August 21, 2005

Storage Trailers

In many areas, Wal-Mart doesn't have the right to keep temporary buildings on its property, but it finds the additional storage valuable during the holiday season. This brings to mind a simple question: how much is the marginal storage trailer worth to Wal-Mart? Another: Should Wal-Mart pay for the right to keep storage trailers on its property during the holidays? If so, who should it pay. And, who does it pay?

The three Wal-Mart stores in Macon and Bibb County want to use up to 20 storage trailers at each location during the holiday season to store layaway merchandise.

The company is requesting conditional use permits for the temporary trailers at its stores at 1401 Gray Highway, 6020 Harrison Road and 5955 Zebulon Road.

Wal-Mart also is seeking permission to use a vacant Wal-Mart building at 2525 Pio Nono as an off-site warehouse.

Wal-Mart's violated the terms of approvals before, to unknown consequences.

Let me state at the outset that I don't know anything specific about the approval processes; I talk in general theoretical terms here, not specifics about any local government. I assume that real local governments will give thumbs-up or thumbs-down on these uses of property. But the exchange context is actually pretty interesting.

From the public-choice economic point of view, local regulatory bodies are not filled with impartial judges, but greedy utility maximizers. They know that the right to have trailers is NOT owned by Wal-Mart OR adjoining landowners, but instead is actually owned bythem, the land-use board members, who cannot profit directly from the sale or lease of such rights.

A Posnerian judge would decide this approval process based on maximization of net wealth: find out how much Wal-Mart benefits, and find out how much adjoining land-owners are affected by the storage units. The process should make sure that the benefit to Wal-Mart is greater than the harm to others, and the number/size of storage trailers permitted should maximize the difference.

How do planning boards actually rule on such matters? Some just give a green light, and others a red light, because of ideological reasons or political power of constituents. I presume that many try to minimize noise, and set workable rules for storage trailer use. More importantly, I think many will try to get funds from Wal-Mart for personal or public use. A tidy donation to the local school or charity would appear to benefit both local politicians and Wal-Mart. (I have no idea how much Wal-Mart contributes to the election drives of local politicians).

But notice who is not compensated: those who are potentially harmed, adjoining landowners. That the process cannot not be used to compensate landowners for harm imposed by Wal-Mart, but can be used to compensate politicians, is just something that we have to live with if we want political exchange to dominate market exchange.

Posted by Kevin at 10:23 AM

July 21, 2005

Legality of Anti-WM Zoning Ordinances

George Lefcoe has what looks like a must read paper for academic types -- The Regulation of Superstores: The Legality of Zoning Ordinances Emerging from the Skirmishes between Wal-Mart and the United Food and Commercial Workers Union.

It's on my reading list.

Posted by Kevin at 9:42 AM

July 1, 2005

Vancouver Wal-Mart Rejected,
Apparently for Ideological Reasons

Back in February, Kevin noted that Wal-Mart was planning an extremely "green friendly" Wal-Mart store in Vancouver, British Columbia, in an attempt to win city council approval for its new store. It turns out that even though Wal-Mart more than met all the conditions set out by the council, and even though Wal-Mart had won approval of the city's staff and the city's urban design committee, city council soundly rejected their proposal. The editorial board of the Vancouver Sun is livid: [thanks to Dave at London Fog for the pointer]

...Vancouver city council has sent two terrible messages: The city simply isn't open for business and, worse, it will allow ideology to trump fairness and common sense in its efforts to stamp out big business.

The Wal-Mart saga is a particularly egregious example of council's disdain for business, city staff and the people of Vancouver. For four long years, Wal-Mart made every effort to ensure the proposed store would have a positive impact on the environment and our economy. Now it's evident that none of that ever mattered.

... There's no evidence that the eight councillors who voted down the Wal-Mart application did so because the retailer failed to meet the requirements of the planning committee. On the contrary, Wal-Mart met or exceeded all expectations and its proposal was endorsed by both city staff and the city's urban design panel.

The only reasonable conclusion, then, is that council rejected the application for purely ideological reasons, because it sees Wal-Mart as the symbol of all that is wrong with corporate America.

Consequences? Lower-income Vancouverites will be worse off. The elitists on Vancouver's city council will reduce both employment and shopping opportunities for them. Also, given the facts reported by the Vancouver Sun, I doubt the story has ended.

Posted by TheEclecticEconoclast at 6:58 AM

June 24, 2005

WM & Eminent Domain

The aftermath of the Kelo decision is a an excellent time to renew my call for Wal-Mart to quit using eminent domain to obtain store locations.

