This report was prepared for the Albemarle Planning Commision in the fall of 1999.

A group of local concerned citizens and environmental groups, including the Shenandoah Ecosystems Defense Group (SEDG), Appalachian Restoration Campaign (ARC), the Charlottesville/ Albemarle Bicycling Association (CHABA), and Students for Environmental Action (SEA), have come together to oppose the rezoning of a parcel of land off Fifth Street to "Regional Service". We strongly oppose a "big box" development on this site. While 29 North already has a substantial amount of retail development, we feel that Fifth Street extended has a much different character because of its proximity to the city.

In seeking to understand the possible impacts of a "big box" development off of Fifth Street, we have purchased a number of studies conducted in cities and towns around the country before and after the arrival of Wal-Mart and other "big box" developments. Highlights of these studies follow. Copies of the studies have been given to Susan Thomas in the County Planning office.

Printed below are Frequenty Asked Questions and Answers about WalMart and Big Box Developers in general.  Click on the links to jump immediately to the question, or use your browser elevator bar to scroll down the page.

A: According to Kenneth E. Stone of Iowa State University, Wal-Mart "has created an illusion that the prices of each of the 75,000 products carried in a typical Wal- Mart store are the lowest. In fact, that is only true for about 1 percent of the products, but those products are the ones popular with consumers -- General Electric lightbulbs, name-brand shampoos, deodorants and cleaning products," Stone said.

"The vast majority of them are the same price in every Wal-Mart store in the United States," he said. "Six hundred to 800 items will be competitive and they'll shop [check prices of] the competition on them." People get used to seeing those items and simply assume everything else in the store is a similar deal, Stone said. (The Hartford Courant, "David Vs. Wal-mart", David Owens, March 17, 1996 Sunday)

A: The market operates to the benefit of the consumer and our nation if it is free of monopoly influences. "Big box" retailers do not practice fair trade in a free market. The "big box" retailers cut prices long enough to weaken competition, then raise them. According to The Wall Street Journal, "Wal-Mart uses its size and clout to bleed its rivals dry" (WSJ, 11/18/93). Wal-Mart has been sued and convicted for unfair trade practices (WSJ, 10/13/93).

According to a study by Thomas Muller of a proposed Wal-Mart in Woodstock VA, "It is not reasonable to assume that when one store dominates a market to the extent projected in this case that a monopoly can be avoided. In fact, monopoly conditions have been considered inconsistent with the concept of free enterprise for over a century." (Thomas Muller, Projected Impact on Small Retail Business Enterprises Resulting From a Proposed Wal-Mart in Woodstock, Virginia, Thomas Muller, 703-560-6605)

It is widely recognized that free market activity should be regulated to eliminate child labor, unsafe working conditions, limit pollution, and stop false advertising.
"Big-box" retailers practice unfair trade. Their market power is used to their benefit, not the benefit of consumers.

A: While the promoters of Wal-Mart and other similar "big box" retail stores point out the direct employment that is created by such stores, they almost never take into account the broader economic impacts to the surrounding area. One study of three cities and seven counties in Iowa found that at "84% of all sales at the Wal-Mart stores come [at the expense of] existing businesses within the counties." (Thomas Muller and Elizabeth Humstone, What Happened When Wal-Mart Came to Town? A Report on Three Iowa Communities with a Statistical Analysis of Seven Iowa Counties, For the National Trust For Historic Preservation, May, 1996, pp.8.)

Each dollar of sales at "big box" retailers generates less employment than each dollar of sales at local retailers. The net result is that "although there is an initial increase in general merchandise employment in the year Wal-Mart opens, this gain is at least partially offset over time as employment in this category declines. Other retail sectors competitive with Wal-Mart were found to have employment gains below what would be expected given local economic growth." (Muller, ibid, pp.39)

Other studies have indicated that "in exchange for 1 new part-time job in a mega-discount chain, about 1 1/2 full time jobs were eliminated in smaller stores." (Report on Wal-Martís Entrance to the Market in Lake Placid, NY area. Residents for Responsible Grow, Lake Placid, 1994, pp.4. From Edward Shils and George Taylor, Measuring the Economic and Sociological Impact of the Mega-Retail Discount Chains on Small Enterprise in Urban, Suburban, and Rural Communities, Wharton Entrepreneurial Center, U. of Pennsylvania, Feb 7, 1997).

According to an article in the American Planning Association Journal, concerning a Wal-Mart development in Talbot County Maryland, "it was noted that the numbers of establishments and employees have declined since the store chainís arrival in 1991...7 of the 13 industries that might compete with Wal-Mart experienced declines in employment totaling 435 jobs." "While representatives of Wal-Mart claim to bring jobs and prosperity to localities, a closer look at the larger picture shows that, in the case of Talbot County, there has been a net loss of jobs...". (American Planning Association, New and Views, Economic Development Division, October 1996, Kevin Harris, When Wal-Mart Comes to Town)

The studies of "big box" retailers consistently indicate that any stores in direct competition with "big box" predatory pricing can expect significant declines. While 29 North already hosts "big box" retail, downtown Charlottesville is buffered from its impacts by the distance and unpleasentness of strip development on route 29. Placing "big box" development on the southern border of the city may or may not represent a net gain for the county, but there is no doubting, based on extensive study in other communities, that the City of Charlottesville and its downtown businesses will suffer. Businesses in competition with the "big box" retailer will suffer most.

The Charlottesville/ Albemarle area has a strong economy and low unemployment, therefore the negative economic impacts of "big box" retail are likely to be largely absorbed in overall growth trends. But given our strong employment position, why pursue "big box" development? The "associate" positions offered by "big box" retailers come without job security or benefits associated with full time employment in a civilized society.

