will close.
No, Wal-Mart is not "great" for Derry. One Wal-Mart in Derry is one more than enough. Instead of wasting more land and resources on a new store, why don't you ask Wal-Mart to do an 'in-box conversion' at their existing store, by reformatting the interior floor space? That would be more sustainable, consume less energy, generate less pollution, and still give them increase market share.
Before you declare this kind of retail cannibalism "great," do some research on Wal-Mart's impact on municipal costs -- especially public safety. Then you will understand why so many towns in New Hampshire have fought this suburban sprawl.
Instead of giving this company public welfare, in the form of a TIF subsidy, you should set aside tax revenues from the new store to pay for the demolition of their 'old' store, so that the taxpayers don't end up footing the bill for that piece of Wal-Mart history too."