TagWal-Mart

The seventh day wasn’t a day for rest, it was a day to sell bicycles

You won’t find this chopper bike at any shop. Photo by Seth Anderson. 

A friend of mine works in a local bike shop (read: not a chain store, not a department store) so I get to hear stories about the kinds of bikes people bring in for repair, and when he sells someone a brand new, or new used bike. It’s cool to hear about people getting on bikes again, or replacing their own in decent condition with a new one that runs smoother and perhaps a little faster.

I sent my friend this text message today:

And on Day Seven, God created the local bike shop and said, “Get thine brothers and sisters on bicycles”.

I later added that it wasn’t God who created “Mart bikes” (the bikes sold at Target, Walmart, and other department stores with names like Magna and Roadmaster). Satan created these hunks of junk. Their main attraction is their $89 price with 1 penny shipping. But to make a bike that cheap, every corner has been cut. It will rust faster, break down faster, become disabled faster. Unfortunately, this is not intuitive or well-known to potential buyers of these machines.

And as my bike shop friend tells me, they usually cannot be fixed. They use proprietary parts, or will cost so much to fix, the person could get a used bike from the shop!

Other shortcomings of “Mart bikes”: no one is at the store to help find one the right size, or fit the brake levers, seat post height, or saddle angle to your body. Bikes are misassembled. My friend told me that a customer came in with a brand new “Mart bike” and asked the shop to make sure it was assembled correctly.

If you’re in Logan Square, I know some great bike shops: The Bike Lane (2130 N Milwaukee) and Boulevard Bikes (2535 N Kedzie).

N.B. I’d prefer that department stores don’t sell bicycles. I’ve thought of a few ways to change situation and ensure people ride quality bicycles that they enjoy. Riding a bicycle that later breaks down discourages some riders from correcting the issue, thus stopping them from riding a bike again. One of those ways is to hire a local bike shop to staff the bike department in the store on weekends (and sales would only occur on weekends). The staff would find the right bike for the buyer, and fit the bike to the buyer. Another idea is to ban certain kinds of stores from selling bicycles unless they meet certain requirements, like bikes were assembled by a certified bike mechanic.

Del Valle on Walmart stores and good governing in Chicago

This is juicy. I went to a friend’s house tonight (along with 40 other people) to hear and talk to Miguel Del Valle, candidate for Chicago mayor (the election’s on February 22). After he talked about his issues, we asked him questions on different issues or to expand on what he said earlier.

Someone in the audience asked about Walmart in Pullman. I’m not sure of the exact question, but Miguel answered: “I support a living wage. If I was mayor, I would not have vetoed the ‘big box ordinance’.” (Mayor Daley initially supported the big box ordinance that would have set a minimum wage for workers in stores of a certain square footage but vetoed the bill after it was approved by the city council.)

Not wanting to lose an opportunity to talk about such a contentious issue (now quickly becoming one for New York City), I spoke up and mentioned to Miguel that Walmart plans 30 more stores in Chicago (a few people gasped at the thought of this) and asked, “How do you feel about that?” He replied:

How do I feel about that? It won’t be my job to feel something about new Walmarts in the city. That’s the city council’s job. I want to liberate them [he said this on Wednesday night]. I want there to be an open, deliberative process, with debate and transparency. I want there to be public hearings in and outside the council chambers. Let the proponents speak, and let the opponents speak. Whether or not there should be more Walmarts in Chicago is up to the aldermen and their constituents to decide. There are areas in Chicago where stores that sell fresh groceries don’t want to move in, but Walmart is – people are willing to take what they can get.* What is appropriate in one neighborhood might not be appropriate for another, but that is not for the mayor to decide. The citizens must choose.

(I can’t believe I paraphrased his response so well. I mean, I rode home in 2°F cold so my body is really tired.)

One audience member wasn’t sure what it meant to “liberate aldermen” and asked, “Can you describe what that looks like?” She was curious about Del Valle’s “proposal” to have a democratic process in the city council chambers. He explained that the citizens elect aldermen to represent them when making and passing bills. It’s the mayor’s job to control the flow of bill introductions and voting.

He gave the example of the parking meter deal: The ordinance was introduced one day and voted on the next day. This wouldn’t happen if Del Valle was mayor because he would require debate, transparency, hearings, and such. As mayor, he would immediately engage Morgan Stanley to try to renegotiate the terms of the lease. Unlike The Urbanophile, Miguel does not believe the city can buy back the meters – they’re far too valuable at this point.

He wants to make a structural change – the way governing should be but hasn’t been during the Daley administration. I support him in this effort.

