Tuesday, May 31, 2005

Wal-Mart on 127th Street Update

According to a source, though there is interest in developing the site on 127th st, nothing is happening at the current time. We'll keep you all apprised if things change.

Box Store Moratorium

We are posting a draft proposal that details the need for New York City to do an in-depth and impartial study of the impact of the proliferation of box stores on New York City’s economy and neighborhoods. We welcome all comments. With the mayor touting all of his outer borough economic development issues it is about time we get good policy analysis that evaluates the impacts of these projects.

It is, however, important to point out (as one of our readers already has cogently done), a great deal of what passes for economic impact analysis is often simply partisan pap. We’d welcome any ideas, and would probably post the ones that are most germane, on how to create the best method for insuring independent project analysis. If we simply throw up our hands and say, “All work is self-serving” then we are left with a defeatism that leaves the process evaluation to the politically strongest.

Subsidy Review Procedures

That being said, it is also true that ULURP does not include any evaluation of the level of public subsidies provided to a development. Without fully knowing the political legs of the state legislation sponsored by Richard Brodsky and promoted by New York Jobs with Justice, isn’t it a good idea to see if we can’t replicate the proposal at the city level?

In our view, such a Community Impact Review should precede certification and be done so that those involved in the land use review process could have all the information prior to signing off. A project may pass muster on its own but fail to be approved because, while having some merit, it nonetheless lacked sufficient value to justify a high level of public subsidy. In addition if, after approval, a project seeks additional finances these too should signal a renewed review process (kind of like a supplemental EIS).

Is Wal-Mart Good for Minority Communities?

We came across a very interesting article on Wal-Mart and minority communities (first published in the magazine ColorLines) on Reclaim Democracy's site.

At the corner of Grand and Kilpatrick Avenues in Chicago, the Rev. Joseph Kyles addressed a rally last May. "Tomorrow morning," he said, "we need you to pray for the City Council to vote for Wal-Mart in this community." That Rev. Kyles would be preaching the virtues of a corporate retail behemoth was no fluke. It was part of a strategy by Wal-Mart executives to cultivate support among black city council members and church leaders for building two stores in Chicago--each about the size of ten football fields. It is also part of a broader strategy to bring Wal-Mart to the 'hood--touting not just lower prices but also racial equity.
The piece discusses Wal-Mart's courting of minority, low to middle income communities and how the power of low prices and job creation can be very tempting (Liza Featherstone in The Nation wrote another good article on this issue). This pitch failed in Inglewood, California but succeeded in Chicago where a variety of factors, including a poor relationship between people of color and the town's unions, helped Wal-Mart built its first Windy City location.

We believe it crucial that the Wal-Mart Free NYC coalition learn from these successes and failures. New York is certainly different in some ways- there is more minority representation in the union movement, there are a number of minority City Council members who are against Wal-Mart - but we must be sure to continue cultivating support in the city's diverse ethnic communities. Problems such as unemployment and “understorring” are real and we must be ready to explain why Wal-Mart isn't the best solution to them.

Monday, May 30, 2005

“Dazzling New Box Center”

The Related Companies is moving aggressively into its high octane P.R. mode with today’s “exclusive” rendering of its “dazzling” new mall on the gravesite of the Bronx Terminal Market. Patrick Gallohue, who wrote the piece for the Post, seems to have gotten caught up in the manufactured euphoria saying that the retail development “could soon draw crowds rivaling those for ‘The House that Ruth Built.’” Perhaps, picking up on the comparison, we could call the development “the mall that ruthlessness built.”

In the article the Post quotes Related’s Glenn Goldstein who was last seen in what looked like a $1,000 Armani suit shilling for Related's ill-fated BJ’s project in Soundview. Goldstein once again trotted out the “eyesore” characterization of the Market but neglected to state how the culprit who created this eyesore, a despicable character named Buntzman, is now his company’s new partner in the development.

What will be in the Mall?

Once again, when given the opportunity Related remains coy about the mall’s content. After describing the company’s Brooklyn Gateway development, the one with Target, Home Depot and BJ’s, the Post cites the architects who aver that “its Bronx counterpart is likely to have a more homegrown appeal, at least on the ground floor…” Homegrown appeal: does this mean sancocho, platanos and rice and beans?

What we see here is another attempt at delaying disclosure of the tenants. We do know that you’re not going to generate $21 million in sales (could this number be right?) by just selling cuchifritos and cerveza. Come on Related, show us what’s behind door number two.

“Buttlegging” Cigarettes

Once again, in the usual ironic twist, it is incontrovertibly demonstrated that cigarettes kill. As the NY post reports yesterday, a dispute between two sellers of bootlegged cigarettes ended when one of the illicit sellers stabbed and killed the other. Both men sold cigarettes at 125th Street and St. Nicholas Avenue in Harlem.

A little over a year ago, in a similar dispute, one buttlegger was shot and another was knifed to death. All of this mayhem, of course, has been aided and abetted by Mayor Bloomberg’s confiscatory cigarette tax, an 1800% increase from .08 cents a pack to $1.50. As a result, Bloomberg is responsible for the largest increase in black market smuggling in the city’s history. The income transfer, leading to the loss of 60% of the legal sales, has cost bodegas, delis, green grocers and newsstands over $250,000,000 a year. The increased tax money has been transferred to the city and state treasuries but it is the smugglers, and their Native American suppliers, who have reaped the largest financial windfall.

In spite of all the evidence Bloomberg has done nothing to stem the illegal tide and, in an Emperor’s New Clothes mindset, seems to say that the declining legal sales is evidence of a decline in tobacco consumption (to be fair, the Mayor doesn’t frequently traverse the streets most affected by bootlegging so he may just be ignorant).

The Times has the Story but Misses the Motive

In the Metro Section of yesterday’s Times, reporter Jennifer Lee reports the stabbing death of the buttlegger but fails to mention the motive for the slaying. Ironically, the times has a comprehensive Metro front page story by Michael Cooper on the State Attorney General’s frustration with the US Post Office for the Agency’s failure to crackdown on the shipping of non-taxed cigarettes. Once again, it is the Seneca Indians in Western New York who are singled out as the source. One of its websites claims that “it is not bound by federal or state laws” because it is run by Indians.

This is utter hogwash. The Supreme Court long ago decided that Native Americans were obligated to charge tax on tobacco products that are sold to non-Indian customers. The New York State Legislature has passed a law mandating that the State Department of Taxation and Finance start the collection but, in a display of pure idiocy, the pusillanimous Commissioner, Andrew Eristoff, told a legislative hearing that he was afraid of “Indian violence.”

When will the Governor Enforce the Law?

Put simply, George Pataki has refused to enforce the law. Knowledgeable observers in Albany tell us that the refusal is not really about the fear of Indian violence (and how foolish is this claim in an era of terrorism), but about the interlocking connections between these Indians, Casinos, and former officials (now lobbyists) of the Pataki Administration.

What makes this more outrageous is that while honest store owners are losing tens of millions of dollars a year, the state, according to some estimates, may be losing close to a billion dollars yearly if the sale of petroleum is factored in.

Internet and Street Sales

While Eliot Spitzer’s office has done a good job in pursuing the internet scams, the fact remains that internet sales are not the major source of non-taxed cigarettes in low-income areas of New York City. What we find in those areas are street smugglers who have likely purchased in bulk from reservations on the eastern end of Long Island. The end result is lost business and now death as illegal vendors fight for territory in Harlem.

“A Minor Economic Issue”

What makes matters worse is that when Bloomberg rammed the cigarette tax through in 2002 we predicted the black market surge and the concomitant calamity at local stores. The mayor, who clearly saw the folly of a stock transfer tax (it would hurt vital businesses, he said), called the complaints of the bodegueros “a minor economic issue.” We guess the loss of $250 million is minor for the billionaire mayor.

The mayor, and Health Commissioner Frieden, are forever talking about the (uncorroborated) deaths from secondhand smoke but when actual death occurs because of this ill-conceived tax – the largest percentage tax increase in city history – the mayor remains mute. Just like the Times missing of motive, this is an example of a class bias that simply ignores what is happening on the streets and in the stores in low income communities.

Friday, May 27, 2005

FDNY Redux

A few weeks ago we posted a commentary on the importance of fire protection to the safety and wellbeing of local neighborhoods. Business and residents alike depend on the swift response time we’ve come to expect from our dedicated firefighters. That is why we are so critical of the ad hoc nature of the mayor’s 2002 firehouse closings. The Department’s siting models are way out of date and, as a result, decisions to close or re-open houses often rest on political considerations more than public safety concerns.