It's wrong; it violates the very essence of a market economy, and it does your image no good to use the force of law to evict people from their homes and businesses.

Let me be clear. A Wal-Mart store is NOT a "public use" of land, even if the store does (in the eyes of its owners, employees, and shoppers) serve a public purpose. Wal-Mart should cease and desist from this practice...

I could be taking this too far, but I'd argue that in fact, Kelo means two things for readers of this blog:

1) A city council controlled by Wal-Mart and developer interests will have an easier time of taking private property to put in new big-boxes and strip malls.

2) A city council controlled by anti-sprawl activists and anti-boxboxers will have greater power to shut down megastores if they're considered by the council to be against the best development interests of the area.

Eminent domain as tool just got easier to justify. In other words your private real property is really on loan to you by the city council. You do not have the final say to how it is used; at one time, as long as you agree on a remedy to the harms your uses and your neighbors uses presented to one another, nobody else had any say except for very limited takings.

Now a city council can tell you (by calling in a crank economic "expert" with his predetermined "economic impact report") that the local grocer will "make people better off" by "keeping money in town", and Wal-Mart and Wegmans and other stores can be forced to sell their land and buildings. Or the city council can call in a different "expert" who opposes big-boxes, insisting that they destroy neighborhoods, and should be gutted in order to create a new urban landscape.

This is not a good outcome for anybody, really, except local politicians who can now bid up their demands for political support.


Posted by Kevin at 11:48 AM

June 23, 2005

Yelm City Council Bans Discussion of Wal-Mart

The Yelm City Council won't let people mention Wal-Mart or big-box stores, and have pronounced a moratorium on moratoriums, all of which to me is utterly bizarre:

Yelm's city attorney, Brent Dille, said council members were fed up with requests that the city impose a moratorium on the large stores. But he also said they don't want to appear biased if an appeal of Wal-Mart's application comes before the council.

This isn't the first time the council has silenced the masses.

In April, it unanimously approved a motion banning the word "moratorium." That was in response to citizen requests that the council enact a moratorium on big box stores so the city's staff could review the city's decade-old zoning.

The reasoning is straight-forward, however:
"You can understand if you're barraged for two months at meetings - the same people saying the same thing."
[H/T: Fark]

Posted by Kevin at 11:35 PM

June 1, 2005

Taxes from WM Support Smart Growth in Denver

Residents of the New Urban Stapleton development want the nearby big boxes gone... if only they weren't the backbone of the tax structure:

An ambitious project like Stapleton requires a vast amount of financing, much more than can be generated from residential property taxes alone. So, to enter Stapleton from Interstate 70 is to be confronted with the very emblem of suburban sprawl, a conventional 750,000-square-foot big-box shopping center called Quebec Square with huge parking lots that can accommodate 5,000 cars, a Wal-Mart Supercenter, a Sam's Club warehouse store and a Home Depot...

As a generator of tax revenue, however, retail is much more significant than housing. Hank Baker, a senior vice president at Forest City Stapleton, said that Quebec Square, which opened in 2002, brings in $8 million annually in property and sales tax, nearly seven times the amount from the project's first 1,000 homes. (An affiliated company, Forest City Ratner, is the development partner of The New York Times Company for its new headquarters in Manhattan.)

And in fact, it's the sales taxes from the rural poor who are supporting the new urbanites:
Unlike communities built on undeveloped land, Stapleton is surrounded by mostly low-income neighborhoods whose residents were traveling beyond city limits to shop at stores like Wal-Mart, Mr. Gleason said. This demand helped city and community leaders reconcile themselves to Quebec Square...
I'd like to see the relative prices of food and other goods, since the WM Supercenter is nearly adjacent to CostCo.

Posted by Kevin at 8:13 AM

May 26, 2005

The Action

Palmer, Alaska officials will not ban Wal-Mart for 6 months. Why? To help the consumer? To hurt the little guy? No, to help the politicians!

Enacting a moratorium, Councilman Ken Erbey said, would risk pushing Wal-Mart outside city boundaries, where it can serve the city population without having to comply with city zoning codes or the details of the large-retail ordinance.

"We can revise the LRE and make it so strict as to get them to say 'We don't have to abide by the LRE,' " Erbey said. "They don't have to go up the Palmer-Wasilla Highway, they can go just up the street by the fairgrounds. Then we have no say-so in what they build and, worst of all, we don't get any of the action."

