Longmont has approved their third Wal-Mart development, this one at the southeast corner of Hwy 119 and County Line Road. “It’s exactly what we envisioned when we decided we needed regional commercial at this corner,” Longmont Mayor Julia Pirnack is quoted as saying in the Daily Times-Call. I'm not sure if the context of her comment literally meant Wal-Mart over any other commercial development, but the blanket endorsement of their proposal is disappointing. More about this in the Daily Camera too.
I've written about my issues with Wal-Mart along with other folks' comments on this blog, plus a Yellow Scene article about why I don't shop there. I'm not a front-line advocate against them, just a person who has not shopped at their stores for years based on their operational philosophies. They always cause an interesting discussion, and their impacts on communities' budgets make them impossible to ignore. Do you shop at Wal-Mart? Do you take into account various social/economic/labor/environmental philosophies when choosing a vendor of things or services to buy?
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21 comments:
I've totally changed my mind! I'm moving to Longmont to get some phat deals at the new SuperWalMart. See ya there!
Dan, this is not a pro or anti Walmart post, but your intro made
me curious. Are you familiar with the 'social/economic/labor/environmental philosophies' of every store you shop in, or only those that make the news? If so, I would be interested in what you found out!
Actually in Longmont, it's a Super WM, Sam's Club, and a gas station (the legislature has approved such stations could sell gas below market as a promotion for WM).
Broomfield is moving forward on another.
This is a heads up. Play close attention to the council workshop on Tuesday. The topic is FUTURE REVENUE FOR CAPITAL PROJECTS FUND AND FISCAL IMPACT OF LIMITED GROWTH.
We can have a lively interchange afterwards about it, especially regarding the new WM, low-income housing, and growth management.
I think readers on this blog will be surprised. A lot of Lafayette's urban myths will be on the table.
Even a broken clock is right two times a day....
What exactly are Lafayette's "urban myths," if may ask?
On that note, Kerry, I'm sure discussion will look at the key revenue producers in Lafayette - including grocery stores and the big box discounter that is the subject of this topic. I'll tune in Tuesday, but I'm going to be shocked if someone is going to tell us then or afterward that Lafayette is primarily dependent on "disposable income." That's not the base revenue generator in Lafayette that I'm aware of.
Because people generally don't spend their extra income just to by extra groceries and household essentials, and given the heavy contribution of this type of store to Lafayette's revenue, one has to wonder just who exactly is contributing to the base budget in what amount. The supposition in your past posts that lower income residents categorically do not contribute enough to City revenues is suspect.
WalMart, grocery stores, and other discounters may not be everyone's (anyone's?) favorite land use, but on the finance side it's not hard to see why they are a boon to cities and towns in a state with a regressive structure for local revenues. Everyone has to buy food, soap, and socks somewhere. (Okay, almost everyone. And I think I'm right about the food.)
To answer your question, Dan, I would not spend my dollars at a business that I believed to have reprehensible business practices. I have to agree with Frank's question, though, in terms of asking how much of what is lobbed at WalMart is just a matter of media coverage. WalMart's business practices seem to be par for the course, if anything, these days, like it or not.
Maybe we'll get Noam Chomsky for the ribbon cutting in Lafayette.
Yeah, Maybe Noam could show up with a blow torch and a wrecking ball. I'd be there to see that!
I know WM is everyones favorite store to hate these days, unless you are a City in CO and they provide you with mucho tax $. However, I don't really take pity on them for that reputation. They sure do a good job of living up to it. They want to be the biggest retailer of everything, then they have to accept the most critisism for the failures of that type of company.
I still believe when WM comes on line, we will be completely saturated with grocery services. People will gravitate to the super center, because they can get everything else there, and there are going to be other grocery stores in financial hurt because of this. Can we afford another empty shopping area?
Perhaps the impact of the Super WM can be the basis of the first urban myth.
How accurate is the city's projected expectation of the overall retail sales revenue from the Super WM and its impact on other established businesses, especially in its first two years of operation?
