Wal-Mart says it won't build three stores it had planned for the District of Columbia if lawmakers approve a bill that would force the retailer to pay its employees at least $12.50 an hour.
Wal-Mart had been planning to build six stores in the nation's capital. But a Wal-Mart representative wrote in an op-ed published online by The Washington Post Tuesday that the retailer will abandon plans for three of those stores if the bill gains final approval from the D.C. Council Wednesday. Wal-Mart says the bill will also jeopardize three stores already under construction.
Mayor Vincent Gray says in a statement that "the cancellation of three planned stores will surely set us back." He's asking the council to consider whether the bill would promote economic development.
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Wal-Mart: The D.C. Council has forced our hand
By Alex Barron, Tuesday, July 9, 2013
Alex Barron is a regional general manager for Wal-Mart U.S. responsible for about 90 stores and 30,000 associates in the region, including all planned stores for Washington, D.C.
For almost three years, Wal-Mart has worked on a plan to bring new stores to Washington, D.C., and we are now close to opening our first location here. Unfortunately, the city may soon adopt legislation that discriminates against business and threatens to undo all that we have accomplished together.
In November 2010, Wal-Mart announced a plan to bring more jobs, shopping options and fresh food choices to Washington, D.C. residents. Just 12 months later, we increased our investment – from four stores to six and from 1,200 jobs to 1,800 – in an effort to expand access and opportunity to more underserved communities in the city.
During this time, we also engaged in an open dialogue with residents, stakeholders, critics and elected officials. Our goal was to listen, share information about our company, answer questions about our plans and address any concerns.
The community told us that they wanted good jobs and more affordable grocery options in their neighborhood. We also heard about issues like local hiring, competitive wages, an inclusive construction process, local products and support for community non-profits.
Through these conversations, it became clear that most residents thought Wal-Mart could be part of the solution in D.C., a sentiment supported by our polling that showed 73 percent of residents “in favor” of Wal-Mart.
We thought it was important to document what we heard – a Community Partnership Initiative – and share it with the city. At the time, Mayor Vincent C. Gray said, “this agreement represents an unprecedented, citywide commitment from a retailer…Wal-Mart is showing what it means to be a good corporate neighbor, and I encourage other firms interested in doing business in the District of Columbia to show a similar level of commitment to our residents.”
The document was particularly unique because it was voluntary – Wal-Mart was not accepting any tax incentives even though some of our projects qualified for government assistance. Still, our agreement spelled out our plans to stock local products, allow space for local retailers, provide good jobs, ensure an inclusive construction process, fund transportation measures, create a city-wide job training program, and support non-profits to help fulfill unmet needs throughout the city.
Today, three of our six planned stores are under construction with the first two expected to open this fall.
But despite the consensus among D.C. stakeholders about the economic value our stores would bring, some Council members are now advancing an 11th hour effort to undermine our efforts and change the way businesses like Wal-Mart must operate in the city. New legislation - the Large Retailer Accountability Act (LRAA) - requires that a few large employers pay a start rate more than $5 per hour higher than the minimum wage.
From day one, we have said this legislation is arbitrary, discriminatory, and discourages investment in D.C. We have gone to great lengths to have thoughtful conversations with Council members about why LRAA will result in fewer jobs, higher prices and a smaller number of total retail options. It means most shopping dollars will stay in the suburbs, unemployment will remain in the double-digits in some neighborhoods and underserved communities will continue to have disproportionate access to affordable groceries.
For months, we have chosen to use hard facts, statistical evidence and common-sense – instead of idle threats - to educate the D.C. Council about the negative consequences of LRAA.
Our stance has been echoed by The Washington Post editorial board, residents, small business owners and groups like the Retail Industry Leaders Association, the National Retail Federation, the DC Building Industry Association, the International Council of Shopping Centers, the DC Chamber of Commerce, the Greater Washington Board of Trade and the Restaurant Association of Metropolitan Washington.
Unfortunately, this diverse chorus of opposition to LRAA has thus far fallen on deaf ears at the Council and the final reading is scheduled for July 10.
Like any business, we have a responsibility to our customers, employees and shareholders to re-evaluate our options when it looks like local rules may significantly change. The LRAA would clearly inject unforeseen costs into the equation that will create an uneven playing field and challenge the fiscal health of our planned D.C. stores.
As a result, Wal-Mart will not pursue stores at Skyland, Capitol Gateway, and New York Avenue, if the LRAA is passed. What’s more, passage will also jeopardize the three stores already under construction as we will thoroughly review the financial and legal implications of the bill on those projects.
This was a difficult decision and one we arrived at after considerable contemplation.
There is no question that Wal-Mart has surpassed the community relations efforts of other retailers seeking to come to Washington, D.C. In response, some members of the Council are fast-tracking a game-changing piece of legislation that challenges our ability to deliver.
While we will continue to engage with the Council leading up to July 10, we also urge Mayor Gray to veto this discriminatory legislation as it runs counter to every economic development platform his administration has identified as a priority for Washington, D.C.
WTTG FOX 5 & myfoxdc
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