So, it was no surprise when we read Meghan Clyne’s story on the mayor’s decision to staff the Rossville fire station (registration required) on Staten Island. For two years elected officials, led by Councilman James Oddo, fought to staff the facility, citing data showing that response times on the Island – “because of sprawl” – lagged behind the other four boroughs. Now, while Oddo is frankly puzzled but also pleased about the decision, Bloomberg’s mayoral opponent Tom Ognibene has no doubt that the move was based strictly on politics.
Pointing to a startling about-face over Staten Island's Rossville fire station, one of Mayor Bloomberg's Republican challengers, Thomas Ognibene, has accused the mayor of sacrificing public safety on the altar of campaign politics.


Mr. Ognibene called on the Fire Department to release the data that prompted Mr. Scoppetta to staff the Rossville station. He also said he doubted that a significant statistical difference in the span of three weeks prompted the reversal of a position the Bloomberg administration had clung to for two years.

"The point is that we all know it's a lie. We all know what it's done for," Mr. Ognibene said.

He also expressed concern that, since Mr. Bloomberg's decision was made of convenience, if there is a budget shortfall next year under a Bloomberg administration, the Rossville station would be among the first cuts, having served its temporary political purpose.
We see no reason to disagree with Tom.

All of this, of course, is linked to the 2002 decision to close six firehouses. According to the New York Times, responses to structural fires have risen 18 seconds compared to last year and while the contributing factors are varied we must agree with Stephen J. Cassidy, president of the Uniformed Firefighters Association, who pins some of the blame on firehouse closings. The City Council should, along with all the mayoral candidates, demand the re-opening of the closed houses and the commissioning of a new comprehensive siting study. Speaker Miller should also follow the Alliance’s lead and introduce a bill mandating a full environmental review prior to the closing and any local firehouse.

The Sun article points to our continued emphasis on the dangers of Staten Island sprawl. Emergency vehicle response time is a crucial public safety issue. It is a key ingredient also in our conservative case against Wal-Mart on the Island (which we will elaborate on next week). Roads are at capacity and adding tens of thousands of more vehicle trips every week poses a grave danger to public safety and will, if the stores are built, compel tax payers to shell out millions of dollars more for new fire houses and police stations.

Thursday, May 26, 2005

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Wal-Mart #1 Employer on Wisconsin's Badger Care

As mentioned on Wake Up Wal-Mart and Wal-Mart Watch, Wisconsin is the latest state to discover that Wal-Mart employees and their dependents are the #1 users of its public health care system. An editorial in the Milwaukee Sentinel Journal summarizes the anger about this development:

Big box stores like Wal-Mart cost us all in lots of ways: more traffic, water pollution, flooding and fewer family-supporting jobs. But one thing really hits in the checkbook - higher taxes to subsidize their health insurance.

It really bugs us to learn that billions in tax money go to make the richest company in the world, Wal-Mart, even richer. That's just wrong.

Wal-Mart has the most employees and families on BadgerCare, the state Medicaid program for low-income working families with children, costing you at least $1.8 million a year. Wal-Mart's total Wisconsin health care subsidy for state and federal taxpayers is $4.75 million a year, according to recent news reports.

Wal-Mart on 127th Street?

We’ve been hearing rumblings that a mega-retail project is being planned for 127th street, between 2nd and 3rd avenues, in East Harlem. The tip, which came from City Council candidate Felipe Luciano, also is that IKEA and Wal-Mart are actively looking at the site. We’ll keep digging on this.

New York Needs Small Business Evaluation

The various candidates, including the mayor, needs to pledge to conduct an in-depth analysis of the contribution – economic and social – that small neighborhood businesses make to the overall wellbeing of the city. With all of the promotion of malls and box stores it’s almost as if there is absolutely no awareness of the potential resources being lost in the process. Following the Andersonville model would be a good place to start.

Wal-Mart Came, Wal-Mart Conquered, Wal-Mart Left

If you were still in need of convincing, there is a story out of McGhee, Arkansas about a town that is begging and pleading to – keeps its Wal-Mart. During its thirty years in the town, the Wal-Mart has just about wiped out the small downtown businesses so all that is currently left is 100,000 sq. ft. box store. However, McGhee’s store was built in the 1970s and is small by today’s standards meaning that the chain is looking to close it and build a supercenter 30 miles away.

A small, fading community in Southeast Arkansas learns its small, outdated Wal-Mart will shut down if the company decides to build a Supercenter in a rival town 20 miles up the highway. Everyone from the mayor to students at the high school starts throwing everything they can at the corporate Wal-Mart wall — Census figures and crime statistics, barrages of phone calls and e-mails, the implied threat of a whole bunch of bad PR — hoping enough will stick to convince Wal-Mart to stay.

The irony is not lost on Mayor Bain Poole.

“As we all know, that’s sort of unusual,” he said. “… But when you reach the point where Wal-Mart’s all you got left — we’re trying to keep it.”
This is a trend that we’ve seen all over the country. It points out once again that Wal-Mart’s concerns are all about its profitability and has no allegiance to any town (or, given its China policy, any country). While this certainly their right, it is also a community’s prerogative to worry about whether Wal-Mart, after putting out local business, will even stay to service that community. Neighborhood residents not only rightfully fret about the transiency that Wal-Mart creates but also the fact that Wal-Mart itself is a truly transient entity.

The experience of McGhee also points out the fraudulent nature of the chain’s Sam’s Club ads that try to portray the club store as the best friend of small business.

Wednesday, May 25, 2005

Advocates for Rasiej

We attended the Small Business Congress event earlier today and heard from a number of politicians and candidates who touted the importance of small businesses to the economic well-being of New York City. One such candidate was Andrew Rasiej, a small businessman and founder of the New York Nightlife Association, who is running for Public Advocate. He definitely struck all the right notes about the need to promote the interests of independent merchants and we'll continue to update you on his campaign.

Ikea Court Case

Though we're not involved in the Brooklyn Ikea fight, we've been following it closely and want to alert you to this:


NEW YORK, May 24, 2005. On Thursday morning, May 26, 2005, at 11am, attorney Antonia Bryson of the Urban Environmental Law Center will argue diverse individual and business Brooklyn plaintiffs' challenge to the proposed tax-subsidized 22-acre Ikea-Red Hook project before the New York State Supreme Court, 111 Centre Street, Manhattan, Part 44, Room 581. Plaintiffs are seeking to annul and vacate the Environmental Impact Statement and the City Planning Commission and City Council approvals of the project.

Plaintiffs argue, first, that when the municipal defendants City Planning Commission and New York City Council voted to turn over the Brooklyn waterfront to Ikea in October of 2004, they illegally failed to acknowledge New York City's own master plan for the Red Hook waterfront. This is a violation of the principles undergirding the authority of New York City to engage in zoning. Second, when the Commission and the Council rubber-stamped the Ikea defendants' Final Environmental Impact Statement they failed to take the "close look" that the law requires.
For the entire release visit Big Cities, Big Boxes

Bronx Terminal Market Press Conference

The International Olympic Committee’s final evaluation report will be released on June 6th. Will the stadium and, hopefully, the velodrome come crashing down soon after (assuming New York fails to secure the Olympics in 2012)?

Two days later, the Bronx Terminal Market merchants and their allies will be holding a press conference at 11:00 a.m. at City Hall in preparation for the June 27th City Council hearing. As we have been pointing out, the press conference will feature merchants from all over the city who utilize the Market as well as Jobs with Justice legislation (sponsored by Assemblyman Richard Brodsky), that seeks to create greater scrutiny for projects receiving public financing.

New York State Accountable Development Initiative (ADI)

The ADI creates a much more detailed oversight scheme than which is utilized under the current ULURP process. The key feature is a Community Impact Report (CIR) that is independently conducted over an 8 month period. The CIR has a comprehensive list of mandate basic standards that focuses on:

1) Living and prevailing wages
2) Employment benefits
3) Job training opportunities
4) Mitigation of negative neighborhood impacts
5) Community benefits

Under the current ULURP, the economic impact analysis rarely transcends the boilerplate fill-in-the-blank style of analysis that has become acceptable to city planners. Put frankly, there has never been any real attempt to do in-depth economic impacts from the folks at EDC who, real estate-driven, simply act as cheerleaders and a conduit for developer interests. One useful study (of the Pathmark in East Harlem) found an 89% favorable rating for local supermarkets and, as a result, was just about disavowed by EDC with the author’s being pressed to adjust their findings.

Jobs with Justice is looking at the Bronx Terminal Market as a poster child for this legislation. Unlike the Brooklyn Nets project which has a major community outreach and community benefits component, the Gateway development proceeds in secrecy with Related’s typical bogarting mentality and lack of transparency. Does anyone really believe that the current ULURP process will come anywhere near answering the questions mandated under the ADI?

