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Coalition for a Better Jefferson
|Coalition for a Better Jefferson
This advertisement appeared in the November 25, 2002 Daily Jefferson County Union, as paid for by the Coalition for a Better Jefferson.
DO WE REALLY WANT A WAL-MART IN JEFFERSON?
Here Are the Facts That Answer The Most Important Questions About the Impact A Wal-Mart Would Have On Jefferson:
Q. What Exactly Is Wal-Mart?
A. Wal-Mart is the largest retailer in the world with annual sales totaling over $137.6 billion. They are larger than Sears, J.C. Penney and K-Mart combined. With approximately 950,000 employees, Wal-Mart is the largest employer in the U.S. after the federal government. Each year they hire 550,000 new employees replacing those lost to rapid turnover and to staff new stores. A Wal-Mart Super Center of approximately 159,000 sq. ft. is equal in size to 4-6 retail supermarkets. There are presently close to 4,000 Wal-Mart stores in the U.S. and their announced goal is to open one new Super Center every day, 365 days a year, beginning in 2004.
It is Wal-Mart's intent to dominate retailing in this country and their strategy is already well established - the only competition Wal-Mart wants is Wal-Mart itself.
Q. Why Does Wal-Mart Want To Locate In Jefferson?
A. On the surface this is difficult to understand when they already have a Super Center 12 miles away in Watertown and another store just 11 miles away in Whitewater. Others in the area include stores in Janesville (21 miles away). Delafield (21 miles away) and Stoughton (23 miles away). This is a marketing strategy called "gap filling". The Wal-Mart strategy initially focused on smaller, rural communities where they didn't face the stiffer competition found in larger cities and where they could more easily dominate. Through sheer size and predatory pricing, they achieved market dominance by forcing literally thousands of smaller retailers out of business. They opened stores wherever the opportunity presented itself. This did not, however, give them the market saturation they sought, so they are now going back and "filling in the gaps" in the market coverage. Wal-Mart aims to be its own competition. They don't want anyone to have to drive more than 20 miles to get to a Wal-Mart.
Apparently, even less if you look at what they are trying to do in this area. As this "gap filling" proceeds, smaller retailers continue to be squeezed out of business and Wal-Mart achieves the market dominance it seeks. The net effect is to block competition in smaller markets such as Jefferson.
Q. Will Wal-Mart Bring More Shoppers To Jefferson?
A. Based on all of the data and evidence available, the answer is NO. All studies show conclusively that when Wal-Mart stores are reasonably close together - 20 miles or less - most sales come from merchants in the same market as Wal-Mart. The dollar volume of sales does not increase, but is redistributed with Wal-Mart taking the bulk of the sales in most retail categories. This ultimately forces smaller existing retailers out of business. The existing "retail pie" in Jefferson is relatively static. It cannot expand without a significant increase in population and/or an increase in per capita income. Since the last census, Jefferson's population has grown by 1320 people, or 18%. Our normal growth rate is 7-9%. The increase this time was due in part to the group homes built by St. Coletta's within the City. However, the Township of Jefferson lost 494 people - a decrease of 9.4%. Per capita income has increased only slightly. There isn't going to be any big increase in shopper traffic. Whatever additional shoppers might come are "destination shoppers". They would be coming specifically to buy at Wal-Mart. With its location outside of the city, very little additional traffic is going to come into downtown Jefferson. Shoppers coming from Lake Mills, Cambridge, Fort Atkinson or Johnson Creek for example, will drive to the Wal-Mart location south of town, do their shopping, turn around and head back to their communities. Most of the shopper traffic that would shop at Wal-Mart is probably already coming to Jefferson to shop. It will not be incremental traffic to any meaningful extent. All that will happen is that shoppers already coming to Jefferson will transfer their purchases from existing merchants to Wal-Mart. The bottom line is the demonstrated fact that 84% of Wal-Mart's business comes from existing businesses in the community.