Cyclorado says:
"I still believe when WM comes on line, we will be completely saturated with grocery services. People will gravitate to the super center, because they can get everything else there, and there are going to be other grocery stores in financial hurt because of this. Can we afford another empty shopping area?"
Tune in on Tuesday and then let's hear what you think?
A second urban myth?: Is the city's Community Housing Prgram working as well as our city government says it is?
I wrote about this on my site a while back and basically blamed the anti-growth, anti-bigbox mentality amongst some in city council and some residents that led to Longmont becoming a 4 Walmart town (including Sams). This was when they were turning up their nose to every chain that wanted to come here, like Costco and BestBuy (BB eventually did). When they finally wised up and realized the door couldn't stay totally shut, it was too late, only one bigbox would apply in this town - Walmart. And with a vengeance.
The stupidest campaign slogan uttered was "thinking outside the bigbox" (he lost), but was apt for the situation.
Now we have these monster parking lots (which stay fairly full, hmm) and the prospect of blight where the WM near the mall will probably close. Great business negotiating, city people.
As far as shopping there, depends on what I'm looking for. Their grocery department is lousy, the rest is 'jack of all trades, master of none'. If no one else carries what they have, my choice is to either put my tax dollars outside of Longmont, or go to a Longmont WM. At first my wife and I thought it'd be different to be able to go to an "all under one roof" kind of store. Turns out we don't like it. It's too big, we rarely shop for food and clothes at the same time, nor want to, and the selection is average.
I do vote with my money (and my wife stuffs that ballot box!), I don't boycott WM, but I don't swear by them either.
A couple months ago at a council meeting I asked the Finance Director what the impact of the new grocery stores was having on the grocery sales tax revenue. His reply was that the total sales tax revenue from grocery stores was up, which means that more folks were buying groceries in Lafayette. It did not mean that the money from one store was just going to another (Councilor Bensman's persistent fear). Yes Albertson's revenue went down, but the other stores made more than what Albertson's lost. So the million dollar question is will we continue to draw more folks who previously did not shop in Lafayette when the new Super Walmart opens? Erie continues to develop at a rapid pace, so there will be more folks with no place to shop in the near term. The new Super Target is on the border with Broomfield, and since the Target on 287 in Broomfield will be closing we will be drawing folks from there. Additionally Anthem is continuing to build at a rapid pace so there will be new folks coming from there. At some point the saturation level will be reached, but I am guardedly optimistic.
It's always comforting to look at only part of an issue, especially if it is positive. But looking at the entire enchalada often tells a different story.
Up until recently, the city admin insisted that within several months after the King Soopers opened, the current Albertsons recovered to its previous KS level. Well, now we know it did not. And if one adjusts for inflation, it continues to decline. So will it reach a point that it will close? The current trend would suggest it is highly probable.
Now it turns out that the increased business at KS has yet to offset the purchase price of the old Albertsons and the revenue drop at the current one. Eventually, the overall result wcould have put it in the black. But now enter the super WM. Optimists believe it will be all upside. Realists know it won't and recognize the impact of the deal the city did with WM.
The new Albertsons left behind an empty building that the city now owns at a cost of $1.2M. And when the super WM opens, does any one believe Albertsons business will stay even or increase? And will KS's business increase? Plus WM leaves behind a mess for the Urban Renewal Authority to deal with.
Counting all the costs along with the revenue is just generally accepted accounting practice. The cost of urban renewal and blight never seem to make it on to the balance sheet.
Am I privy to the same information from which your conclusions are drawn, Kerry? My intuition is that grocery revenues are growing in total, with Lafayette being a central location with relatively good access. So it does come down to seeing the data.
Taking it on faith that there is some truth to this summary of the grocery business in town, I think you make a point that is worth considering. The question is, what can the City do about the negative consequences of competition? Obviously, if we could avoid leaving a trail of empty storefronts behind, that would be ideal.