Indoor Smoking Ban Challenged

Tom (Quixote) Ognibene, a noble knight indeed, has forcefully come out against the mayor’s indoor smoking ban. In typical fashion, the mayor’s campaign spokesman, Stu Loeser, has called Ognibene’s stance “perverse,” claiming that the candidate is looking to expose New Yorkers to unwanted carcinogens. Forget all the science here (A ten year W.H.O study found absolutely no correlation between cancer and so-called E.T.S, Environmentally Transmitted Smoke), what we all need to remember is that the mayor mentioned nada about smoking when he first ran. Makes you wonder what else is in his bait-and-switch arsenal. Maybe if we had enough money to have a school of public health named after us we too would feel the strong flow of scientific expertise flowing through our veins.

Tuesday, May 24, 2005

Masyr's Gift to Giff

David Siefman reports in Sunday's Post that Related lawyer Jesse Masyr, through his wife Joanne, gave $4400 to Gifford Miller's campaign:

When BJ's Warehouse tried to open a new store in The Bronx, it quickly won support from the local community board, City Planning Commission, Bronx borough president and numerous residents.

But the City Council, in an attack on big-box stores and amid internal wrangling, refused to go along and BJ's pulled its application in February.

Jesse Masyr, the lawyer for the developer, Related Cos., certainly wasn't pleased.

Now, in an odd development, Masyr's wife, Joanne, has turned up in the campaign filings of Council Speaker Gifford Miller as a hefty $4,400 donor.

The contribution was recorded March 14 — a month after Miller helped kill the BJ's application.

"I obviously was disappointed in what happened," Masyr told The Post. "That's not going to end my friendship with Gifford."
Imagine the contribution if Related actually won that battle! So, according to Masyr, the money is simply being used to maintain a friendship. It couldn't have anything to do with Related's desire to rapidly certify their Gateway project this summer before the situation with the Bronx Terminal Market merchants is even decided.

The Small Business Congress

The Small Business Congress, a group headed by long time advocate Sung Soo Kim, is holding its Second General Meeting and Fundraiser tomorrow, May 25th from 11:00 to 1:00 at the Beekman located at 15 Beekman Street. The Congress is a federation of trade groups and has worked with the Neighborhood Retail Alliance on a number of issues including the City’s harsh and unfair regulatory environment. We encourage anyone who is interested in preserving NYC’s small businesses to attend.

Silk Purses and Sow's Ears: Mama Mia Comes to Broadway

In yesterday’s Sun, Daniela Gerson interviewed Wal-Mart spokeswoman Mia Masten (registration required). Clearly, the Bentonville crowd has hired an attractive and articulate woman in their effort to turn Fun City into Spin City. We particularly liked the comment that workers would be able to form a union “If they want to, they have the option to do that. ... But at this point our associates don't want a union.”

Which associates is Mia talking about? All of those New Yorkers who have yet to be hired but who she’s certain will adopt the same anti-union ethos that the company espouses? The real question Gerson should have posed is will Wal-Mart allow unfettered union access to its employees and pledge to do nothing to impede labor’s organizing efforts? Then again, why ask a question when the answer is self-evident.

The other spinsanity involved Masten’s mea culpa on low pay and benefits: “Keep in mind, this is retail.” Well, we’ll keep it in mind when you explain just how Wal-Mart employees have become the most welfare-dependent (disproportionately so) workforce in the country.

Wal-Mart is Looking Everywhere

As we have constantly reminded business and community leaders all over the city, Wal-Mart is, in Masten words, “Looking at all five boroughs at this time.” The fight in Staten Island is part of a much larger and more comprehensive battle that is definitely citywide in scope. In this battle there is no community that is immune from the potential danger Wal-Mart presents to an area.

62% of New Yorkers Want Wal-Mart?

The Wal-Mart poll, sort of like the old vanity press, somehow found that 62% of New Yorkers do want Wal-Mart. The missing ingredient here, aside from non-biased polling, is how New Yorkers will feel about that Wal-Mart means to their neighborhood should a location be designated nearby. In New York City, it’s never only about the store itself, but, of course, location, location, location.

Monday, May 23, 2005

Daily news Focuses on “Controversial” BTM Deal”

In today’s Daily News, Bill Egbert gets it right on the legal proceedings surrounding the eviction of the merchants at the Bronx Terminal Market. The deal is on hold until the legality of EDC’s action is fully evaluated by the courts.

This is precisely the issue that the City Council needs to focus on at its June 27th hearing. What we have here is an unacceptable sleight-of-height by the master magician himself: Dan Doctoroff. What kind of planning process is this? The current Market is a potentially valuable resource and even more so under the proposed free trade agreement (CAFTA) that will hopefully stimulate more trade into and from Central America and the Dominican Republic. How does the city justify removing the merchants and, even more shamefully, justify allowing Related to plan what to do for over a million square feet of valuable retail space right on the river?

It is also good to see Adolfo Carrion step up forcefully in defense of the merchants who will need time to find suitable alternative space, if it’s in fact decided that relocation is the optimal choice.

Andersonville Study: The Value of Small Business

The proliferation of box stores around the county has resulted in a new trend in economic analysis. This trend, supporting the findings of organizations like the Institute for Self Reliance, seeks to underscore the intrinsic value of the local economy and to contrast this value with the benefits of box stores. The Andersonville Study, done by a firm called Civic Economics, was conducted in the north Chicago neighborhood of the same name and sought to compare the economic impact of the neighborhood’s locally-owned businesses and compare that with the impact of competitive chains.

In a fashion similar to the Institute of Self-Reliance’s Maine study, Civic Economics found that local merchants generate substantially greater economic impact than chain firms and that “replacement of local businesses with chains will reduce the overall vigor of the local economy” (pg 1).

Which gets us back to the overall issue of economic impact studies. Will the EIS sponsored by Related for its Gateway project begin to examine these issues at all, let alone with the same degree of sophistication? The nuances of local vs. chain are manifold:

1) What is the value added of local retail being predominately minority-owned?
2) What about the neighborhood values of local walk-to-shop commercial strips?

3) What about the replacement of unionized supermarket workers with non-unionized employees?

4) What about large chain stores replacing entrepreneurs, business owners who frequently own homes in the community?

Economic Impact Studies and ULURP

We have already made some preliminary comments on the inadequacy of the current ULURP process. More needs to be said, especially when looking at the area of economic impacts. We’ve already seen how City Planning mismanaged the review of the proposed BJ’s in the Bronx. We can’t imagine how the agency allowed a proposal for the largest food store in the Bronx to proceed with no economic impact study. Clearly, the CEQR guidelines need to be clarified in regards to box stores.

That being said, however, another point needs mentioning. The level of consulting work that city planners accept is incredibly inadequate – generally cursory and boilerplate regurgitation of economic and demographic statistics. The current crop of recognized experts is expert only in jiggering the process and, as a result, the level of analysis never transcends the perfunctory.

The reason for this inadequacy lies with the economics of land use. Land use consultants can only make money advising developers and, over the course of the past two decades, those firms that have become successful have done so by honing their ability to game the process and by refining minimization into a lucrative art form.

This is not meant to criticize the innate talent of the assorted experts. This critique is much more about the essentially cynical and shallow nature of the land use process, a devaluation that scorns real substantive analysis and makes the entire ULURP contest a test of political will. In such a contest the data becomes self-serving.

Friday, May 20, 2005

Subsidies, Subsidies

More and more good government groups are beginning to question the unusual public largesse being earmarked for Related’s Bronx project. We would expect that there will be a considerable din raised at the June 27th City Council hearing about the scope of the public subsidies, now rumored to include Liberty Bonds, Brownfield money and IDA bond financing. It is the later source of funds that has inspired NY Jobs with Justice to promote legislation, sponsored in the Assembly by Richard Brodsky, that would require a full set of hearings on the economic impact of this financing. Of particular interest, of course, is the cost per job of all the public money going into a project.

In the case of the Bronx Terminal Market, we would like to know what the total incentive package comes to, and what kind of job payback (subtracting those jobs lost as a result of the project’s collateral damage to other businesses), emerges from all this public generosity.

Eye of the Beholder

In the world of spin nothing is what it appears to be. For instance, under the headline “Related Wins Case,” the Crain’s Insider is reporting today that the real estate giant “has won its case against a five months old tenants’ rent strike at the Bronx Terminal Market.” The crux of the case, however, is the attempt of Related, EDC and the city to evict the tenants. By exchanging rent payments for a non-eviction policy it would be more compelling to claim that it is the tenants who emerged victorious from the first legal skirmish.

Crain’s does confirm that the certification of the Gateway project will be confirmed in the next month or so. At that point, the full scope of the development will emerge unveiling what Related has strived so hard for the past six months to conceal: BJ’s and the other non-union box stores planned for the Terminal Market site.