Not only will existing Jefferson businesses not benefit from Wal-Mart's presence, they will be negatively impacted and many will be forced to close. This is what has occurred in hundreds of small communities across the country and there is no reason to believe that it won't happen here.
Q. Will Existing Businesses Benefit From Increased Shopper Traffic?
A. With a Wal-Mart location outside of the city, very little additional shopper traffic is going to come into downtown Jefferson to shop. Shopper traffic will come from Fort Atkinson, Cambridge, Lake Mills, and Johnson Creek. It must be pointed out however, that much of that same shopper traffic is already coming to Jefferson to shop. It has been suggested that our restaurants, fast food outlets and gas stations might benefit, but it must be pointed out that a Wal-Mart Super Center has fast food available within the store and gas pumps on the perimeter and the proposed location outside of the city does not lend itself well to driving into town just for a sandwich or a tank of gas. Some Wal-Mart Super Centers even have their own gas pumps. The bottom line is the demonstrated fact that on average, 84% of Wal-Mart's business comes from existing businesses in the community. In hearings, Wal-Mart has countered the concern over small business losses by arguing that Wal-Mart "captures" sales from other markets, therefore mitigating this negative impact. This is a false premise on two separate points. One, the so-called "captured sales" goes to Wal-Mart. Second, once Wal-Mart stores in a region reach a saturation level, it's no longer possible to "rob Peter to pay Paul". Any "recapture" of sales from outside the primary market is unrealistic when there are Wal-Marts in every direction within a 15 mile radius.
Q. Does Wal-Mart Really Offer The Lowest Prices?
A. Not necessarily. Despite the claim that "we give something back by keeping our prices low", there is no evidence that Wal-Mart consistently beats its competition price-wise. When Wal-Mart was asked by the Advertising Review Board to justify its slogan, "Always the Lowest Price, Always", they dropped the slogan! There have been many legal cases brought against Wal-Mart for so-called predatory pricing (i.e. pricing below actual costs meant to drive competition out of business). A recent example involved the West Bend Pharmacy who found that they had lost several thousands of dollars on milk sales. Investigators determined that Wal-Mart was not only selling milk at 30 cents a gallon less than the Pharmacy but selling milk at a price below their costs with the intent of taking business away from a competitor. The resultant lawsuit led to an announcement, just two weeks prior to the scheduled trial that "Wal-Mart agreed to take steps to comply with the law." It has been documented time and time again that Wal-Mart prices tend to be higher in areas where they have succeeded in driving competition from the market.
Remember, Wal-Mart advertises, "Always Low Prices, Always." They're not saying "Always the Lowest Prices, Always." Wal-Mart prices for some items vary even between Wal-Mart stores located not more than 20 miles of each other. In a recent shopping survey comparing 20 items sold by Wal-Mart in Watertown vs. K-Mart, Piggly Wiggly, Sentry and County Market, Wal-Mart had a marginally lower price-less than 20 cents lower on average - on only seven of the 20 items. Driving 10 or more miles to save 15 cents or 20 cents on any item you can buy right here at home doesn't make much sense. It is a fact that Wal-Mart prices are higher in small towns than in larger, more competitive suburban markets. If Wal-Mart comes to town you may see lower pricing until the competition is squashed, then be prepared for an across the board return to normal pricing.
Q. Will A Wal-Mart Increase Jefferson's Tax Base?
A. A Wal-Mart Super Center of an estimated 159,000 sq. ft. is projected to generate somewhere in the neighborhood of $200,000 a year in property taxes to the city. This continues to be a major Wal-Mart selling point and, on the surface, can certainly look good to local officials. However, based on study after study, report after report of actual results, the bottom line in most small communities that Wal-Mart enters, is a net loss in property tax revenue. Why? The number of existing retail businesses eventually forced to close, represent a loss in property taxes that could add up to more taxes lost than those generated by Wal-Mart. Let's look at Jefferson specifically. For purposes of illustration, assume that Wal-Mart will represent $200,000 annually in property taxes to the city.