Posted by Kevin at 9:23 AM

May 25, 2005

WM Versus the Cowboys

Craig Depken notes that the new Cowboys stadium is being constructed adjacent to a new Wal-Mart Supercenter. This could spark a disagreement between two powerful political players:

This picture shows where the proposed stadium will lie. The parking lot directly to the north of the proposed stadium site was a Kmart and Walmart is in the process of building a Super Walmart right there - food, beer, etc. It will be interesting to see who wins the battle between the Cowboys and Walmart - the Cowboys will likely bar food and beverage into the stadium, and Walmart will likely lobby for food and soda being brought into the stadium.
I can't imagine Wal-Mart will have that much leverage in this decision.

Posted by Kevin at 4:22 PM

April 16, 2005

Florida Canker-Voucher Mess

For once, all Wal-Mart bloggers agree!

It was at best mighty stupid of the Florida government to offer Wal-Mart vouchers as "payment" to citrus tree owners after it forcibly cut down their healthy trees outside of the 125ft radius of contamination. At worst, it was corrupt and mostly unnecessary.

Here is an excellent written timeline of the development of this "program" to eradicate canker (again), and the development of compensation schemes.

Now I understand the need to contain a wildly destructive plant disease, and I believe that just compensation can come via cash or suitable in-kind replacement, but giving a $100 "Florida Shade" voucher (paid for with Federal tax dollars) good for purchasing certain non-citrus tree items from Wal-Mart garden centers smacks of corruption and favortism.

I also understand the need for proper accounting and limiting fraud, but limiting purchases to select Wal-Mart items is just foolish--unless these items are sold at Wal-Mart's cost, which frankly, I doubt. It cannot be written into the law that these vouchers must be spent at Wal-Mart, but one assumes that is the way the law is written (just like big-box zoning laws that don't specifically mention WM, but are targeted at it).

Nobody has explained why "Wal-Mart-only" vouchers were offered in the first place. Why didn't Home Depot or KMart put up a fight to get these dollars? Initially, more stores were eligible, but neither KMart or Home Depot could guarantee that the vouchers would be used only for plants! In other words, a seemingly sensible restriction has been used to favor a single business -- imagine that!

Some people are content to blame Republicans for this mess, but I would blame it on the outright ineptness of both the permanent non-appointed members of Agriculture bureaucracy itself AND the appointees of both parties.

There is no solid evidence of political chicanery, even with the high levels of donations by Wal-Mart stockholders. However, $52 million in WM vouchers has already been doled out, which is not chump change.

But since contractors are getting ~$70 a pop to cut the trees down, I'd suggest this welfare program is targeted to smaller fry as well as the big boys.

The anti-canker cutting program started in 1995, when Democrat Lawton Chiles was governor. It's bad enough that a Democrat starting taking private property away without any thought of compensation, but then the legislature enacts a program to compensate pitifully in-kind. The "Florida Shade" Wal-Mart voucher program was enacted in August of 1998, although details weren't sorted out until a year later, under Republican control. Mr. Bush was elected in November of 1998, so he is partly to blame for the compensation mess.

But exactly how is Mr. Bush totally to blame for this?

Mr. Bush should not be the prime target in this scandal; the entire political establishment of Florida should be given a thorough drubbing by the newspapers and the electorate.

Via The Box Tank and JR

Posted by Kevin at 2:21 PM

April 14, 2005

Woodland Park WM Gets Go-Ahead

The controversy described earlier has been resolved -- NOT:




(Caps in original). There will still be a moratorium referendum, and now perhaps another vote on this particular decision.

Posted by Kevin at 9:24 PM

April 9, 2005

Tax Incentives (UPDATED)

You never know where you'll find a post for ALP, tonight I found one on the ANAHEIM Angels message board. This has to do with Mesa, Arizona and the $80 million in tax incentives for a development project which will likely include a Wal-Mart:

Sens. Marilyn Jarrett, R-Mesa; Karen Johnson, R-Mesa; Thayer Verschoor, R-Gilbert; and Reps. Andy Biggs and Eddie Farnsworth, both R-Gilbert, slammed the estimated $80 million incentive package the opposition group has deemed a "subsidy for the Wal-Martanchored freeway development."

But Riverview developers Kimco Developers and De Rito Partners Development said there will be no taxpayer assistance for Wal-Mart. Also, their campaign spokesman Doug Cole said Harkins has benefited in the past from shopping center incentives and is trying to stop the Riverview project to keep the Cinemark chain out of the market and help his Tempe Marketplace theater two miles away.