Thursday, May 19, 2005

Port Richmond Board of Trade Says no to Wal-Mart

We spent an interesting evening talking to the merchants from the Port Richmond Board of Trade. Like neighborhood retailers all over the city, they were concerned with the potential impact of the proposed Wal-Marts on Staten Island. As a result they voted to support the Neighborhood Retail Alliance’s efforts and oppose these developments.

What was interesting, we felt, was the concern these Staten Island businesspeople (and homeowners) felt over Wal-Mart’s lousy health benefits. They pointed out that the health care system on the Island is in crisis and flooding the community with more uninsured or underinsured workers would put an unfair burden on taxpayers. We believe that the fact that Wal-Mart receives taxpayer dollars to build stores and then is further subsidized vis-à-vis the number of its employees on public assistance (including their families) will be an especially salient sticking point on Staten Island.

Small Business Services?

The Department of Small Business Services, headed by Commissioner Dan Walsh, is supposed to enhance the ability of neighborhood stores to do business but the Commissioner also wears another hat: Commissioner of Employment. With these two hats Walsh gets transformed into the headless horseman. To wit: when the Fifth Avenue BID in Sunset Park was concerned about the impact of the IKEA project in Red Hook they got the clear message that Walsh, as employment honcho, disapproved because the project, he said, would generate jobs.

Wait a second commissioner. Did you evaluate if these jobs would come at the expense of existing store owners in Brooklyn? Using this logic we could easily see Walsh ("I’m just following orders") standing up in support of Wal-Mart and BJs. Certainly that’s a defensible position but not for someone entrusted with nurturing small business.

Weiner and the Drugstores

In what appears to be a version of man bites dog, Maggie Haberman is reporting in today's Daily News that Anthony Weiner raised $15,000 from neighborhood pharmacies after putting in legislation that would have permitted these small businesses to combine together for the purpose of reducing their insurance costs.

With the influx of chain drug stores, chain supermarkets with pharmacies, and box store pharmacy operations, it has become harder and harder for independent neighborhood drug stores to survive. Yet, there are still three thousand of these hardy souls still alive and well in New York City and they are a valuable resource for their neighborhoods. The Weiner story here is that we have an elected official looking to protect small business while the mayor seemingly has no clue about their very existence.

Wednesday, May 18, 2005

Staten Island Dems Support Wal-Mart Free NYC

Great news: the Staten Island Democratic Association officially endorsed the aims of the Wal-Mart Free NYC coalition last night at their meeting. The SI Advance reports.

Industrial Employment Districts

The New York Industrial Retention Network (NYIRN) is proposing a new form of zoning overlay, called an Industrial Employment District (IED), that would more ably serve to protect the integrity of industrially-zoned property from real estate speculators. The District would protect blue collar jobs by limiting activities in an area to production, distribution, storage and other related functions.

We enthusiastically support this concept which is now being evaluated by key City Council members. It is important to protect New York City’s manufacturing jobs which typically pay $10,000 more per year than jobs in retailing. In addition, we are of course concerned about the rampant urge of real estate developers to convert this vital manufacturing space into sites for big box stores. This was the essential variable involved in the 1996 fight over Mayor Giuliani’s megastore proposal.

It is important to also reiterate that food manufacturing, wholesaling and retailing, are part on an interrelated web of distribution. By relying on out-of-state suppliers, the introduction of box stores attacks this web at every level leaving the alleged job creation claims seriously in question.

Bloomberg en Español

The mayor’s initial Spanish language ads are interesting in one regard. It's not the fact that he's speaking the language but rather his assertion that his economic development efforts have created new jobs all over the city. This is the kind of thing that the Democratic candidates need to forcibly challenge. In particular, they need to underscore the manner in which Bloomberg’s development has proceeded at the expense of Black and Latino entrepreneurs.

Stadium Delay and the Velodrome

If, as many observers believe, the continual stadium vote delay, as reported by Charles Bagli in the Times today, means that an endorsement of NYC's 2012 Olympic bid is unlikely, then what does this mean for the land swap of the House of Detention to Related (in exchange for the much anticipated Olympic Velodrome)? Another question: Will City Planning certify Gateway without this question answered? What’s intriguing here is the apparent exclusion of the House of D from the Gateway ULURP. Doesn’t the land involved significantly change the scope?

And whatever did happen to DCP Commissioner Amanda Burden, a one-time supporter of a transparent and fair land use process? To paraphrase the great satirist Tom Lehrer: “Once a fiery liberal spirit, but now when she speaks she must clear it.”

Bronx Terminal Market: Evictions Put Off

Crain’s Insider is reporting today that the Bloomberg Administration and the Related Companies have agreed to put off evictions of the remaining 23 merchants until a Supreme Court hearing can be held on the legality of the city’s lease agreement. The Insider also cites the Alliance’s Richard Lipsky on the delay of the certification of the Gateway Project, which was originally planned for June.

The merchant’s lawyers have told us that EDC has not been forthcoming about the lease transfer between the old landlord Buntzman and the Related Companies. We hope that this and the other complex legal issues surrounding the market will be aired at the City Council’s June 27th hearing.

Tuesday, May 17, 2005

Ferrer on the Bronx Terminal Market

Hooray for Freddy Ferrer! When asked by Frank Lombardi about the Bronx Terminal Market he raises just the right questions about this so-called private deal. Maybe, since Weiner has already come out strongly against the deal and Gifford Miller has scheduled a hearing for June 27th (not May 27th, as Frank states in his article), this issue will be seen as symbolic of how the Bloomberg administration (read: Dan Doctoroff), does economic development. The issue of crony capitalism should be made part of this mayoral race, and soon.

A Bunch of Garbage

It’s been over two decades since New York’s infamous garbage barge cruised world ports, reminding us somewhat of the hopelessness of a refugee in search of a final friendly destination. While the barge cruises no more, the garbage issues that sent it on its journey remain with us today.

Errol Louis in his column in today’s Daily News discusses one troublesome aspect of the city’s current garbage problem: environmental justice. He is absolutely correct, as are the environmental justice folks who have brought this point forward, that three communities are unfairly bearing the burden of almost all of the city’s residential and commercial waste.

What he, and the groups that are pressing Gifford Miller on the opening of the 91st transfer station, fail to mention is that the key garbage issues New York is facing are:

1) Cost of export

2) Waste reduction

The enviros' smug satisfaction of having wealthier East Siders experience what the folks in Williamsburg, South East Queens and the South Bronx must go through everyday blinds them to the fact that the Bloomberg plan has no answer to the crucial issue of waste reduction and, because it fails on this score, condemns us to being prisoners of the export-landfill mentality whose cost increases exponentially as landfill space and the tolerance of other jurisdictions wane.

That is why the Alliance has been so vociferous on expanding the use of garbage disposers. We will post more on this but clearly reducing the smelly, putrescible (spoilable) waste and finding ways of controlling disposal in a self-sustained (read: non-export) manner is absolutely essential.

Final Thought: Mayor’s Recycling Prescriptions Called “Groundbreaking”

As part of the Mayor’s Solid Waste Management Program he is required to address how to increase the level of recycling. In the DOS report the administration’s proposals are called “groundbreaking” (bottom of page two) but in reality they are anything but. Aside from the usual refuge of the clueless: “better education,” there is absolutely nothing said on how to enhance recycling activity. In fact, the only way these proposals could be called groundbreaking is if the mayor is digging with a plastic spoon.

Monday, May 16, 2005

Box Store Moratorium and Study

After the defeat of BJ’s and Wal-Mart this year the labor/business/community coalition that has come together on the box store issue called for a moratorium on all box store projects until a full study could be done on the implications for New York City of the proliferation of these mega-retailers. With Gateway proceeding surreptitiously in the Bronx it is appropriate to reiterate the call for the full study.

The saliency of this issue was brought home by a pair of comments by two of our readers on our discussion of how the sales tax and business climate help drive business away. Their thoughtful comments and our response underscore just how complicated and important the entire question of box stores is.

Mayoral Candidates Weigh In

At this time we are requesting that all of the mayoral candidates weigh in and concentrate on the following key questions:

1) How will the proliferation of box stores impact local shopping and, in particular, the immigrant entrepreneurs that have come to characterize it?

2) How does the current tax and regulatory environment encourage the efflux of shoppers out of the city, and how would you address this problem?

3) Should we be concerned about the non-unionized nature of the box store workforce? What implications does the replacement of unionized workers have for New York City’s economy?

4) Most city roads and highways are already at capacity. What will the building of 25-30 new box stores do to the existing road infrastructure? If you support unfettered building, how would you deal with all of the additional traffic?

5) Should ULURP be changed? If so, how would go about it?