Two ideas pop into mind, in terms of what the City could do to keep blight and hidden costs in check, are: (1) The City should avoid giving subsidies to retailers that substantially distort the market, by making the costs of doing business artificially low for one competitor or a few competitors, by enabling large retailers to put smaller retailers out of business. (2) The City should demand development standards that do not create instant blight if a business fails; in other words, not to make development review so easy that proprietary, short-lifecycle commercial construction ends up being a hindrance to economic development (when it was thought to be an instant revenue booster).
When you look at what the City has done to put the City at risk, it's possible, extrapolating on my assumptions above, to say that (1) the DESCO (SuperTarget) incentives and (2) the questions-optional approach to major retail development review have enocuraged retailers to set Lafayette up for a game of market Darwinism. I'm not sure that is my opinion, but it is the only way I could see myself agreeing with these accusations that the City didn't do enough to protect itself from the possible downside of economic development.
I'm hard-pressed to imagine what additional economic engineering you might have in mind. All these things you say about grocery competition may turn out to be true, but what should we have been doing about it the last three years?
It's a good thing to have councilors willing to ask tough questions, but why do these revelations always seem to come after the fact? You know, I think your concerns about "cannibalism" are worth monitoring; but I can't figure out how you have such incredible doubts, yet voted for the massive DESCO/SuperTarget incentives with no such comment. I thought you had a point about the impact of potentially imprudent assumptions in the 287 Commercial Center/WalMart traffic study; but I still haven't heard how the zoning and subdivision review went through a council hearing with your positive vote and no such comment.
Kerry, I have praised you in the past, though maybe not in this public forum, for your diligence and willingness to doggedly pursue better government. What keeps amazing me recently is the disconnect between what you say and what you do on the council. I do understand most of your point (it just seems to be one big point), but what am I to make of the compromise I see when it comes time to take action on the council?
Restating in part what Alex Schatz said above, why approve massive incentives for another large discount retailer with grocery if the city is in such dire straits over the SuperWalmart situation? And why oppose Lowe's, a business that does not compete in discount goods or food, and has not asked for financial incentives? These do look like disconects.
Alex et al,
You ask some good questions. Your insitutional memory is lacking, however. You need to also consider the details and what I also said publicly at the council meeting.
I supported the city's willingness to negotiate the deal with WM for the super WM. But when the negotiated deal came back some 10 months later, it was totally different than the deal with King Soopers and left the city financially exposed to the negative impact of the well-known and documented studies of WM cannibalism. I asked the city (on tape for review) if the new Albertsons got slammed (cannibalized) by the new King Soopers. The city admin said that it was only for several months and Albertsons recovered to its pre KS sales levels. Finally after two years of asking, I got to see the numbers. The city was wrong. Albertsons got slammed. It was not made known at the time the fragility of Albertsons. And the city had the numbers for two years.
The WM deal passed 4-3. I voted against it. We should have gone back to the bargaining table. The new WM is projected to open sometime late this year. So that will be the test. If you follow Tuesday's workshop presentations, you will see that the Darwinian effect (neat term) is again ignored.
Ironically, having been told there was no such thing as retail "cannibalism", the proposed Target deal, after three reiterations, does protect the city to the best of our ability from the Darwinian effect. That store will be located as far south as possible and hopefully will capture Broomfield Target business (if it is closed), hospital employee business, the office complex business, the southern residential business, and the "I hate Wal-Mart" business. Maybe even some NW Parkway business. But since the city does not recognize the Darwinian effect of the retail world, there is no work done to study it.
As for the Caria and Baseline intersection mess. That was on the radar screen several years ago when the Batemans were proposing building 110 single family homes on what is now Thomas Open Space. The Waneka Point residents formed the Waneka Point Neighborhood Assocation and fought back, citing how increased traffic from the proposed development would increase the danger at that intersection. The city's position was that a controlled intersection at Caria and Baseline was not feasible since it was too close to 287. Now on Tuesday, the council is being asked to borrow money ($250,000 plus interest) to install a controlled intersection at Caria and Baseline. What was stated as not feasible has become feasible? Why is the city willing to foot the bill?
When the council was asked to approve the WM PUD, I asked about traffic mitigation on Baseline. The Planning Commission had approved the plan. I asked if the traffic mitigation would be in place before the opening of the super WM. I was assured it would be. As of today, nothing has been done. The city has the right to prevent the store from opening until the work is done. I asked the city to tell WM to get it done.
