Ridgecrest, CA. Wal-Mart Superstore Mired in Public Welfare Snags
It's been an inch-by-inch crawl for Wal-Mart in Ridgecrest, California, because the world's largest retailer has been waiting years for public welfare to come through before building their superstore. The city has voted to use nearly $3 million in public welfare to make this Wal-Mart happen -- but it still hasn't happened.
City officials in Ridgecrest have been trying for many years to open a shiny, new Wal-Mart supercenter in their community. They already have a Wal-Mart on China Lake Boulevard. Thus far, all they have succeeded in doing is wrapping the huge project in bureaucratic red tape, instead of a ribbon-cutting.
In July of 2012, the Ridgecrest City Engineer said that Wal-Mart design plans were in the final stage -- decisions on infrastructure were still an issue. According to The Daily Independent newspaper, the engineer told city officials they needed to "wriggle in on" the infrastructure improvement costs that were necessary to support Walmart and meet code improvements."
Wal-Mart has been negotiating with the city over how much taxpayers should have to spend on site improvements as part of the construction deal. Paying for the cost of infrastructure, like drainage systems, has been an issue.
The fact that California Governor Jerry Brown pulled back on Redevelopment Agency funds (RDA) did not help much either. Ridgecrest was going to use RDA funds as part of the financial support of the Wal-Mart project. Losing RDA welfare forced the city to cut back on its financial "contribution" to the Wal-Mart project, which apparently cannot financially stand on its own legs.
The city engineer suggested that the biggest benefits to the city from this project would be the improvement of a road intersection, and new traffic signals, turn lanes and roadway improvements. But in reality, these improvements help Wal-Mart more than anyone, because without these changes, Wal-Mart's store is not viable.
City officials said making this superstore happen was a balancing act. "We want to make sure the city doesn't have any undo burdens," one city administrator told The Daily Independent. But why Wal-Mart was not footing the bill for its chosen site was not clear.
A "momentous first step" was reached in November of 2012, when the city's Economic Development Manager presented a plan to use a construction escrow agreement from the City's Tax Allocation Bond (TAB) funds for public works projects. The city council voted to use $2.8 million of $24 million in Tax Allocation Bond funding for public infrastructure projects. "It should be the last agreement we bring before the council and once executed, we will be able to establish a timeline for an actual gold-shovel ground breaking and eventual opening of Wal-Mart," the ED Manager said. "So we would be moving very quickly and I would hopefully tell you that would be my Christmas present to you, but it might be after the first of the year." There is still no Wal-Mart under the Xmas tree.
One option the city had was to borrow money from Wal-Mart for the project based upon the agreement and pay Wal-Mart back over five years. But it was not clear if TAB funds would be available. One city official noted, "This has been a long, long process with Wal-Mart, about seven or eight years. I remember during my first or second planning commission meeting, we gave the final approval on this agreement. That was four years ago."
This past week, the Ridgecrest's Community Development Committee was told that current litigation between the City and the California Department of Justice was tying up funds that were slated for the infrastructure around the Wal-Mart superstore. The dispute is apparently over a loan made two years ago using the city's RDA funds -- which now don't exist -- -- to pay for an elderly housing project.
At one point in time, it appears the city was willing to cough up $12 million in infrastructure support. But one option now is to scale that back to $5 million, which would also reduce the amount of capital improvements. The city also could move ahead with the project by borrowing $2.8 million from Wal-Mart, and the taxpayers would have to repay the loan, with interest, when the TAB funds become available for spending.
"It looks like the city has done everything it could possibly do to offer Wal-Mart a plan," one official said. Everything, that is, except asking Wal-Mart to pay its own way or forget about the superstore.
What you can do: Ridgecrest says it "boasts a thriving economy and a robust population of just over 27,000 people." The city says it serves as the shopping and business center for northeastern Kern County. This small community already has a Wal-Mart store, and does not need to spend more money just to shut it down to make way for a larger superstore.
Readers are urged to email Ridgecrest Mayor Dan Clark at: email@example.com with the following message:
Dear Mayor Clark,
A community of 27,000 people does not need a larger Wal-Mart superstore. The Wal-Mart you have on China Lake Boulevard is perfectly adequate to meet your shopping needs for Chinese imports. You don't need to use TAB funds, and you certainly don't need to borrow funds from the Walton family to build their store.
Please tell Wal-Mart to make do with what they've got. And if the richest retail corporation in America can't pay for its own infrastructure needs, then let the project fall of its own weight, don't prop it up with public welfare."