Urban Walmart taken to task, hearing scheduled

By Heather McGraw

A study that has come under fire, co-written by faculty and students at Loyola University Chicago and a professor at the University of Illinois at Chicago, is at the forefront of a hearing scheduled on Feb. 3, which could affect the future of Walmart stores in urban settings such as Chicago.

The study focuses on a location in Chicago’s Austin neighborhood—the first Walmart to open in a high density metropolitan area.

According to the study’s findings, Wal-Mart’s opening has resulted in the loss of about 300 jobs within a five mile radius.

David Merriman, a professor of economics and public administration at UIC is not the sole author of the 2009 study his testimony will focus on, but he has taken on the role of representative for the hearing in New York City.

“The point of me testifying is to get the focus on facts and for people not to have knee-jerk or symbolic emotional responses,” Merriman said.

According to him, the study is being used at the hearing because many people think it is a good model for what could happen in New York City if Walmart were to open a store there.

“Frankly, I’ve been surprised with how controversial this research has been,” Merriman said. “It’s become a very intensely politicized issue.”

Steven V. Restivo, director of Community Affairs for Walmart, said the company is questioning the hearing’s intention and the validity of the 2009 study.

Restivo said the study is flawed and cites its failure to mention new businesses that came into the Austin community as a major problem—one he said Merriman has admitted to.

“We don’t have a store or an announced project in New York City, so to some extent the hearing is a hypothetical exercise from our standpoint,” Restivo said.

However, Merriman said he thinks the right time for discussion is now.

“I think it makes a lot of sense to start talking about the issues very early and start thinking about the general question of how you want to do economic development and what the role of government is in organizing the private sector,” Merriman said.

According to Restivo, although Walmart has not officially announced plans for any store in New York City yet, the company has started exploring the possibilities the area could provide.

“Right now we are evaluating lots of opportunities small, medium [and] large across all five boroughs,” Restivo said. “We know today we have lots of customers in New York City even without having a physical presence .”

Alderman Anthony Beale (9th Ward) is a proponent of urban Walmarts and led a successful initiative to open another store in his ward.

“I firmly believe when you have a community such as mine that has a food desert—[a community that] doesn’t have adequate fresh produce and those types of goods—we’re doing ourselves a disservice by not allowing Walmart to come in and fill that void,” Beale said.

Restivo and Beale refer to a January 2010 study by Mari Gallagher Research and Consulting Group that shows 22 new businesses that have opened since the Austin neighborhood Walmart moved in 2006.

“That is positive proof that Walmart brings businesses, [it helps] businesses grow and it doesn’t harm other businesses in the area,” Beale said.

According to Restivo, positive results are actually a recurring trend when Walmart comes to town.

“We have more than 4,000 stores across the country,” Restivo said. “What we find in the majority of cases is our stores are actually a magnet for growth and development.”

Beale believes more urban areas should consider letting Walmart open stores in their neighborhoods.

“Most of your urban communities are looking for opportunities for change, and Walmart is bringing that change,” Beale said.