Brass Inc. recognizes that a Community Service designation (NOT the "big box") will result in more jobs. Such jobs are likely to be of much higher quality than "big box" retail. The purported benefits of the "big box" are based solely on the site itself and ignore broader regional influences. The broader impacts of "big box" development should be taken seriously.

A: Direct sale tax revenues from "big box" development will go directly to the county. However, studies in other areas suggest that negative impacts in the broader region can offset these gains. As a result of the predatory practices of "big box" retailers, other stores in direct competition can expect to see a reduction in sales and property values. As a result, there may or may not be an overall increase in taxable economic activity, particularly over the long run. Property values in some Iowa towns with Wal-Marts near their commercial centers have declined by 16% to 20%. (Muller, ibid, pp.7). The Iowa study further indicates that "although the local tax base added about $2 million with each Wal-Mart, the decline in retail stores following the opening had a depressing effect of property values in downtowns and on shopping strips, probably offsetting the gains from the Wal-Mart property." (Muller, ibid, p. 46)

Again, the growth of Albemarle County may absorb these negative impacts, but the city will suffer. Given that we have so many better choices, why invite economic growth with such negative impacts?

A: "Big box" development does stimulate growth of its own stores to its own benefit, but the greater geographical area does not necessarily benefit. The State Environmental Board in St. Albans Vermont projected that the cost of a proposed Wal-Mart project would be "more than 2.5 dollars of public cost for each dollar of public benefit" (St. Albans Group and Wal-Mart Stores, Inc., Findings of Fact, Conclusions of Law, and Order, Application #6F0471-EB, St. Albans).

The study of Iowa towns and counties found that "there were clearly identified losses in downtown stores after Wal-Mart opened. General merchandise stores were most affected. Other types of stores that closed include: automotive stores, hardware stores, drug stores, shoe stores, apparel stores, and sporting goods stores. Some restaurant closings were also noted." (Muller, ibid, pp.6)

The Planning Board of New Paltz New York, in considering a proposed Wal-Mart near their city, found that "the proposed plaza is inconsistent with the development goals set forth by the Comprehensive Plan...the introduction of a big box retailer to New Paltz would result in a shift in the location of businesses, a movement of trade away from the traditional downtown centers, a decline of other retail centers...large percentages of downtown businesses would be harmed, older buildings may become vacant...and any unique community character would be undermined and instead replaced by the lowest common denominator". (New Paltz, NY, Planning Board Decision, March 11, 1996, Economic and Community Impacts: Proposed Wal-Mart)

In considering a Wal-Mart near their downtown, the Planning Board of North Elba, New York, commissioned a study. Upon obtaining the results of that study, the Planning Board ruled that "the project will likely result in a large amount of impacted retail space, which could take up to 14 years to refill, over 20,000 s.f. of which could become chronically vacant...such loss would have economic impacts on the remaining merchants, resulting in a downward spiral in which increasing numbers of businesses close their doors." (North Elba Planning Commission, North Elba New York, May, 1995)

In Greenfield Massachusetts, "an Economic Impact Assessment of the construction of a 134,272 s.f. Wal-Mart -- paid for by Wal-Mart -- found that their project would lead to a loss of 239,000 s.f. in retail space, with a loss of nearly $36 million to existing businesses, and instead of 177 new jobs at Wal-Mart, 148 jobs would be lost at other businesses, leaving a net of 29 jobs..." (Economic Impact Studies, A Sampler: Studies of Big Box Retailers Conducted in Various Communities, pp.25, Sprawl-Busters, 21 Grinnel St., Greenfield MA, 01301, www.sprawl-busters.com, 413-772-6289)

According to Kenneth Stone, an Iowa State University Professor who has spent many years studying Wal-Mart, "Some people misinterpret the sales changes after a Wal-Mart store comes into a town. They observe an increase in general merchandise sales and in total sales and believe that all is well. But, upon further study, it is clear that Wal-Mart gains are at the expense of other merchants." (Sprawl-Busters, ibid, pp.25)

A final note of caution should be taken from a report issued by the Congressional Research Service that "gains in a townís retail trade area that are documented in the first four years after a Wal-Mart arrives may actually decline in 25 to 30 percent of the cases after four years". (John Hornbeck, The Discount Retail Industry and Its Effect on Small Towns and Rural Communities, Congressional Research Service, CRS Report for Congress, January 18, 1994)

"Big box" retailers can also be highly mobile, moving their stores to suite their highest profit with no concern for local impacts. Wal-Mart in particular has over 330 empty stores. "Wal-Mart leaves its dead stores behind, much to the consternation of local officials. Wal-Mart has shed hundreds of stores just to move into bigger facilities with wider aisles. Most of these relocations have been in towns where Wal-Mart shuts down the discount store to open up a larger superstore across the street, down the block, or just over the town line...These buildings are spread across 31 states. Only 17% of these stores are owned by Wal-Mart, 83% are leased. This means that 10.5% of Wal-Mart's total stores are empty as of this month... In February, 54 of the stores listed are "new" to the list. "Quite frankly," admitted Wal-Mart's former Executive Vice President for Real Estate Construction, Tom Seay, "I think the fact that we relocate stores--and we relocate a lot of them--is a well-known fact in the development community..." (Sprawl-Busters, ibid, www.sprawl-busters.com)

A: It would appear that the driving force behind this debate is the fact that one wealthy developer has not been able to sell his property. If the county Comprehensive Plan is to be amended for the sake of private interests, shouldnít such privileges be extended to the rest of us?

Studies compiled by Alexis Zeigler, lexus51@juno.com (804) 245-8759