For more on the importance of neighborhood retail and the impacts of big boxes check out our testimony prepared for the City Council’s Economic Development Committee.

Ferry Flyers

The Advance reports on the efforts of the Wal-Mart Free NYC coalition to education Staten Islanders about Wal-Mart:

Besides the alleged detriment to small businesses, the fliers accused Wal-Mart of poor labor practices in regard to health care, discrimination against women and the disabled, and tax evasion.

"I don't think it's a good thing for Staten Island," said Michael Santorella of Port Richmond, who was clutching a flier while waiting for the next boat. "They don't seem to do the right thing, and I don't think I would shop there."

Martha Rohman of West Brighton agreed: "This company has a history of discriminating against its workers, especially women. I would be much happier if they never built it, and I'm glad there are people out here talking about how bad an idea it is."

Hat tip: Shaun Richman

Sunday, May 15, 2005

ULURP and the Bronx Terminal Market II

We have begun the process of evaluating the Environmental Assessment Statement (EAS) on the proposed Gateway Project at the gravesite of the Bronx Terminal Market. As we have already mentioned, the Related Companies is pushing to have this project citified as early as June. Indications are, however, that City Planning is not quite satisfied with the early traffic analysis done by the developer’s consultants, making early certification problematic.

The Economic Development Corporation held a public scoping session for the Gateway EAS on September 9, 2004. What an absolute joke! By now, EDC is certainly aware that a box store development of this kind is assured of generating significant business, labor and community opposition. What did the agency do to insure that all potential stakeholders were made aware of the of the environmental review process?

The only possible answer: very little. What generally happens, in the combined interest of secrecy, speed and expediency, is that notices are put into papers with as little fanfare as possible. The agency and the developer, stable mates from the beginning, are not interested in a comprehensive vetting process. There are, for instance, close to fifty independent neighborhood supermarkets and three regional chain supermarkets within the trade area of this project. Why not attempt to notify them and give them an opportunity to become involved in a review process for a project that will undoubtedly impact their livelihoods?

We’re definitely going to delve into this question some more but just a cursory evaluation underscores our earlier comments about the shortcomings of ULURP. Developers and their agency acolytes want to have the greatest possible freedom from scrutiny while they develop self-serving data that time and time again minimizes project impacts. As a result, once the ULURP clock is started, there is a race conducted in a hyper atmosphere where deliberation becomes virtually impossible.

The Gateway Project is over a million square feet of retail. Good public policy should have mandated that EDC conduct a series of public hearings that:

1) Outlined Related’s vision for the site

2) Clearly delineated who has been signed up as a tenant for the project

3) Gave all potential stakeholders an ability to not only testify but to also develop data to aid in the deliberation process

Who Attended the Scoping Meeting?

Aside from the participation of Community Board #4, only 5 people attended the scoping session (see page 2). More significantly, no businesses or their representatives who may be impacted by the project were informed. Neither were the labor unions whose members are employed in a great many of the local supermarkets.

Why is this Significant?

When Related’s consultant examines employment impact, how well will they evaluate collateral damage? Will we know, for instance, how many of the Gateway box stores are non-union? Will potential store closings be evaluated with an eye toward estimating the impact of the replacement of union labor with non-union labor? Will the ethnic composition of the competing stores be examined in order to evaluate if store closings will result in the replacement of immigrant entrepreneurs with out-of-town big box stores?

Loss of Local Retail and Wholesale Business

As we have examined in our report on the proposed Brush Avenue BJ’s, local business has a multiplier effect so that dollars are re-circulated with local suppliers and professionals. What will be the impact of Gateway on this variable? In particular, box stores like Wal-Mart and BJ’s will bypass local distribution channels. What will this mean for our wholesale markets at Hunts Point?

Warning to EDC and City Planning

The Department of City Planning and the EDC are running the same risk that they did when they tried to hotwire the proposed BJ’s development on Brush Avenue. We warn them that they shouldn’t make the same mistake again. Instead they must be more responsive to all concerned. To wit:

1) Don’t certify this project before a full public review of Gateway is conducted in a Bronx hearing sponsored by your agencies

2) Make the applicant publicly identify its tenants

Question on the House of Detention

One last question: How does a ULURP proceed on a piece of property that doesn’t appear to have been legally transferred to the developer?

Friday, May 13, 2005

Conservative Case Against Wal-Mart in NYC

Many Wal-Mart supporters focus on the “left-wing” nature of the opposition to the mega-retailer. The common rant usually attacks labor and drags out all of the standard anti-union stereotypes, none of which are particularly applicable to the locals of the United Food and Commercial Workers. After the attack on labor, however, the Wal-Mart partisans, particularly Steve Malanga of the Manhattan Institute, next go on to assail the “anti-development” ethos of Wal-Mart’s opponents. This line of attack is generally made by critics who characterize themselves as conservative.

These self-described conservatives are missing some fundamental aspects of the opposition to Wal-Mart in particular and box stores in general. On his blog, Stephen Bainbridge, a professor of Corporate Law at UCLA and backer of President Bush, brought this discussion to the forefront by enumerating a number of conservative arguments against Wal-Mart. We think it’s necessary to both localize and elaborate on Bainbridge's general thesis, one that we were reminded of after a recent visit with Republican New York State Senator Marty Golden who represents Bay Ridge and other generally conservative parts of Brooklyn.

We first became acquainted with Marty when, as president of the Fifth Avenue Merchants Association (he owned the Bay Ridge Manor at the time) we were involved in efforts to block suburban style shopping centers. The relationship grew when a plan was floated, circa 1996-97, to build a mega-retail project called “Brooklyn Junction” over the railroad tracks at 60th Street in Bay Ridge. Marty led the opposition, organized the community and successfully recruited Governor Pataki to veto the whole idea. He did so in what is arguably the most conservative electoral district in New York City (An interesting footnote is that Rudy Giuliani, the megastore cheerleader par excellence, was dragged along in opposition to the project).

What this points out is that there is a strong conservative undercurrent, one that we believe will also manifest itself on Staten Island, against over-development and mega-development. Pundits like Malanga, Richard Schwartz of the Daily News and Greg David of Crain’s underplay the importance of small business, particularly neighborhood retail, to the quality of life in a community and as a result fail to grasp the true nature of opposition to companies like Wal-Mart. This type of opposition manifested itself in the Alliance’s first effort (circa 1981) where the communities of Zarega, Morris Park, Throggs Neck and Pelham Bay joined forces with their merchants to defeat a suburban mall project promoted by Arnold Spellum of the Westchester Creek Development Corporation.

In the twenty five years since, we have seen Forest Hills, Mill Basin,
Canarsie, Astoria and Laurelton, which is comprised primarily of middle class African-Americans, rise up in (mostly successful) opposition to the malling of New York City. This city is one of distinct neighborhoods and the people who
live in them are deeply concerned with preserving the kind of quality
of life that Wal-Martization would kill forever.

The “neighborhood character” argument may seem unduly quixotic but for those who grew up and currently reside in one of the city’s many neighborhoods this line of reasoning is anything but misguided. For conservative Wal-Mart supporters who have never lived in an urban atmosphere it is difficult to comprehend the importance of walk-to-shop commercial strips, “mom and pop” shops, and the general aversion to suburban-style developments. Unlike in other parts of the country where malls and box stores are generally located in separate, far away commercial centers, in New York most large developments will, de facto, be located in close proximity to a number of residential neighborhoods. Thus, due to New York’s unique urban nature, New Yorkers like Senator Golden, City Councilman Denis Gallagher, and mayoral candidate and former councilman Tom Ognibene – people we term “Neighborhood Conservatives” – oppose large developments like Wal-Mart because of a traditionally conservative emphasis on a local community’s economic and social vitality.

Specifics of the “Neighborhood Conservative” Argument


The Neighborhood Retail Alliance and our many supporters who identify with this preservationist perspective understand that neighborhood retail is more than just friendly, personalized service (though this is certainly important). The argument that is often overlooked by big box proponents, is the fact that locally-owned businesses are generally of greater overall value to a municipality than national chain stores. As we have commented on earlier, studies by groups like Civic Economics and the Institute for Local Self Reliance have constantly proved that locally-owned retail provide more of an economic multiplier effect to an area than comparable chain stores. For example, a study in Andersonville, a neighborhood in northern Chicago, showed:
- For every $100 in consumer spending with a local firm, $68 remains in the Chicago economy.
- For every $100 in consumer spending with a chain firm, $43 remains in the Chicago economy.
- For every square foot occupied by a local firm, local economic impact is $179.
- For every square foot occupied by a chain firm, local economic impact is $105.

Consumers surveyed on the streets of Andersonville strongly prefer the neighborhood retailers over the proliferation of common chain stores.

