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2000-01-15
Huntington Beach, CA.Example of "Wal-Math"

On September 1 and 5, 1999 (see earlier newsflashes), we presented the story of Huntington Beach, CA, where the numbers for Wal-Mart just don't add up. Here in Surf City, Wal-Mart has run into a lot of heavy waves, and an initiative petition to rezone land the company wants is on the ballot for March 7th. The citizen's group Crest View United gathered enough signatures to put the rezoning issue before voters. The land in question is owned by the local Ocean View school district, which hopes to demolish a school on the property and then rent out the land to Wal-Mart with a 65 year lease! The land was rezoned commercial back in January, 1998 by a split vote (4-3) of the City Council. Crest View United says that Wal-Mart has misled residents about the store's likely economic impacts, in a classic case of "Wal-Math".Wal-Mart claims their superstore will bring the city $400,000 a year in sales tax revenues. But Tom Livengood, the Chairman of the City's Planning Commission, says that once you net out the cost of city services, reduced state aid, the lost sales taxes at other businesses, and the lowered sales due to price competition, the net sales tax gain from a Wal-Mart could be closer to $170,000 per year. Wal-Mart has exaggerated its economic impact by nearly two-thirds! Livengood also criticized the School Board for basing its numbers on a 65 year lease, noting that retailers come and go. "The district in a few years may end up with an empty 134,000 s.f. box," he wrote. Opponents of the project point out that the School District could make $35 million today by rezoning the property back to residential, and selling it. They say that if the existing school on the site were sold to a private school, the city could get $8 million from the sale, plus $27 million in state modernization funds. The School District, on the other hand, wants to save all its rent from Wal-Mart, and after 11 years have enough revenue to apply for $5.4 million in state funds. Crest View United says that if the school sells the property, they can net $12 million in surplus from the $35 million, invest that and earn $600,000 in interest -- more money than the lease with Wal-Mart will bring -- with more stability. Wal-Mart, meanwhile, has funded a direct mailing to city voters imploring them to "save our schools, save our city". Citizens paid for an their own economic impact study of Wal-Mart, which concluded that the local trade area was already "well represented" with big box retailers (there are 2 Wal-Marts, a Kmart and a Sam's Club all within 4 miles of the site), and another Wal-Mart would only "further fragment the market rather than expand the sales tax base". The study suggests that Kmart "would be hard hit and in liklihood would have to close one of their stores". Target would be "negatively impacted", as they lost 25% of their business in San Diego when Wal-Mart opened there. The already struggling Huntington Mall would be further harmed. "The opening of a Wal-Mart supercenter would have a destructive effect on existing supermarkets, their employees and families, and in turn the city, since there would be little or no increase in sales tax revenues," the study concluded. A Wal-Mart just opened 5 miles from this site in the city of Westminster, and "has already impacted Huntington Beach retailers and will continue to do so over the next three year period." To add insult to injury, the City's Business Development Department has offered financial assistance to Wal-Mart to write down the cost of the land over a 10 to 15 year period. "Do the Math," says Crest View United. "The obvious long term result could be loss of tax revenue for the city, and a closing of one or more of these supermarkets."

What you can do: "Measure 1" will go before Huntington Beach voters on March 7th. Wal-Mart has pitched the issue as being a "save our schools" vote. Although Crest View United does not have the money to match what Wal-Mart will spend on this election, the citizens point out that the City's Planning Commission voted unanimously to deny Wal-Mart's proposal. To find out more about HB, go to www.savecrestview.com.










 
 
"Norman has become the guru of the anti-Wal-Mart movement" ~ 60 Minutes

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