*I would prefer that our TIF dollars be used for what they were designed for: improving the economic conditions in blighted areas. TIF money is supposed to be used to pay for capital projects that would not occur in that area if not for the TIF funding. Maybe Pete’s Fresh Market or Roundy’s needs a bit more incentive. The Walmart contribution to the tax rolls is not all it’s cracked up to be! Also consider how big companies like Walmart, and now Costco in the Illinois Medical District, consistently receive tax brakes. These are the very companies that can most afford paying taxes.

Chicago’s big box saga continues

The Chicago big box saga is a tale of who gets to build where, how big, and how much wage it pays. It can be extended to include debates on store design.

While big box stores were built here before the first Wal-Mart in Chicago, the saga begins with that megastore. The City Council passed a “living wage” ordinance (also called the big box wage ordinance) that required stores with over 90,000 square feet and $1 billion in revenue to pay their employees a minimum of $10 per hour, and an additional $3 per hour in fringe benefits. The Mayor vetoed the ordinance. Wal-Mart built its store in the Austin neighborhood and paid their normal wage (in 2010 it seems to be $8.75). It won’t be until 2011 (at the earliest) that the second Wal-Mart will open in Pullman.

An urban-friendly Best Buy in the same complex as a senior citizen assisted living center.

Meanwhile, Target opens new Chicago stores in McKinley Park and West Rogers Park (on Peterson Avenue), both in 2006. Best Buy opened stores on Elston Avenue, Belmont Avenue, Clark Street, Roosevelt Road, and Michigan Avenue. Kohl’s, a discount department store, opened a store alongside Best Buy on Elston (to the tune of 130,000 square feet, on par with Wal-Mart) in 2005. Home Depot and Menards have also opened stores since the big box ordinance veto in 2006 seemingly without a hitch.

This month, Target proposed to a group of residents and the 2nd Ward Alderman, Robert Fioretti, a new store at Jackson and Aberdeen in the West Loop. Many residents were disappointed by the store design. At least one resident didn’t understand the need for a store with the South Loop store on Roosevelt so close.

How the saga can end

The prevailing wages at big box stores in Chicago should be researched. The current research about Wal-Mart and big box stores’ tax revenue contributions should be validated by additional studies. There are several universities up to this task, and mine, the University of Illinois at Chicago, has released multiple studies – here’s one about localized job creation and elimination.

With solid background information, alderman and city agencies, as well as residents, can potentially make better informed and more effective decisions about the future of large-scale retailing in Chicago.

More of this please (Home Depot hardware store in dense neighborhood)…

…And less of these.

Lastly, the City Council and Zoning and Planning departments should set design standards for this style of shopping to ensure urban friendly and transit oriented developments. Home Depot and Target should be lauded for their stores on Halsted Street in Lincoln Park (more info), and on Roosevelt Road in South Loop, respectively*. However, each has since built their typical suburban monstrosities in other neighborhoods, that neither recognize that some customers would like to arrive by car (instead by transit or bike), nor consider the environment (minimum-size parking lots make a large contribution to the city’s current problems managing stormwater runoff). Future Wal-Marts should promote sustainable design.

First and second photos by Payton Chung. Third photo by PonderInc.

*While the Target in McKinley Park (Chicago) is LEED Certified, the South Loop store probably has an annual lower carbon footprint because of all the visitors who arrive by transit and bike. The South Loop store is near a major train station and several bus routes (at least five). The McKinley store is on a highway and two bus routes.

The truth about Wal-Mart’s contribution to the tax roll

I recently wrote about how Wal-Mart plans to expand its reach in Chicago in a big way (30 new stores big). Politicians around the country consistently like to be heard saying how one way the store(s) will benefit the city is the additional tax revenue the city will see from property and sales tax contributions. Here are selected quotes from Chicagoans:

On Tuesday, [Chicago Mayor] Daley noted that a Wal-Mart expansion would pave the way for sales tax windfall for the cash-starved city budget.

In suburban Cook County, about 20 percent to 30 percent of all sales tax revenue comes from Wal-Marts, Daley said.

Chicago Sun-Times, June 15, 2010

“Everyone realizes we need the tax revenue,” [Alderman Anthony] Beale [9th Ward] said.

Chicago Sun-Times, May 5, 2010

Ald. Richard Mell, 33rd, a pro-union alderman, lamented Wal-Mart’s domination of the nation’s retail market and its tendency to sell foreign-made products, but voted for Pullman Park because of the need for jobs and additional tax revenue.