- Over 70% prefer to patronize locally-owned businesses.
- Over 80% prefer traditional urban business districts.
- Over 10% of respondents reside outside the City of Chicago.
The Chicago study – replicated in Austin, Texas and in Maine – only confirms what common sense dictates: local stores stretch the dollar by utilizing other local businesses (banks, graphic designers, wholesalers, accountants, etc…) while also giving to local charities and advertising in local newspapers. Furthermore, the owners of these independent businesses are often homeowners in the community, pay a variety of additional taxes, and in general strengthen the foundation of a neighborhood. This multiplier effect does not occur with out-of-state chains that rely on suppliers and service providers from outside the community and run operations from a national company headquarters.

Tom Ognibene, the aforementioned Republican mayoral candidate, sums up the fiscal importance of local business during an interview with a Slant Point, conservative NYC blog:

QUESTION 9: You said you are against big-box stores like Wal-Mart coming to NYC. Why?

TOM OGNIBENE: As counsel to State Senator Maltese in the late 1980's and as a Council Member in the 1990's, I recognized how important it was for the continued viability of our neighborhoods to have accessible, varied and full service "mom and pop" stores along our commercial strips.

In 1988, Mayor Dinkins changed the tax class for most mom and pop stores from tax class 1 to tax class 4, causing massive tax increases, abandonment and store closings became prevalent.

Fresh Pond Road in my community, between Myrtle Avenue and Metropolitan Avenue saw 31 stores closed. We saw only "roll down" gates covered with graffiti. The economic and social impact was devastating.

Senator Maltese and Assemblyman Friedman of the Bronx were able to reverse the process and the revival brought a new level of stability and revitalization to our communities.

While big box stores like Wal-Mart may offer an initial economic benefit to consumers, once they have eliminated their "mom and pop" competition their prices move upward to "market value". This kind of predatory pricing has devastated communities in other states. Our outer borough communities are held together by the combination of suburban style residential living together with immediate access (in most cases, walking distance) to local retail outlets. It is at the core of our community oriented lifestyle and I'd like to preserve it.
Quality of Life (Traffic, Crime, Transiency, Property Values)

While crucial, economics is not the only factor in the Neighborhood Conservative’s argument against Wal-Mart and other big boxes. As Ognibene mentions, these mega-retailers are also a threat to a highly valued “community-oriented lifestyle.” This threat is more than the potential loss of smaller, neighborhood retailers; it also includes the numerous negative side effects associated with suburban-style developments that can exceed 500,000 sq. ft.

Travel through most of New York City’s neighborhoods occurs on 1 or 2 lane main streets that are often unable able to accommodate the type of traffic generated by big box stores like Wal-Mart. The city’s roadways are already at capacity and perpetually gridlocked. The addition of 50,000 weekly car trips to a big box destination has the potential to exacerbate this problem further, making travel within a neighborhood nearly impossible.

This situation can already be seen in the overdeveloped south shore of Staten Island where, according to the Staten Island Chamber of Commerce, roadways are currently at or near capacity. This is the same area where Wal-Mart is proposing to build a 150,000 + sq. ft. store! It must be remembered that immobility due to an overburdened road system is not only annoying but comes with a number of attendant social costs such as decreased productivity due to vehicle congestion and higher levels of traffic mishaps, increased pollution and asthma, and lowered emergency vehicle response time.

Another consequence of large, sprawling development is an increase in transiency and crime. Big box stores draw large populations from outside a neighborhood (they are unable to turn a profit from local shoppers alone) which inevitably means unfamiliar motorists navigating residential streets and posing a danger to pedestrians. These outside-the-neighborhood consumers also are drawn to the “one-stop shopping” nature of the big box and therefore rarely frequent other community businesses.

More important, perhaps, is that in addition to being a magnet for shoppers, Wal-Mart and other big boxes also attract numerous shoplifters and other criminals. As articles from all around the country have demonstrated, when a Wal-Mart is built, the crime rate goes up due to increased shoplifting prosecutions and the higher likelihood of other, more serious crimes. It should be no surprise that residents of a neighborhood where a big box wants to site are predictably unsettled by the potential influx of both out-of-the-neighborhood shoppers and criminal elements.

One final concern of neighborhood residents close to a proposed big box site is that lower prices are not worth the decline in both business and residential property values. There are two reasons for their worry. First, because Wal-Mart leads to the closure of surrounding businesses the property values on those commercial strips decrease (Q4 and Q5) as more and more establishments remain vacant and boarded up. Second, it has been shown that when a Wal-Mart is built close to a residential neighborhood, the property values of those homes are put in danger and people are more apt to move. Large box stores do not complement residential spaces and have, due to their unsightliness, traffic draw, and 24 hour operation, made the adjoining neighborhood less desirable to live in.

Both of these impacts will be aggravated in New York City due to the contiguity of potential big box sites to our residential neighborhoods and commercial strips. If the city’s walk-to-shop business districts atrophy because of the impact of box stores, the property values of residences will inevitably decline along with the nearby commercial blight.

This commercial/residential proximity also means that big boxes in the city are much more likely to be built close to people’s houses, contributing to the residential property value declines cited above. For example, the proposed Wal-Mart in Richmond Valley is extremely close to a middle class housing development. We have spoken to community residents who have said they would consider selling their homes if a Wal-Mart was built nearby.

The Neighborhood Conservative would argue that lower prices are certainly not worth the potential erosion of the vitality of residential neighborhoods and the attendant loss of an important tax base. New York should learn from the research and experiences of other cities that point to how overdevelopment of commercial property can simultaneously harm the housing market and disrupt valued community lifestyles.


An unencumbered free enterprise system is a fundamental tenet of conservative ideology. Within the parameters of this system it is expected that the development of successful businesses will lead to greater wealth and individual self-sufficiency. The use of government subsidies, in this world view, is only justified if it can be demonstrated that the public largesse is actually stimulating additional economic growth and is not being used in an unfair and anti-competitive manner.

It has been demonstrated, however, that questionable subsidies – in various forms – are an integral companion to big box construction. This is an issue that should concern all free market conservatives, and the presence of subsidies in a development package should undermine conservative support (or at least enthusiasm), for any project. Multi-billion dollar companies should not need millions of dollars of government incentives in order to build their stores.

According to a comprehensive analysis done by Good Jobs First, Wal-Mart has received over $1 billion dollars in tax breaks, infrastructure improvements and other incentives for 250 stores and distribution centers. Imagine what the total dollar value is for the chain’s 3500 U.S. locations! These subsidies are not only unfairly distributed – small business is rarely offered proportionately similar deals – but their impact is rarely analyzed by the municipalities doling out the money. When an analysis is done, however, all signs point to the fact that the subsidies rarely deliver the benefits that are initially ballyhooed.

These pre-construction instances of largesse are compounded when we examine how companies like Wal-Mart disproportionately burden public safety net programs such as Medicaid. Some conservatives, failing to see past ideological blinders, may argue that the chain’s low wages are strictly a business matter. This argument is weakened, however, when we consider the impact these low wage/low benefit workers have on the taxpayer.

In 14 states across the country, Wal-Mart employees and their families are the largest (not proportionally as spokespeople suggest) users of the public health care system. In Georgia for example, over 10,000 children of Wal-Mart associates utilize the PeachCare program. The costs of paying for the health care of corporate employees, not to mention subsidizing additional low-income benefits such as free and reduced lunches, housing assistance, and energy assistance, profoundly troubles Neighborhood Conservatives. Remember, it’s not that these programs are unnecessary but we should be doing everything we can to get people out of them and into lifestyles that are self-sustaining.

Before moving on to a third way that the taxpayer supports Wal-Mart it is important to note that one criticism of the health care point is that these workers were unemployed and already using public assistance prior to being hired. Even if one assumes that the critics are right, and we’ve never seen the evidence to prove it, there is still a major flaw in the argumentation.

Job creation is markedly less valuable if the position being created doesn't completely remove a person from the government dole. It is even less so if the job that is “created” is done so at the expense of higher quality work lost when a Wal-Mart competitor is put out of business. As an editorial in the St. Petersburg Times pointed out, why should taxpayers support Wal-Mart when the jobs it creates requires even more taxpayer assistance? Instead of defending Wal-Mart’s reliance on public health care by saying new hires were already using it (or by saying “it’s retail, what do you expect”) conservatives should be encouraging the creation of jobs that will completely end a person’s reliance on public subsidization.

Lastly, Wal-Mart’s drain on public infrastructure (roads, police, health services), though not necessarily direct subsidies, are an important price a city pays to have the store within its borders. As mentioned earlier, because Wal-Mart attracts more criminals and ardently prosecutes every offense the police become burdened with responding to these calls. As a result, it becomes necessary to hire more police or allocate additional amounts of an officer’s time to Wal-Mart. This issue is especially pertinent to Staten Island where the public is understandably clamoring for a 4th police precinct to help protect a burgeoning population. Does it make sense to support a project – and to subsequently demand that the taxpayer foot the bill – that will strain services that are already drastically below where they need to be?