Now consider a worst case scenario in which several retailers are eventually forced to close. These businesses would have paid (based on figures from City Tax rolls) a total of $116,800.00 in property taxes in the year 2001. Suddenly, Wal-Mart's property tax impact dwindles to $83,200.00. Without the shopper traffic generated by these local businesses there is little doubt that the rest of the smaller retailers in Jefferson will also eventually wither and die. Buildings that are vacant now will have little chance of being occupied if a Wal-Mart is located here. That will erase the remaining differential in a hurry. In addition, if the shopping center on the south side of town were to close, causing the eventual vacating of those buildings, the city is left facing a declining property value and property tax value there. There's still another aspect to this tax base question. The presence of a Wal-Mart Super Center would represent a major deterrent to any new food market or for that matter any other retail business that would be in direct competition with Wal-Mart. At a time when Jefferson has devoted time and dollars to its downtown renovation, with the Puerner Building renovation alone being nearly one million dollars, will new businesses locate to the downtown area if a Wal-Mart Super Center is located on the outside of town? It definitely would be a major impediment to anyone considering opening a business in downtown Jefferson. Anyone familiar with retail business in Jefferson is well aware of the impact the arrival of a Super Center would have on downtown retail businesses and on the vitality of the downtown business district itself. Existing businesses might be forced to close and then what would become of the downtown renovation project and TIF funding?
Q. What Would Be The Wal-Mart Impact On Municipal Services?
A. It is going to cost thousands of dollars to extend water, sewer, utilities etc. out to the Wal-Mart Site. Access roads, curb and gutter, stop lights and more, add still to the cost. Let's ask our City Council how much all of this is estimated to cost and who is going to pay for it. Next, have there been any discussions concerning tax abatements as incentives to locate here? Who bought the property? Who will build the Super Center itself? Who will actually own it? Wal-Mart doesn't own its own stores, preferring to lease from a developer. They don't want any financial ownership stake in a community. If things go sour, they pack up and leave someone else holding the bag. There are currently 400+ empty Wal-Marts around the country right now. A Wal-Mart located on the outskirts of Jefferson simply leads to more sprawl and eventually causes blight closer to the City. Sprawl has been shown to lead to less efficient police and fire protection due to the longer distances that must be traveled per call. In addition, there is plenty of evidence to indicate that Wal-Mart Super Centers with their gigantic parking lot and a 24 hours a day, seven days a week operation seem to attract increased criminal activity. With budget cuts, Jefferson's Police Department, as excellent as it is, is already understaffed and a Wal-Mart presence will only compound this problem.
Q. If A Wal-Mart Locates In Jefferson What Impact Will It Have On Neighboring Communities?
A. Let's say Jefferson allows a Wal-Mart Super Center of 159,000 sq ft. to open. The impact on most local businesses will be devastating and will probably force a majority of them to close. The surrounding communities of Fort Atkinson, Cambridge and Lake Mills would also be impacted. A loss of 25-30% in retail sales would not be uncommon for businesses in these outlying areas. No one can stay active in retail sales with losses such as these, as most small retail businesses work on a very small margin of profit. Most small businesses are independently owned and operated and do not have stockholders like Wal-Mart and other corporate businesses.
