ANDERSON AUTOMOTIVE WAL-MART TESTIMONY
by Benn Ray
(originally submitted to Baltimore City Council on September 23, 2010)
Due to the 3 minute time constraints on community testimony at the City Council’s Land Use Committee hearing on the 25th St. Station, I was unable to deliver my full testimony regarding the 25th St. Station project being proposed for Remington.
As such, I offer it here in full."
My name is Benn Ray. I am the president of The Hampden Village Merchants Association (HVMA), a Remington resident, a co-founder of Bmore Local and an area small business owner.
My frustration and concern about the 25th Street Station development is that the conversation regarding it has not been an honest one.
As a small business owner and the president of a business association comprised largely of small, independent, locally owned businesses, I can tell you that I completely sympathize with the difficulties Mr. Mortimer has faced with Anderson Automotive.
In fact, I could fill a month of these hearings with testimony from HVMA members about just how difficult it is for small businesses out there. And while we surely appreciate the concern we hear from our elected officials about how important small business is, how we need to look after the needs of small business, how small business is the backbone of the American economy, we are getting very frustrated that when posed with the opportunity to do anything for small businesses, these same elected officials consistently fail to help – opting instead to vote for the interests of large, nameless, faceless corporate enterprises.
I can appreciate that Mr. Mortimer needs to sell his Remington property. And I can tell you that when I heard that Anderson was going to be developed into a retail complex, I was as excited as anyone. Then, as details began to be revealed, I became increasingly disappointed at what a missed opportunity this 25th Street Station was becoming. Instead of developing unique, special retail that would fit in with the fabric of the area, Mr. Walker’s team took the opposite approach – to create a retail complex that will at best dominate and at worst destroy North Baltimore’s business community. Instead of getting a Belvedere Square, we’re being offered another Port Covington.
No one wants to see Mr. Mortimer’s property sit vacant, but this PUD process is flawed in that it incentivizes landowners to pursue this sort of development. This PUD, should it be granted by the council, will have the immediate affect to increase his property value. So property owners like Mr. Mortimer are actually encouraged to pursue PUD legislation for their properties instead of seeking out development that fits the integrity of the communities in which their property resides.
Unfortunately, due to legislation passed by the city council just weeks before the development was announced, creating a special Focus Tax Credit zone, this property will not generate tax revenue for Baltimore city. It is my understanding that should Mr. Mortimer’s property sit vacant while a developer with a more neighborhood-friendly project is found, Baltimore will generate more property tax revenue off that vacant parcel than it will once 25th St. Station is complete, despite what the developers have disingenuously and misleadingly tried to argue.
As residents, we’ve been told that we need this development. But that’s simply not true. We don’t. North Baltimore does not need big box development at all, and this is precisely why we’re getting it.
There is a Target less than three miles from the proposed site and a Wal-Mart in Port Covington – a straight bus shot through the neighborhood. So if Remington “needs” this development, are we proposing that every Baltimore city neighborhood is entitled to a Wal-Mart? Can we even begin to comprehend what that would do economically to the city? Can we even begin to imagine what a Baltimore with a Wal-Mart and Lowes in every city neighborhood would look like?
Within a 2 mile radius of this development, there are over a half-dozen hardware stores that, like Mr. Mortimer, have worked long and hard to serve their community.
There are over a half dozen grocery stores ranging from discount groceries to locally grown organic foods. This is not a food desert.
North Baltimore is already well-served by the sort of retail this development seeks to bring in. And the clustering of these businesses suggests to large, out of state corporate interests that there are established markets here that they can exploit and dominate – at the expense of the small business retail that has worked hard here for years – in some cases, for generations.
Despite what we’ve been told by the Baltimore Development Corporation (BDC) and this project’s developers, Wal-mart and Lowes is coming into Remington not because we need grocery stores and hardware stores. They are coming because we already have them.
Mr. Brody, of the BDC, has said he’ll still shop at local, small business stores as well as the big box stores. I am shocked Mr. Brody doesn’t seem to understand how business works. There are not many business owners I know who can afford to lose 5% of their business these days, let alone a more likely 40%. Mr. Brody should know that right now, he has the choice to shop at a Wal-Mart in Baltimore city and a Target too (less than a 5 minute drive from where this Wal-Mart is being proposed), as well as other small businesses. But once this development opens, it will only be a matter of months before he no longer has the option to shop at local businesses that compete with Wal-Mart or Lowes.
Right now, city residents have more retail options than they will after 25th St. Station opens.
I am all for competition, but a small, independent business trying to go head to head against a giant, out of state, corporation isn’t a competition, it’s suicide. Economic suicide. And anyone suggesting otherwise does not understand the nature of the business on which they are speaking.
The result of this development will be what is called “The Wal-Mart Effect.” And it’s called that for a reason.
In 2009 a Loyola University study in Chicago found:
The city’s one and only Wal-Mart opened in the Austin neighborhood in 2006. A new study by researchers from Loyola and UIC claims 82 businesses within a four-mile radius of the store have closed, thanks -at least in part- to the mega retailer’s presence. That, the study’s authors say, has cost the community nearly 300 jobs, about as many as Wal-Mart added.
“The message is Wal-Mart is not a panacea. What Wal-Mart will do is going to change the kind of businesses you have in your area. It will create some jobs but force others out of business or prevent them from opening,” said David Merriman, Department of Economics, University of Illinois at Chicago.
A 2007 UC Berkeley study found that this sort of development also drives down wages.
There is strong evidence that jobs created by Wal-Mart in metropolitan areas pay less and are less likely to offer benefits than those they replace. Controlling for differences in geographic location, Wal-Mart workers earn an estimated 12.4 percent less than retail workers as a whole, and 14.5 percent less than workers in large retail in general. Several recent studies have found that the entry of Wal-Mart into a county reduces both average and aggregate earnings of retail workers and reduces the share of retail workers with health coverage on the job. The impact is not only one of substitution of higher wage for lower wage retail jobs, but also a reduction in wages among competitors. As a result of lower compensation, Wal-Mart workers make greater use of public health and welfare programs compared to retail workers as a whole, transferring costs to taxpayers.
There is absolutely no evidence to support the statement that this development creates jobs. In fact, most evidence suggests that this development will replace existing jobs with lower-paying, lower-benefit employment that will result in greater strain of social safety net programs like foodstamps. And this is precisely why so many people have problems with the type of development Mr. Walker and his team are offering.
I am all for developing Mr. Mortimer’s property. However, development should be good for Baltimore and at the very least, tax neutral. As it currently looks, 25th St. Station is tax negative. And it will disrupt and decimate the small business community of North Baltimore. 25th St. Station is bad for Baltimore.
Even Mr. Mortimer has stated that he has asked, with regard to his property, “What’s the best thing we can do for the community?” Common sense and data both show that Anderson Automotive’s Wal-Mart legacy is one of the worst things we can do for the community.