The box store also puts a tremendous strain on public roadways and streets that are often not equipped for the tremendous rise in traffic. It then becomes the city’s responsibility to pay for improvements necessitated by the activity of one store. Also, as we have pointed out, this traffic congestion increases the time it takes to get to work, the number of asthma cases, the amount of pollution and leads to a variety of other consequences all of which end up costing the tax payer.


Often, when small businesses and community groups voice their opposition to Wal-Mart critics respond that they are anti-competition and going against the very nature of the free enterprise system. The Alliance and other Neighborhood Conservatives argue exactly the opposite: it is Wal-Mart that is the real threat to the healthy competition necessary for vibrant neighborhood economies. Right off the bat, the large and varied subsidies that the chain receives puts it at an automatic competitive advantage vis-à-vis small business. We are baffled when people who purport to be fiscal conservatives fail to object to this financial largesse and, compounding the error, also fail to realize how the resultant skewed playing field has made real competition illusory.

More generally, Wal-Mart’s guiding philosophy as well as the public's finanical support for its developments should vex true champions of healthy competition. As more and more small businesses, supermarkets and other retailers are put out of business, competition inevitably declines as the chain becomes the only game in town. Exacerbating closures is Wal-Mart’s saturation policy of flooding new markets with numerous stores even if these stores end up cannibalizing each other. This desire to beat one’s competition is understandable, but when the results are monopolistic in nature two dangers manifest: Wal-Mart can now set its prices higher, and towns become increasingly reliant on a sole establishment for their sales tax revenues. If that same only game in town Wal-Mart decides to leave, as in the case of McGehee, Arkansas, the municipality often finds itself barren and destitute.

Concern about the concentration of power should not be restricted to the conservative fear of big government. Concentrated private power should also be a worry and the impulse to curb monopolistic behavior in this country has a noble conservative pedigree. Certainly, the Robinson-Patman Act, designed to protect local grocers from the rapidly expanding A&P, emerges from a Neighborhood Conservative world view.

The impetus behind that act was the ample evidence of predatory pricing. The pricing of goods below wholesale cost may be an initial boon for consumers but the long term affects of having businesses wiped out by temporarily fixed low prices is only going to be deleterious and-anti-competitive. From Oklahoma, to Wisconsin to Arkansas, to Germany, Wal-Mart has shown the will to destroy its competitors by lowering its prices to uncompetitive levels and, as Ulf Boge, director of Germany’s cartel office, remarked, “The benefit to consumers is marginal and temporary, while the damage to competition through illegal obstruction of small and medium-sized companies islasting and significant.”

Unfortunately, the type of anti-trust law necessary to protect consumers from these practices have been watered down or completely removed over the last couple of decades but the Neighborhood Conservative should nonetheless remain vigilant in protecting true competition, not the self-serving Wal-Mart variety.

Don’t people leave the city to shop at Wal-Mart already?

One of the stronger points raised by pro-Wal-Mart forces is that New Yorkers are already leaving the city to shop at Wal-Marts so why not build them here to capture those retail dollars. It must be noted that there's no evidence showing that new retail developments increase the overall dollars being spent in a city; they instead redistribute money already being spent at other establishments. Or, as author Al Norman likes to say, building more supermarkets does not make people hungrier. Therefore, the “Wal-Mart as an economic boon argument” is only somewhat valid if it can be shown that building the store will stop shoppers from leaving New York City, stemming the so-called leakage of dollars that would otherwise be spent within our borders.

Wal-Mart’s cheerleaders do a good job at pointing out that people leave the city to shop but fail to establish a causal link between this exodus and the need for box stores. It may seem self evident that if people shop at a Wal-Mart in New Jersey they would inevitably shop at a closer Wal-Mart in the five boroughs. But no supporting evidence, other than anecdotal, has been offered. In other words, no thorough, independent study has been conducted to demonstrate exactly why people leave to shop in Jersey, Long Island or the northern suburbs. In our opinion, though the issue of leakage seems simple on the surface it is, in fact, much more complex and begs to be more professionally examined.

Until this type of analysis is conducted, we’d like to offer some educated guesses that show that this phenomenon may not be stopped by building Wal-Mart stores in New York City. We have talked to a large number of people who shop in New Jersey and their common rationale is always the tax differentials.

As we’ve pointed out in a previous post, Staten Islanders and other New Yorkers can not only save on the sales tax, but can buy cheaper gas, don’t have to pay a deposit on their bottles and can steer clear of Mayor Bloomberg’s unprecedented cigarette tax increase. In fact, Mayor Giuliani was fond of pointing out that we were losing $700 million in revenues every year to New Jersey because of the drastic in sales tax disparity.

Do Wal-Mart backers really think that building one of their stores here will reverse the trend? According to the Staten Islanders we’ve spoken to, they will continue to cross the bridges, especially now that a Supercenter was approved in Edison, NJ, 3 miles away. The prices will still be lower and the convenience factor of a NY store will be drastically diminished by the fact that, due to traffic congestion, it will probably be faster to get to Jersey than navigate the local roads.

Therefore, we question how many New Jersey-bound shoppers will actually be captured at a New York Wal-Mart. Instead, we believe that a great influx of shoppers at a Staten Island Wal-Mart will be people from Brooklyn. In that scenario, shopper dollars would not be kept in the city but simply redistributed. Clearly, absent rigorous empirical analysis, the pro-development argument remains unproven and precariously self-serving.

In the case of Westchester and Long Island the tax issue is definitely not as relevant but there are solid reasons to wonder if box stores will stanch the economic bleeding. The irony may be that New Yorkers want to preserve their communities and neighborhoods with their unique blend of smaller, walk-to-shop retail and quiet residential living, while at the same time wanting the benefits that suburban malls afford. They may be quite content to allow the suburban sprawl to remain accessible but not overly close by and threatening. Or in the words of Zarega’s legendary Artie Felice: “If you want a bargain, get in your car and drive to the bargain. Never put the bargain in your neighborhood.”

It is also very possible that Queens residents enjoy leaving the city on weekends to do some shopping and catch a movie at one of the large malls in Nassau county. Would this trend be reversed if a Wal-Mart was built in the city? Once again, this is a hypothesis in need of testing. In essence, we are saying that when price discrepancies are less of an issue there still are factors that affect people’s choices and point to how a NYC-based box store may do little to stop the efflux after all.

Improving the Business Environment

The question of box stores and the loss of retail dollars can’t be fully addressed, particularly from a conservative perspective, without also analyzing New York City’s business climate. We at the Alliance believe that it is inherently unfair to promote local box store building without first addressing this city’s severe anti-business climate.

Put simply, New York’s tax and regulatory burden makes all local stores less competitive. Improving the overall business climate, then, should precede the promotion of box stores because, as we have argued elsewhere, the enhancement of locally-based retail has intrinsically greater value than any proliferation of box stores and mall could possibly have. To base the argument for building a Wal-Mart on the inadequacies of local stores becomes one of the more vivid examples of blaming the victim.

Localization of Power: Real Community and Neighborhood Input

A final point is that Neighborhood Conservatives, like conservatives nationwide, generally espouse a theory of limited government where decisions are often best made by local representative bodies. However, in New York City the land use process consists of an inadequate, truncated form of public input and is more likely to be the imposed scheme of a developer or economic development official than representative of true community desires. In addition, local community boards are too often packed with politically connected cronies and do not adequately represent true neighborhood sentiment.

It is also true that the community is not given the resources to adequately analyze the real impacts of a project. All the data is generated by consultants, hired by a developer, who cavalierly underestimate traffic and economic impacts. The mandated land use review clock creates an artificial hyper-atmosphere that is not conducive to rational evaluation.

Even this innocuous kind of oversight, however, was deemed too onerous by the developers and their big government acolytes who wanted to remove any local input in order to insure that all land use decisions be made at City Hall. What could be less conservative than the policy, advanced by former Mayors Dinkins and Giuliani, of removing from review scores of megastores that would have impinged on almost every neighborhood in the city? This is precisely why the policy was resoundingly defeated by a small business/civic group coalition in 1996. As the Times and Newsday reported the plan was “Defeated in the Nabes.”

Yet, as conservatives and liberals alike have pointed out, neighborhoods are viewed by economic and social planners as fossil relics, outdated in a world where concepts like a global village and international community have gotten great cache. According to Morris and Hess, authors of Neighborhood Power: The New Localism, “The Neighborhood, if not simply scoffed at in this new globalism, is actually reviled and rejected” (3).