Q. Will A Wal-Mart Mean More Employment For Jefferson?
A. No, not long term. Three different studies show that for every job a Wal-Mart creates, 1.5 jobs are lost elsewhere in the community. With relatively low unemployment in the Jefferson area, Wal-Mart would have to initially staff its store mainly with people from outside the immediate area. These are part-time jobs paying an average of $6.50-$7.50 an hour with no benefits. Wal-Mart boasts that "70% of the jobs will be fulltime", but at the same time they define "full-time" as no more than 28 hours a week. Virtually all independent analysis demonstrate that a Wal-Mart entry into smaller market economies eventually leads to fewer and lower paying jobs. Wal-Mart replaces full-time jobs paying family supporting wages and acceptable benefits with part-time jobs paying minimum wages and inadequate health care benefits. Workers earning a living wage increase our property tax base through property rentals, direct purchase of property, deposits in local banks and through additional purchasing power that in turn supports other businesses and additional jobs. Workers being paid a living wage and living in this community, more often than not, have checking and savings accounts, mortgages and loans at local financial institutions. Every dollar deposited in local banks is recycled five times right here in Jefferson in the form of loans. Wal-Mart deposits go directly to Bentonville, Arkansas. Wal-Mart's employment practices result in rapid turnover with 70% of their employees leaving within the first year due to a lack of recognition, sub par working conditions and inadequate pay. So-called full-time employees are eligible for benefits, but the health insurance package is so expensive (employees pay 35% - almost double the national average) that less than half of Wal-Mart employees opt to buy it. So, all documented evidence points to the facts that it is a serious mistake to conclude that Wal-Mart coming to town would create jobs that are net additions to the workforce.
Q. Can Wal-Mart Be Prevented From Opening A Super Center?
A. There are over 118 communities in 38 states that have successfully rejected so called "box" stores such as Wal-Mart. In our area they include Brookfield, Waukesha, Racine and most recently Fort Atkinson, to name a few. Most often this is accomplished through zoning ordinances that limit the square footage allowed or by simply refusing to extend utilities or change zoning. If a local Planning Commission or City Council uses its land use code and zoning code to list the findings of facts it used to reach a negative decision about a very large scale project, the courts are reluctant to substitute their judgment for that of local officials. It is only if a commission and/or council acts in an "arbitrary or capricious" manner that a local decision is at risk. "Arbitrary or capricious" can be defined, for example, as a board decision made without adequate public hearings and in most cases without referendums.
Usually, with the help of the City Attorney, a local board can draw up a tight decision that lists valid reasons such as concern over public safety (e.g. undue traffic congestion) or conflict with the zoning goals of a community, the character and scale of what's to be built, etc. and such a decision will withstand a legal challenge. The reality also is that if boards rule in favor of developments that are harmful to the public welfare, they can now expect their own citizens to sue them as has already occurred in several cases.
It is apparent that discussions continue concerning the possibility of a Wal-Mart Super Center being located here in Jefferson. Comments by our Mayor and Council President and reports of meetings with Wal-Mart representatives would indicate at least an official movement in this direction. The answer to the question, "Do we want a Wal-Mart in Jefferson?" can perhaps be best answered by asking what Wal-Mart would bring us that we don't have now. The documented material presented for you here provides clear evidence that a Wal-Mart coming to Jefferson would not provide anything that is not available to us now but would bring us a great deal of what we don't want. Based on the available in-depth, independent studies and extensive evidence that clearly illustrate the negative impact that a Wal-Mart has been known to have on a smaller rural community like ours, we wonder if anyone on the City Council, Planning Commission or Zoning Commission are aware that materials concerning this subject are available to them.
All of the observations made here are based on the facts extracted from the detailed studies conducted by independent, impartial researchers that track the impact that Wal-Mart has had on small market communities like ours over the past 10 years or so. Interviews with a representative sampling of people in this community led to the development of the questions that most people seemed to want the answers to as well as answers to claims being made by those supporting the benefits of a Wal-Mart here.
We have just invested close to two million dollars in the renovation of our downtown businesses. With diligence and the city's support, our downtown is starting to show signs of revitalization. And what will become of the City Master Plan created in 1998 at a cost of $25,000.00 that shows this area as one for potential residential development? Will we have to change our plans every so many years at an additional cost to taxpayers whenever a new "box" comes into the picture? It makes no sense whatsoever to even consider allowing something that has been shown to negatively impact existing businesses, to come into our city. Our local officials have an obligation to tell us what the current status of the proposed Wal-Mart project is at this time, and, if in fact they support it. If so, we have the right to ask for their reasons for believing that allowing (much less promoting) a Wal-Mart to locate here is in the best interest of this city and its citizens. Wal-Mart and/or any interested developer must be required, through an independent economic feasibility study, to establish evidence of how the project would promote the general welfare of the city as well as the surrounding communities.
