Category: Jobs

Chicago’s big box saga continues

July 17, 2010 / / 0 Comments

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

July 15, 2010 / / 18 Comments

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

July 4, 2010 / / 0 Comments

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.

Unaffected by weather, or politics at COP15

December 18, 2009 / / 0 Comments

The Danish mail delivery worker rides their bike in the winter. No need to jump start dead batteries or leave the engine running. No fuel, no emissions. No politics.

Look at how many bags of mail the bicycle can carry. Check out the bicycle’s wheeled stand system (see the small gray wheels behind the front bike wheel). When the worker has reached their destination, they can deploy the small wheels (think training wheels for a child) and walk with the bike.

For the Christmas and holiday shopping season, United Parcel Service (UPS) hires part-time workers to deliver packages via bicycle.

The company started bike delivery in 2008 in Portland, Oregon. I should probably say re-started, because UPS was founded in Seattle, Washington, by a young person riding his bicycle to deliver goods. This year, UPS expanded the program to Silicon Valley, California (video).

UPS can’t get all the credit for super-ultra-low-emissions vehicles (don’t forget a van still trucks these packages to a drop off site for the bike worker). Messengers, cycle couriers, and food delivery people work all year round in every major American city.