On May 17, Mesa voters will cast their ballots on Propositions 300, 301 and 302. If approved, the Riverview at Dobson project at Loop 202 and Dobson Road is expected to include a Bass Pro Shops Outdoor World, 16-screen Cinemark movie theater, "big-box" retailers with a probable Wal-Mart, auto dealerships and a business park.

Farnsworth and Biggs said they oppose the project because of the economic incentives. Jarrett, Johnson and Verschoor did not return phone calls.

"The problem (with incentives) is government is using its power to pick winners and losers," Farnsworth said.

Mesa Councilman Mike Whalen, a supporter of the Riverview project, called the legislators� announcement "disturbing."

"I�d respectfully ask them to work on their projects and stay out of Mesa projects," Whalen said. "This is a war, we have to understand it, but . . . we don�t need legislators jumping in and endorsing. That�s not their job."

Harkins declined to speak with the Tribune, but did issue a statement.

"I have invested millions in Mesa over the years and do not think it is fair to my business, Mr. Basha�s business or Fiesta Mall, among many other businesses, to give some of the wealthiest companies in the world such a huge taxpayer handout to hurt us, our employees and Mesa taxpayers," Harkins said.

Mr. Basha's sentiment is one I whole heatedly agree with. It is stated in the agreement that no money can go to Wal-Mart, but they could find a way around that possibly. However, that's not the point, government shouldn't subsidize business especially to such a large degree.

Kevin Adds: Wal-Mart is going all out to deny these rumors:

In an answer to the "No on Riverview" campaign materials linking Wal-Mart to possible free rent or other perks, the retail giant on Friday started distributing a letter from its seven Mesa locations.

Wal-Mart spokesman Pete Kanelos said the letter will be placed in shopping bags throughout the weekend at Mesa�s two supercenters, one regular store and four neighborhood markets.

"We don�t have a position (in the May 17 election), but we felt it was important enough to state the facts to make sure our customers know the facts," Kanelos said....

Also on Friday, Kimco Developers president Jerry Friedman sent a letter to City Manager Mike Hutchinson claiming Wal-Mart will be paying a "commercially reasonable and fair market rent for its land if a lease is entered into." He offered the city the future chance to review the lease agreement, which has not yet been signed.

Earlier this week, the city posted a letter on its Web site from Ernst and Young�s Steve Klett, whose Riverview market analysis became the basis for a Tribune article and subsequently the "No on Riverview" campaign materials because it stated that Wal-Mart�s Riverview rent would be $0.00. Klett said the $0.00 figure was not meant to imply the company would not pay rent, but was used to calculate revenue projections from Mesa�s rental tax, which he believed Wal-Mart would not need to pay.

Posted by Bob at 1:34 PM

April 8, 2005

Giant Expoloitation

Russ Roberts has an excellent assessment of Giant Foods support of a bill that will restrict competition from Wal-Mart:

Ironically, if this bill passes it will hurt workers by lowering the demand for their services. It will hurt consumers who will end up paying higher prices for groceries. It will help Giant and its unions.

Maryland Senate President Thomas V. Mike Miller Jr. (D-Calvert) said lobbying on the issue from labor groups was "very light."

Oh, right. They don't really care. It's not that important. Nooooo.

"It's an issue that's been around for a while, and all of us recognize that Wal-Mart doesn't do right by its employees," Miller said.

Great insight, Senate President Miller. Thank you for insulting the employees who choose to work at Wal-Mart for reasons you cannot decipher. Thank you for making it harder to operate a business and hire employees in our state. Thank you for making people's lives harder by making food more expensive. And most of all, thank you for encouraging other businesses to turn to you rather than trying harder as a way of staying in business.

Posted by Kevin at 8:06 AM

February 18, 2005

CT Government Inspectors to Visit WM Stores

The state of Connecticut is taking labor law very $eriously:

[S]tate lawmakers are going after the retail giant with legislation.

Montville State Representative Kevin Ryan says lawmakers are looking at increasing fines for labor violations. They also want to add more inspectors to the state Department of Labor to investigate complaints.

The retailer agreed to pay $135,000 last week to settle federal charges that it broke child labor laws in Connecticut, New Hampshire and Arkansas. Lawmakers in Connecticut are critical of the settlement, saying that money is nothing to a corporation like Wal-Mart.

Also today, Governor Rell is calling on state inspectors to visit and inspect Wal-Mart stores in Connecticut to look for other violations.