Chicago Tribune, June 30, 2010

Comparatively, Wal-Mart brings in little property tax revenue on a per acre basis, according to a study from Sarasota County (Florida) and Public Interest Projects and posted by Citiwire. I’ve summarized their findings:

  • Single-family home: $8,200 per acre
  • Wal-Mart and Sam’s Club: $150.00-$200.00 per acre
  • Southgate Mall: $22,000 per acre
  • High-rise mixed-use project in downtown Sarasota: $800,000

That last one’s the kicker! From the Citiwire article, “‘It takes a lot of WalMarts to equal the contribution of that one mixed-use building,’ [Peter] Katz noted.” Read the full story for more examples and for more discussion on how this specific breakdown of costs and benefits is only one way to look at fiscal and retail impact.

If the same tax revenues were true for Chicago or Cook County (and I can’t say it is or isn’t), then the city planners and aldermen should be seeking developers to build high-rise mixed-use projects. Right.

But the issue Chicago and other cities have is that Wal-Mart is one of the most willing developers – they will build where no one else will. They have capital that no one else has. They have the resources to sway the population. It’s more politically difficult to resist such a willing partner like Wal-Mart than it is to seek relationships with developers who have the resources to create more beneficial mixed-use projects in the neighborhoods Wal-Mart seems to prefer.

Wal-Mart moves in, in a big way

Every Chicagoan should know by now that Wal-Mart, who currently only has a single store in the city limits, plans to open about thirty new stores (the City Council approved the construction of a Supercenter in the Pullman community area on the far south side*). Wal-Mart announced they want to open “dozens of new stores” in the next five years in various sizes ranging from 8,000 square feet (think Walgreens) to 20,000 square feet (think Apple Store Michigan Avenue) to the typical 200,000 square feet Supercenter.

This is big news for Chicagoans, and residents of New York City (there are no Wal-Marts in NYC). Not only will they be able to buy Coca-Cola for 20 cents a can, they won’t be able to shop at existing stores – because many of them will close. For now, the Chicago Tribune is keeping tabs on the developing story.

People in Chicago protest a new Wal-Mart. Disclaimer: This photo is from 2005, before the first Chicago Wal-Mart opened in 2006. However, in 2010, prior to the City Council vote, there were rallies protesting and showing support for new Wal-Mart stores. Photo by Andrey Smagin.

While they report on the recorded impacts of incoming Wal-Mart stores on new markets, I hope they answer the questions surrounding the confusion over the alleged negotiations between Wal-Mart executives and Chicago labor unions (representing construction and service employees). The unions say they got Wal-Mart to agree to a minimum wage of $8.75 while Wal-Mart says it’s just a matter of internal policy to adjust wages for the market.

Wal-Mart has funded a possibly influential campaign to get Chicagoans to support their new proposed new stores. Part of the campaign included ads on buses and putting signs and t-shirts on youths in the street, saying “Jobs or else.” If you want a Wal-Mart in Chicago, the company urges you to contact your alderman. Photo by Ira of Being Totally Sweet in Chicago.

So what are those impacts?

Wal-Mart can afford to be bold, and its impact is readily seen. Median sales decrease 40 percent at similar high-volume stores when a Wal-Mart enters the market, 17 percent at supermarkets and about 6 percent at drugstores, according to a study published in June 2009 by researchers at multiple universities and led by the Tuck School of Business at Dartmouth College in Hanover, N.H.

Drugstores like Deerfield-based [Illinois] Walgreens are the least impacted, according to the study, and are generally able to stay afloat by increasing their assortment size.

Supermarkets, the study found, can survive by doing their best to differentiate themselves from Wal-Mart, rather than attempting to compete.

Ideas about marketing and additional discussion of impacts is written on page two of the article. This light investigation from the Tribune comes after a recently released study from the University of Illinois at Chicago (my alma mater). Here’s the synopsis from that study about the sole Chicago Wal-Mart in the Austin (west side) neighborhood:

The study found that stores near Wal-Mart were more likely to go out of business, eliminating the equivalent of about 300 full-time jobs — about as many as Wal-Mart initially added to the area.

Read the full press release on the UIC News site or download the study (PDF).

*UPDATE: Where is the Pullman community area? It’s northwest of Lake Calumet and home to the former Pullman Palace Car Company’s factory and company town (see detailed street map of the Pullman community area). There are four commuter rail stations on the Metra Electric line within walking distance of the new shopping center. The development, called Pullman Park, will be located at 111th Street and the Bishop Ford Expressway (I-94). It includes shopping, a school, and housing, among other uses. The CTA #111/111th Street bus will run near Pullman Park.

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