Friday, August 04, 2006

Mayor Daley, Alderman Austin: Which is it?

I've heard two arguments against the big box ordinance. The first is that we need jobs in minority communities. The second is that the law will be ineffective, because Wal-Mart will just ring the city with stores just across the city limits.

Which is it folks? Because if Wal-Mart is just going to build on the other side of the street, can't city residents simply walk across the street to work there?

Looking back again at what Alderman Carrie Austin said:

"I'm depressed. Calumet Park has land right across the street they can develop. Our development will just sit there for another century. I don't need more housing. I need sales tax revenue and jobs. How do I pull my community out of the slump that it's in? How do we get a rebirth? Sales tax revenue. That's how."
Alderman Austin's much stronger argument is about sales tax revenue, but if economists are right and Wal-Mart squeezes out other retailers by undercutting them on prices, that means Wal-Mart actually results in a net loss in sales tax revenue, not a gain. And as Austin should be well aware, sales tax revenues generated in her neighborhood don't stay in her neighborhood, that money goes back into Mayor Daley's piggy bank. And I think we all know how that piggybank is divided up.

Of course, if Austin really is that concerned about increasing tax revenue in the city, she could always say 'No' to Mayor Daley's plans to extend the LaSalle Street TIF district. My bet is that it's alot easier for Austin to say 'No' to tens of thousands of working poor than it is to say no to Mayor Daley.

15 comments:

JBP 2:33 PM  

"Wal-Mart squeezes out other retailers by undercutting them on prices" Darn that competition! Why would anyone want low prices?

Shouldn't we all pay more to buy our groceries at local liquor and rolling paper stores so that Joe Moore will be happy?

This isn't so much of an issue about taxes or jobs, it is simply about consumer choice. The overwhelming majority of people want to spend their own money wherever the feel like, regardless of politicians and state planners demanding they shop at politically favored stores.

I personnaly don't like shopping for hamburger at liquor/convenience stores, but that is about all there is to chose from on the West Side.

JBP

Bill Baar 2:51 PM  

...can't city residents simply walk across the street to work there?

They drive or take the bus.

Position yourself anywhere on Cermak Sat AM and watch the exodus to the North Riverside mall.

Shoppers and workers alike.

Yellow Dog Democrat 3:16 PM  

jb -- that "free market" argument would be just fine, if Wal-Mart didn't rely on suppliers from a Communist nation where wages are artificially supressed by the government in order to compete.

Again, Wal-Mart can't ave it both ways. You can't demand a free market in Chicago and make a killing off of a state-controlled economy in Beijing.

JBP 3:33 PM  

I have not noticed the local convenience/liquor stores having all that many items (outside of Budweiser and Miller) Made in The USA.

So China exports for a low price..big deal...we get the benefit as consumers.

Again, this issue is of consumer choice vs. the State dictating where we can shop.

Of course you can have it both ways, if you are a consumer in a free market you can shop wherever you like. In a state planned economy, you must shop where the politicians, in this case Joe Moore, tell you to shop, or defy Ald Moore and go to North Riverside plaza.

JBP

Anonymous,  3:55 PM  

Why do you people want to buy low price products from China via Wal-Mart? Not only is it an evil communist state that has numerous human rights violations, but China is also not doing its fair share to help us deal with terrorist regimes in Iran and North Korea. We should only support low price suppliers in freedom loving countries that support our foreign policy goals.

Anonymous,  4:10 PM  

Please let me know when President Bush gets around to signing a free trade pact with the President of the Republic of Cuba, or the President of the Islamic Republic of Iran. Let the bells of freedom ring.

Anonymous,  4:26 PM  

Maybe what Ald. Austin and Mayor Daley mean is that they want employers in the City, where they can put the arm on them for hiring and contributions. It may not help local pols to have employers just beyond their reach, even if residents can still get the jobs. And locating inside the city is no guarantee that jobs will go to City residents. Unless the store's licenses get held up until the quotas are met.

Anonymous,  4:29 PM  

The Alderman's comment about a "rebirth" of the neighborhood is her key comment. The term "jobs" gets bandied about because it has more attention-getting power. But every community needs the outward signs that tell investors it is a good place to be.

If a company is required to pay a minimum salary, job descriptions will be redefined to fit that pay level. The Big Boxes will require their new employees to have 5 years experience, for example.

That means they will pull employees out of smaller retail establishments - Walgreens, Payless, etc.,- leaving the non-skilled labor to apply for those spots.

Marathon Pundit 4:39 PM  

Funny, what happened to the Wal-Mart/Target is bluffing argument?

Anonymous,  4:53 PM  

John-
When Target shutters their Elson Avenue store, we'll know they weren't bluffing. At this point, everything else is just talk

Yellow Dog Democrat 6:16 PM  

A letter sent out by Alderman Shiller today indicates that the Wilson Yard project, with a new Target as its anchor, is still moving forward.

I'm betting the highly publicized announcement on the southside is nothing more than a press release designed to give Daley ammo for a veto. If Daley vetoes this measure, he'll regret it, and I think the Chicagoland Chamber of Commerce will as well.

Making The Wheels Turn 6:34 PM  

Actually, we won't know if Walmart/Target are bluffing or not - at least not for a while.

Most of these newer "Big Boxes" are either put out on the secondary market (so the companies don't have as much money tied up in brick and mortar), with the payback being all lease related.

Probably be a case where the companies will have to substitute (probably with a small sweetner) a comparable property outside of Chicago before they can take any action on those City of Chicago properties.

But if they decide to take that type of action (because those type of tradein/tradeout negotiations tend to be a serious pain), closing the affected facilities tends to take on a life of it's own, and once that particular train pulls out, those units are probably going to be shut down, regardless of what happens.

Let's think about this for a minute - Let's say that there's 4-6 years left on the store syndication package - why do anything - If the store is a 120k sq ft unit, why not shutter about 35k sq ft and reduce the usable store (selling) space down to only about 85k sq ft. Might give up some revenue per sq ft, but if you do it right, you cut back on the marginal profit areas of the store.

Think about it - get rid of the pharmacy, so it's Over The Counter items only. Actually, there's a big cost savings, and since a fair portion of the clients might be Medicaid anyway, and with state reimbursements being what they are, and being so backed up, actually could save them money in overall profitability.

Also, no need for all the garden center - most of those vacant lots in the area aren't being used for gardening, anyway.

If the stores are limited down to only 85k sq ft of active sales area, doesn't that mean they are out from under the "Big Box" restrictions?

Anonymous,  6:34 PM  

If Mayor Daley really loves Walmart lets put one in Millenium Park. Get rid of the bean, it does not have a cash register. Remove Buckingham Fountian, it costs money, put a Target in it's place. Please provide your examples.

Bill Baar 9:41 PM  

Please let me know when President Bush gets around to signing a free trade pact with the President of the Republic of Cuba...

It may happen real soon.

Anonymous,  7:15 AM  

Wheels has a good point. Except do the BB's own their pharmacies or are they a franchise? Ditto the garden section. Surely they don't own the Dominos or Starbucks at the front of the stores. Or the eyeglass department.

The city council doesn't understand how commercial businesses work and they certainly don't understand that there are a lot of smart people in each company who can figure out how to win whatever battle the Alderman want to start.

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