City Council considers impact of Wal-Mart

Concerns about how big-box retailer would affect small businesses dominated hearing. On February 3, 2011, the City Council’s Community Development Committee, Small Business Committee, and Economic Development Committee held a joint oversight hearing to debate Wal- Mart’s impact on the local community if the big-box retailer opened a store in the City. The Council convened the hearing in response to Wal-Mart’s renewed campaign to open a store in the City. Community opposition caused Wal-Mart to withdraw previous attempts to open a store in Queens and Staten Island. One site that Wal-Mart is rumored to be considering is East New York’s Gateway II shopping center. The Council in April 2009 approved the Related Companies’ Gateway II project on a site adjacent to Gateway Center. The proposal included affordable housing and more than 600,000 sq.ft. of retail space.

Wal-Mart declined to attend the hearing, but the company’s senior manager, Philip H. Serghini, submitted a letter to the Council. Serghini’s letter highlighted Wal- Mart’s job-creating ability and noted that the hearing would not address the impact that “hundreds” of other existing large retailers have had on the City’s small businesses.

At the hearing, Speaker Christine C. Quinn stated that Wal-Mart was unlike any other company in terms of size, revenue, and ability to “move the market,” and referenced studies describing Wal-Mart’s “predatory” business practices. Responding to assertions that Wal-Mart would bring jobs to the City, Quinn claimed that in other cities for every two jobs created by Wal-Mart, three jobs were lost in those same areas.

Council Member Charles Barron, whose district includes the Gateway II site, claimed that Related had made assurances during the Gateway II approval process that the shopping center would not include a Wal-Mart store. Barron characterized Wal-Mart as a “roving plantation” and said that his constituents would not be “slave workers.

The majority of the public testimony focused on the potentially damaging effect that Wal-Mart would have on local businesses. Nelson Eusebio, representing the National Supermarkets Association, testified that small businesses could not compete with Wal-Mart because it “doesn’t play fair” and does not patronize local distributors. Hunter College professor Tom Angotti testified that Wal-Mart’s presence in the City “could trigger a snowball effect” that would undermine the local economy and have “devastating effects on our neighborhoods.” Angotti recommended, among other things, that the City amend the zoning resolution to require discretionary land use review for all large retailers regardless of the size of a proposed store. Angotti also helped prepare a report on Wal-Mart’s economic impacts co-sponsored by the Center for Community Planning and Development and Public Advocate Bill de Blasio.

Charles Fisher, founder of the Hip-Hop Summit Youth Council, supported Wal-Mart and noted that the company offered the community a host of benefits, including job opportunities, minority contracts, affordable goods, and scholarship opportunities. Fisher said that the City was not “Nazi Germany” and that discrimination against Wal- Mart or any other legitimate business was unfair. Andy Sullivan, founder of the 9/11 Hard Hat Pledge, pointed out that Wal-Mart had recently reached a labor deal with the Building and Construction Trades Council of Greater New York. Sullivan said the City should embrace Wal-Mart because of the company’s ability to drive the economy.

Despite the hearing, the City Council would not necessarily be able to prevent Wal-Mart from moving to the City. Wal-Mart would not need the Council’s approval as long as its store complied with the zoning resolution and building code.

Council: Oversight Hearing — When Wal-Mart Comes to Town: The Effect on Small Businesses and Communities (Feb. 3, 2011).

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