However, it is precisely in this global age of great technocratic government and mega, multi-national corporations, that neighborhoods make the most sense. They do so because they have the capacity to embody real human interaction. Morris and Hess continue, “Most persist, and all could be revived, for the simply practical reasons of making life livable and resolving problems which have remained untouched by the movement toward huge, dehumanized scale in social organization, economic organization and in the organization of resources and technology” (5).

Neighborhoods create a social space that has the capacity to overcome isolation and alienation and create a real sense of community. Within its borders people are not viewed (as in everyday low prices) through the exclusive lens of the cash nexus. It is precisely the array of neighborhoods that makes New York City the unique place that it is. The proliferation of box stores is a direct threat to this communal context.


The concept of the Neighborhood Conservative is crucial to understanding the opposition of many New Yorkers to the construction of Wal-Mart and other big box stores. It is important to note that this conservative case against Wal-Mart may not apply (at least in totality) to every single proposed site in New York but is an essential argument nonetheless. It is a line of reasoning that complements other, more “liberal” Wal-Mart critiques regarding wages, worker treatment and discrimination but also stands alone as a powerful defense of the important relationship between local business and New York City’s many vibrant, unique neighborhoods.

Krugman: Always Low Wages Always

NY Times Columnist Paul Krugman writes about Wal-Mart is his column today:

In 1968, when General Motors was a widely emulated icon of American business, many of its workers were lifetime employees. On average, they earned about $29,000 a year in today's dollars, a solidly middle-class income at the time. They also had generous health and retirement benefits.

Since then, America has grown much richer, but American workers have become far less secure.

Today, Wal-Mart is America's largest corporation. Like G.M. in its prime, it has become a widely emulated business icon. But there the resemblance ends.

The average full-time Wal-Mart employee is paid only about $17,000 a year. The company's health care plan covers fewer than half of its workers.


I'm not trying either to romanticize the General Motors of yore or to portray Wal-Mart as the root of all evil. GM was , and Wal-Mart is, a product of its time. And there's no easy way to reverse the changes.

What should be clear, however, is that the public safety net F.D.R. and L.B.J. created is more important than ever, now that workers in the world's richest nation can no longer count on the private sector to provide them with economic security.

When they reach 65, most Wal-Mart employees will rely heavily on Social Security - if the privatizers don't kill it. And many Wal-Mart employees already rely on Medicaid to pay for health care, especially for their children.

Response to "Hypocrisy of the Wal-Mart Bashers"

Adrianne Shropshire, Executive Director of New York Jobs With Justice, a supporter of the Neighborhood Retail Alliance, writes an excellent response to Alicia Colon's misinformed editorial on Wal-Mart (scroll to the bottom of the NY Sun's page):

Furthermore, critics never claimed that Wal-Mart fails to hire women. The question, instead, is whether the women Wal-Mart is hiring are given fair wages and an equitable chance at advancement.
As the court depositions and expert testimony show, this was not the case. According to expert witness Richard Drogan, women who work full-time at Wal-Mart earn $5,000 less than men in the same position. He further concludes that women earn $1.16 less than men do in hourly positions and that women were systematically under-promoted. Former and current employees back up the data with affidavits pointing out how newly hired men often made significantly more than their experienced female counterparts and how women, due to the camaraderie between male managers and male employees, weren't told about otherwise poorly publicized advancement possibilities.
Adrianne has let us know that this paragraph was edited out:

As an African American woman I am offended by the tone Ms. Colon takes when referring to “ghetto people”. More than half of the participants at the Mother’s Day press conference were people of color, including council members, representing communities that deserve more than poverty-level wages and benefits. Low priced products can never make up for Wal-Mart’s discriminatory practices or the attitude of people like Ms. Colon that suggest that people of color should be happy with whatever job they can get.
You all should also check out the Health Care Security Act, a piece of legislation Jobs with Justice is pushing that would level the playing field for responsible businesses in terms of health care.

Letter From a Reader

From reader Mary Campbell Gallagher:

Hats off for your excellent post on ULURP. The head start enjoyed by the paid experts developers retain to do Environmental Impact Statements is nowhere better illustrated that in the Ikea-Red Hook litigation, now in State Supreme Court. As the press release we posted today indicates, the developer's FEIS in that case leaps from unsupported premises to unrelated conclusions, whether about traffic, about impacts on the neighborhood, or about the likely effects of the Ikea project on local retailers. The press release is at on my blog, at http://www.BigCitiesBigBoxes.com.

You may also enjoy reading my Newsday op-ed on the big boxes, "Superstores Come With Too High a Price." I summarize the economic research showing that big box stores do not create jobs, they destroy jobs.

Good Jobs New York and Corporate Welfare

Errol Louis's newest column highlights the important work of Good Jobs New York, a watchdog organization that tracks the type and amount of subsidies doled out to large corporations. We have worked with Bettina and Stephanie and can personally attest that their efforts are crucial to exposing incredible amount of public tax money given to corporations. In fact, their parent organization's report on Wal-Mart is a must read.

The notion of luring multi-million and billion dollar businesses via tax abatements and other goodies has always been something that has irked us. Often, public monies are heaped upon out-of-state developers whose projects will hurt or destroy indigenous business. Moreover, these same business incentives are either not as readily available to small business or not publicized.

In the case of the Bronx Terminal Market, the City has demonstrated an incredible largesse vis-à-vis Related in a deal that may result in the displacement of 23 predominately minority entrepreneurs and their unique ethnic market. Not only will the developer receive $80 million in Liberty Bonds, but if the project fails to garner the necessary approvals the city will buy back the property!

This same situation occurred during the Giuliani Administration when we fought a Pathmark in East Harlem. Here too, the developer was being lured with a corporate welfare package due to the promise of job creation. However, just like with the current Wal-Mart situation, the Pathmark proponents failed to consider whether this promised job creation would offset the job loss at the surrounding (mostly Hispanic) supermarkets and whether the idea of subsidies was even appropriate.

As Louis mentions, there has been very little oversight after subsidies have been granted and little analysis to determine if it was wise to spend the public money in the fist place (in part due to poor transparency). However, this New York Times article from 2003 starts to dissect the question of whether tax incentives are worth it:

A huge, light-gray building, trimmed jauntily in blue, rises from the rolling, grassy fields on the far side of the runways at Indianapolis International Airport. From the approach road, the building seems active. But the parking lots are empty and, inside, the 12 elaborately equipped hangar bays are silent and dark. It is as if the owner of a lavishly furnished mansion had suddenly walked away, leaving everything in place.

That is what happened. United Airlines got $320 million in taxpayer money to build what is by all accounts the most technologically advanced aircraft maintenance center in America. But six months ago, the company walked away, leaving the city and state governments out all that money, and no new tenant in sight.
Corporations that receive subsidies, unlike small businesses, have very little incentive to stay in the area if times get rough or if a better deal comes from somewhere else. More generally, we must start asking whether these subsidies are fair and, in the end, make economic sense? It is imperative to support the work of Good Jobs New York and in general impress upon our elected officials that enormous public subsidies, especially for projects that kill other business, have no place in New York City.

Thursday, May 12, 2005

Keeping out Wal-Mart = Rise of Nazism?

According to the Arizona Daily Sun:

Campaign ads bankrolled by Wal-Mart and depicting a Nazi-era book burning are offensive and backhanded, say some Flagstaff citizens and veterans.
Backers contend they are a justified reminder of the need to protect freedoms.
The newspaper ads contend that Proposition 100's restrictions on big-box retailers are an infringement of constitutional freedoms. The message has been conveyed through a blurred photo of a Nazi book-burning taken from the U.S. Holocaust Memorial Museum archives and a close-up of a person's mouth covered with tape.

Accompanying the ads is the statement: "Freedoms worth keeping," and references to the proposition as limiting choice.

But wait it gets more ridiculous:

Tom Farley, a consultant for Protect Flagstaff's Future, the campaign that sponsored the ads, said they will continue because they "make people think."

"If people are talking about the ads, they're doing a good job. People are giving up a freedom if they vote yes on Prop. 100. What will they be asked to give up next?"

Hat tip: JR Monsterfodder

Comparing legitimately concerned businessmen, community groups and citizens to Nazis certainly is a new low, even for Wal-Mart. Wal-Mart should publicly apologize for this defilement of the memory of the Holocaust and withdraw these ads immediately.

The Nation and Liza Featherstone

Thanks to The Nation's Peter Rothberg for mentioning the Neighborhood Retail Alliance's new website and blog. In the same post he highlights a couple of good short articles by Liza Feathersone, one on the possible political fallout of supporting Wal-Mart and the other on the affect of bad publicity on Wal-Mart's stock prices.