COALITION FOR A BETTER JEFFERSON
Contact your representative on the City Council. Aldermen's names, districts and telephone numbers are listed here. Ask them where they stand on this issue, whether or not they favor a Wal-Mart and if so, why? Contact Mayor Arnie Brawders and ask him if he supports a Wal-Mart in Jefferson and if so, why? Give City Administrator Dave Schornack a call and ask him the same question. Contact Bob Coffman, Council President and see if he wants a Wal-Mart in Jefferson and if so, why? Talk about this situation with family, friends, and local business owners. Sign one of the petitions stating opposition to a Wal-Mart Super Center here in Jefferson. Be sure that people are aware of what is going on and what is at stake in Jefferson.
- ELECTED OFFICIALS -
CONTACT YOUR MAYOR AND ALDERMAN, AND ASK WHERE HE/SHE STANDS ON THE
MATTER OF ALLOWING A WAL-MART SUPER CENTER TO LOCATE IN JEFFERSON
Arnold M. Brawders, Term Expires 2004 - 335 East Linden Drive, Phone 674-3981
Susanne Johann, Term Expires 2003 - 431 E. Dodge Street, Phone 674-5609
Dale Oppermann, Term Expires 2003 - 1117 Hillebrand Drive, Phone 674-2495
Bob Coffman (Council President), Term Expires 2004 - 523 E. Linden Avenue, Phone 674-4855
David Carnes, Term Expires 2004 - 1208 Wisconsin Drive, Apt. A, Phone 674-5774
DISTRICT "A" - Collin Stevens, Term Expires 2004 - 219 N. West Avenue, Phone 674-5263
DISTRICT "B" - John C. Wagner, Term Expires 2003 - 123 East Mechanic Street, Phone 674-3844
DISTRICT "C" - Chris Gang, Term Expires 2004 - 723 Pinecrest Drive, Phone 674-4962
DISTRICT "D" - David Stewart, Term Expires 2003 - 341 E. Linden Drive, Phone 674-3533
What Happened When Wal-Mart Came To Town?
Reported by National Trust for Historic Preservation. Tom Muller and Elizabeth Humstone
Wal-Mart Loses Sweeping Defeat In Vermont
Burlington (VT) Free Press
The Impacts of Superstores on Small Business: A Case Study of Wal-Mart
Testimony of Thomas Muller, PhD, Before House Small Business Committee
Wal-Mart: 10 Years After
Dr. Kenneth Stone, PhD, Iowa State University
Analysis of Impact Proposed Wal-Mart Development on City of Concord
Katin, Regan & Mulchly, Inc. (Independent Market Research Firm)
Impact of the Wal-Mart Phenomenon on Rural Communities
National Public Policy Education Conference - Kenneth Stone, PhD, Iowa State University
Impact of an Anticipated Wal-Mart on the Northern Neck of Virginia
Dr. Thomas Muller, PhD, Fairfax, VA
Local Government Control of Commercial Development
Michael D Wyatt, Department of Urban and Regional Planning, University of Wisconsin, Madison
The Impact of Wal-Mart Stores on Other Business in Iowa
Dr. Kenneth Stone, PhD, Department of Economics, Iowa State University
Anticipated Socio-Economic Impact of the Proposed Wal-Mart Super Center on Clark County NV
C. Jeffrey Waddoups, PhD, Director Center for Community & Labor Research, Henderson, NV
The Case Against Sprawl
From the Book "Slam-Dunking Wal-Mart" by Al Norman - ©1999; Sprawl-Busters