Another example is the intersection at Dagny Way and 95th. When Forrest Park was being considered, Indian Peaks residents pointed out that residents would use that intersection to cut across 95th Street to the Y and Atlas Valley, the local "let's play chicken" intersection. The PC ignored it, the city said the intersection was too close to 95th and Arapahoe to be controlled. Fast forward and now the city is proposing to borrow $250,000 plus interest (a total of $500,000) to control that intersection. What changed? (For trivia buffs, where does the name "Dagny" come from?).
As for Lowes, the jury is out as to whether they will ask for a deal. The discussion this Tuesday increases the city's financial exposure in case they do. There is a city traffic analysis which shows the major traffic bottleneck on E. Baseline. I just saw it.
There is a Darwinian effect. Every retail business includes it in their business plans - how can it take business away from its competition? Business schools teach courses on it. Local government needs to recognize it and do its best to plan for it. But when council membership changes every two years, the city admin denies it, and institutional memory is lost, nothing happens. It takes four and I'm only one.
Since I am rambling, three years ago I became a director on the Northwest Parkway Board. As part of the orientation, I was given the prospectus used to borrow over $400M. In business school one is taught to read these things backwards. The juicy stuff is in the back. The spin and hype is in the front. It took only about 30 minutes to figure out the Parkway was headed for default on its bonds. I raised the issue at the public meetings and was slammed by the executive director and the Commissioners. I have an e-mail from the exec director saying I was right but politicians don't like to hear bad news. I've kept it. As an alternate, I couldn't vote so why waste the time. After all, the consultants and lawyers were getting $300 per hour and I was volunteering my time. They wanted to keep getting that $300 an hour as long as possible. Two years later, its default time.
Last week I met a guy who was a former member of Castle Rock's city council. When he found out that I was also a councillor, he said city government needs to adopt more of the practices of private enterprise.
Last point, do you folks realized that these economic development agreements are never reviewed by the city finance director?
The simplest of points never seem to be resolved here in blogworld. Traffic analysis is part of planning review. You voted FOR the WalMart SuperCenter plat, rezoning, and site plan, Kerry. This is old ground - are you in denial, or do you somehow think that voting against the SuperWalMart EDA was a vote on the traffic study?
Your actions in voting against the WalMart EDA are consistent with your current position about "cannibalism." But I don't see how you can reconcile voting for the SuperTarget EDA based on exactly the type of optimistic speculation that you accuse others of foolishly relying on. If we go by the standards previously posted here by you, we should be worried about every possible aspect of the performance of a new store.
Also, I'm not sure how protecting us against the Darwinian effect to the "best of our ability" is achieved simply by putting a cap on annual refunds. Is there something more? How do you know that we couldn't negotiate better terms?
And now we're back to speculating about whether Lowe's will ask for a deal...
Who was it that said theory is great but reality is better? I appreciate the thoughts out here for discussion, but talk about lack of institutional memory...
Sorry, Alex. You're twisting it again. The Super Wal-Mart PUD was approved by the Planning Commission and supported by the Planning Department. It was signed off by the entire city staff. The traffic study was acceptable to all three. At the time, the city said there could be no controlled traffic intersection at Caria and Baseline. Now there can be and the city is supposed to pay for it? I just saw the city's study. Why wasn't that part of the WM discussions. My issue is to get the traffic mitigation in before the store opens. Not happening right now.
Putting a cap on the sales tax rebate lets the city adjust to whatever financial hurt occurs gradually with as little pain as possible. That's why King Soopers was done that way. The Target one is even better since the city gets some money first before any rebate. Keeps the revenue stable.
Yes, we have to speculate. It is called "risk analysis". The city wants the council to consider borrowing against future sales tax revenues. WM slipped a year. Target seems to be slipping. Who knows about Lowes. The yearly payment on the debt if we go ahead is not going to slip a year. So where is that money going to come from?
Simple business and debt planning to those of us who understand it.
