Costco's West End

The NY Sun picks up the Costco story this morning, and the criticism continues to mount concerning the store's location and its potential impact on traffic and small business: "A plan for a Costco store in a Manhattan West Side residential project is drawing opposition from local elected officials, labor unions, and community groups, who may block the outlet from opening at a time when New York consumers could use the access to the lower prices available at the discount chain."

This is, of course, deja vu all over again; plans to put the big box store on the West Side were thwarted in 2000 when various community/business and labor coalitions successfully fought the store's efforts. AS the NY Times reported at the time: "It isn't easy to plop a giant store that sells 36-roll packages of toilet paper into a congested city neighborhood. So Costco, the national wholesale club, thought it had a winner last summer when it came up with a model tailored for the Manhattan market. The company called it Costco Fresh and said it would specialize in food products...But as often happens in neighborhoods slated to get a so-called big-box store, community leaders in Manhattan gave Costco Fresh the kind of welcome they might normally reserve for the West Nile virus."

One of the community leaders who helped lead the fight was Hells Kitchen advocate John Fisher, Fisher countered the arguments of Costco's CEO Jeff Broutman: "But John Fisher, president of the Clinton Special District Coalition and one of the leaders in the anti-Costco campaign, said Mr. Brotman was missing the point. ''He didn't understand New York,'' Mr. Fisher said. ''It's not that people don't want lower prices.'' He said opponents were concerned about the traffic the stores would generate, the impact they would have on smaller stores, the $40 membership fee, the policy against accepting food stamps and Costco's nonunion labor force."

The Alliance was also there, and will be once again in today's fight. We worked with Fisher at the time: "Richard Lipsky, a lobbyist... fought Costco Fresh on behalf of the United Food and Commercial Workers Union and a group of independent supermarkets known as the Neighborhood Retail Alliance..." At a time when the city is looking to preserve supermarkets-particularly in Manhattan-the siting of a 150,000 sq. ft. store selling goceries in the middle of Manhattan will de-stabilize an already unstable retail environment.

We will not be alone in our opposition since area elected officials such as council member Gale Brewer and Assembly member Linda Rosenthal have vowed to fight the store. As the Sun points out: "The district's City Council member, Gale Brewer, is voicing objections to the proposed store, and the chair of the council's zoning committee, Tony Avella, says he would likely oppose the plan as well. The development requires the area to be rezoned, meaning that the council, which typically defers to the affected district's representative, would have to approve the inclusion of the store."

And considering that the mayor has just finished trying to promote congestion pricing it's hard to see his support for an auto-dependent box store on 11th Avenue. Brewer agrees: "Ms. Brewer said Costco raises particular concerns because it relies on bulk purchases for the majority of its business, so using a car is the most convenient way to carry goods from the store. "I can't even imagine it," Ms. Brewer said in an interview yesterday. "I assume you need a car to go to Costco, and I thought we were promoting public transportation and bicycles and greening. Already, if you drive in that area now around rush hour you can't cross 72nd Street for 20 minutes."

John Fisher underscored some of these points eight years ago for the Gotham Gazette: "Real Estate Weekly recently reported (Dec. 1, 1999) that superstores often have profit expectations of $1,000 per square foot (per year). At 70,000 square feet, Costco might expect gross revenue of $70 million/year or $1.3 million/week. How many cars or neighborhood walk-in shoppers would be needed to meet that number? Of course, numbers can be crunched any number of ways, but here's something to chew on: If all patrons are walk-ins with an average purchase of $20, about 65,000 people per week would tromp over to Hell's Kitchen Costco. Has anyone bothered to tell Costco that there aren't that many people in all of Clinton/Hell's Kitchen? Who benefits and who suffers the burden?" And that was for a "scaled-down" Costco.

The one being proposed today is twice that original one in 1999; and unions that have touted Costco for its more friendly labor policies can't see the logic of the store's current proposed location: "The director of special projects for UFCW Local 1500, the grocery workers' union, Pat Purcell, said Costco is "clearly the lesser of evils" among warehouse chains, noting that anti-Wal-Mart groups sometimes held it up as a model big box company. Nonetheless, he warned that the store's location would displace small businesses and cause congestion in the area. "It's less about which retailer and more about the retail model and the location being inappropriate," Mr. Purcell said in an interview yesterday. "I can't see people going for it."

This will be one interesting fight, and on the heels of the congestion tax battle, the real wonder will be where the mayor will situate himself. He supported the mega mall off the Major Deegan on "Asthma Alley," but that was before his greening. This will be the first auto-dependent box store test after the mayor has staked out his congestion position. Stay tuned.