Do you think they will make a public announcement if they find no other violations?

Posted by Kevin at 1:32 PM

February 3, 2005

A "Green" Wal-Mart?

According to the Vancouver Sun, Wal-Mart is going to extraordinary lengths to meet local government's demands:

Wal-Mart Canada has unveiled a $30-million-plus, environmentally correct design -- with windmills, geothermal heating and 250 dogwood trees -- for its controversial store on Vancouver's Southeast Marine Drive.

The design aims to appease Vancouver city council members who in 2003 told the U.S.-based retailing giant to come up with the "greenest" design possible if it wants a chance to build its first store in Vancouver.

Posted by Kevin at 11:00 AM

January 25, 2005

Nashua Mayor on the Warpath

As it does in so many places, Wal-Mart causes a stir-up in Nashua politics (rr):

NASHUA - Mayor Bernie Streeter is replacing the two leaders of the Conservation Commission, who both fought against a Wal-Mart superstore on Amherst Street, and has re-nominated a commissioner who backed the idea.

Streeter has tapped longtime member Linda Bretz, who supported the retail giant�s disputed proposal last week, to sit on the board for another three years.

Kathryn Nelson, the board�s chairwoman who opposed the plan, resigned from her position the day after the vote.

Streeter said he decided to replace vice chairwoman Jacqueline Trainer, who also voted against the Wal-Mart plan, because he wanted �fresh air� on the board.

�A board like that needs some fresh air occasionally,� said Streeter, denying that there was any connection to the deliberations about Wal-Mart. �How they voted, frankly, is not my concern.�

Posted by Kevin at 10:57 AM

January 2, 2005

Bentonville Regional Airport Almost Breaks Even

In shocking news, the regional airport near Wal-Mart headquarters makes almost enough revenue to pay for its own expenses--which is a near miracle for government run and subsidized enterprises. However, turning a profit by running the airport efficiently doesn't seem to be on the minds of the government managers. Instead they want to sell the land around the airport that Wal-Mart helped make valuable:

Alderman Ed Austin said traffic is the biggest problem facing the city of Bentonville, and the best way to alleviate these traffic woes is to extend 28 th Street. It is more important, he said, than keeping the airport.

Austin also said Benton County leaders determined that the airport no longer serves the public good, and thus, is no longer tax exempt. "I do know that the city is required to pay some property taxes on the airport," he said. "The question I have is why the city has to pay taxes."

It is not the entire airport that no longer serves the public good, however, it is only the parcels of land on which private property sits. Shirley Sandlin, Benton County tax assessor, said the airport remains tax exempt because it is municipally owned and used. Land that holds private property � hangers, for example � is taxed because that land serves private good, not public good. Until 2003, all airport land was tax exempt.

Stewart Smith, director of finance for the city of Bentonville, said the city paid nearly $8,000 to the county in property taxes in 2004; however the city has not passed on that cost to the lessees.

Chip Gibbons, who leases land at the airport on which he�s built an office and hangers, signed a lease agreement with the airport commission in 2001 to pay $55.60 per year for 1,112 square feet of ground. Although the rent amount seems low, Gibbons said it is comparable to rent at other airports. Regarding property taxes, the lease states that the lessee pays all taxes and assessments on the property. Gibbons said he has never been billed by the city for the newly imposed property taxes.

Airport Commissioner Bill Enfield said he doesn�t think the city�s proposal to close the airport has anything to do with a lack of revenue, traffic or property taxes. Land is the reason, Enfield said: "Mainly they see it as a big windfall for them."

Enfield said land appraised west of the airport several years ago carried a value of $50,000 per acre. He estimates that the airport land is now worth about $70,000 per acre. With 130 acres of land, that�s more than $9 million the city could get by selling to developers.

Andy Sams, an owner of Drake Aviation that operates out of Bentonville Municipal Airport, agrees. "I think the whole issue is to use the land of the airport to sell land to developers and put money in the hands of the city�s coffers."

In order to close the airport and potentially reap the benefits of the airport�s land, the city will have to remove itself from federal and private contracts.

As a recipient of federal funds, the city has agreed to operate for 20 years, said Roland Herwig, Federal Aviation Administration spokesman for the southwestern region. "They can come to the FAA and make a proposal to be absolved from that covenant," he said. "The airport is seen as a national resource. Since there is public money involved, they would have to submit a proposal to be absolved. The proposal would be reviewed very carefully, and that would take place in Washington."

Posted by Kevin at 10:03 AM