There are some obvious dynamics that should be discussed when the city is working on an economic development deal. Pro or con, they should be discussed. I don't know what transpired with Wal-Mart. The council was kept in the dark for nine months. At least now we are involved and can see some of the dynamics. The Target deal was structured to reduce the risk. If there was no risk, why was it structured to reduce something that doesn't exist. So a lesson was learned from WM.
New topic. Bunkers Bagel. Picked by The Yellow Scene as the #2 bagel stop in Boulder County.
It's closed. Went over for a bagel fix this a.m. The city closed it. According to the city posting, Bunkers had not paid the city for the sales tax it collected for three years. Three years. $25,000 including interest. The city now is in possession of the contents of a bagel shop.
There may be a new bagel tenant coming to town. Hope they have a good bagel recipe.
Kerry either doesn't remember or just plain doesn't know that he, as a member of the city council did indeed approve every single action the planning commission reviewed on the SuperWalmart. The city staff and planning commission probably only recommended approval of the SuperWalmart and the city council was very likely the ONLY GROUP that actually did ANY approving of SuperWalmart.
Bunkers Bagels R.I.P. Can we blame the Starbucks in King Soopers for its downfall?
KB- "You're Wrong!"
AS- "No, You're Wrong!"
KB- "No You're Wrong!"
AS- "No You're Wrong!"
I'm sure one of you knows what you're talking about, but my attention span is about as long as Spicoli's on a Friday night pizza binge.
Dream- Apples and oranges dude! Bunker's is gone due to bad business decissions, not from competition.. and I'm sure you were not serious when you said that, but bad analogy. Let's talk Grocery stores and competiton. 1, 2, 3, 4, 5, 6... That is how many grocers will be in a 1 mile radius around Lafayette in a year or 2, once WM and Target are up. Add 7 if Safeway adds one up the hill. They're starting to compete with gas stations for numbers.
I don't have any numbers to support the carrying capacity of Grocers in any given town, but this seems like twice as many grocers as any other town I can think of.
Dream said: "And why oppose Lowe's, a business that does not compete in discount goods or food, and has not asked for financial incentives? These do look like disconects. "
Lowes will compete with Lafayette Florist, the lumber Yard on 120th, and Ace Hardware. You compare apples and oranges again!
Gets kind of complicated, doesn't it?
The legislature is about to approve letting the grocery chains start reselling gas below cost. How will that impact all the local stations? The independents had won a suit to prevent this and now the law is being changed to allow it.
The other unknown in all this is when will WM, Target, Lowes, etc. open their next store 5 miles up the road. Maybe there will be a WM at Hwy 7 and I-25 someday. Or a Target.
Yet we don't do that kind of analysis before committing millions of dollars. That's my hang up.
You are right Cy, I was not serious when I asked if Bunkers closing could be blamed on Starbucks. They contain similarities but are not the same. Its like comparing Chili's to McDonalds. They both serve hamburgers but that's about it. Same thing with comparing Lafayette Florist and etc to Lowe's. Lowe's competes head to head with Home Depot. While they both sell plants, Lafayette Florist and Lowe's do not offer the same products or services.
I do agree with you Cy that Lafayette is maxing out prime retail space with grocery stores. "Enough is Enough!"
By the way, thanks to a link from David Strungis in another thread I found a series of documents the city is considering including future budget projections that anticipate Lowe's opening in April of 2009 and Target pushed back to 2010.
And no Kerry, it is not confusing. You and the rest of the city council did unanimously approve the SuperWalmart, traffic study and all. AS = Correct.
I agree. Non of this is "complicated". In the decision making process you are presented with a set of facts based on past history, snapshot of now, and future speculation. We all know hindsight is perfect, unfortunately at the time of the decision we don't have it. We are elected to council to provide our best effort and insight on these decisions, make them, and move forward. If they are right we pat ourselves on the back. If they are wrong we learn from them and try not to make the same mistake twice. Council Bensman always points out many things, votes no, but never makes motions to change the decision to something better. Lead, follow, or get out of the way.
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