By Tyrone Queen
The District City Council held it’s fourteenth legislative meeting on July 10th, where they voted on a number of legislative bills that have come before the council. The Large Retailer Accountability Act of 2013 was one of the hottest bills to be voted on, because it affects Wal-Mart stores, which are due to open six sites across the District. The bill would require retailers in excess of 75,000 square feet with parent companies grossing at least $1 billion per year to pay a living wage of $12.50 an hour, minus benefits—with an exemption for companies with collective bargaining agreements.
Councilmembers Marion Barry, Anita Bonds, Jack Evans, Jim Graham, David Grasso, Kenyan McDuffie, Phil Mendelson and Vincent Orange voted for the bill, winning the majority to pass it. Those who voting no are Yvette Alexander, Muriel Bowser, David Catania, Mary Cheh and Tommy Wells.
Wal-Mart has plans to build six stores across the District, which would bring only the fourth big-box retail giant to the city (Target, Costco and Home Depot are already here). Construction on three of the buildings has already begun. If the bill is signed into law by Mayor Gray, the Arkansas retailer would be forced to pay its workers $12.50 while smaller and unionized competitors do not.
Wal-Mart is an American multinational retail corporation that runs chains of large discount department stores and warehouse stores. The company is the world’s third largest public corporation, according to the Fortune Global 500 list in 2012, the biggest private employer in the world with over two million employees, and is the largest retailer in the world.
Wal-Mart’s spokesman Steven Restivo, said in a statement that Wal-Mart stands by its pledge not to open three of its stores if the bill becomes law. “Nothing has changed from our perspective: we will not pursue Skyland, Capitol Gateway, and New York Avenue and will start to review the financial and legal implications on the three stores already under construction,” he says. “This was a difficult decision for us—and unfortunate news for most D.C. residents—but the Council has forced our hand.” The head of the local AFL-CIO has blasted Wal-Mart, stating that the recent tactics of the retailer should be considered “economic blackmail.”
In the beginning, the District put up little resistance to the behemoth retailer moving its operation into the borders of D.C. Other major cities across the country such as New York and Chicago have fought not to have Wal-Mart in their cities. Once the city had agreed to the initial partnership initiative, D.C. officials were welcoming to the retailer with open arms. Many of the stores that were scheduled to be built in underserved neighborhoods, where city leaders promised hundreds of jobs and access to fresh groceries.
Anti-Wal-Mart activists who opposed the big box retailer from moving in and criticized the city for holding meetings with the giant retailer behind closed doors. One of their main arguments against the agreement was that it didn’t come with a community benefits agreement that demanded transit benefits, safety agreements and a $12.50 minimum wage at the store.
If Mayor Gray signs the bill into law, Wal-Mart has stated that it will pull out of their agreement, to bring six stores to the city, and the impact would be felt all over. The retail giant would have brought an estimated 1,800 new jobs to Washington and created 600 construction jobs that would continue to generate new tax revenue for the city. Some of these numbers have already been impacted do to the current construction already in progress.
Additionally, part of the deal with Wal-Mart was the requirement to work with the city government in efforts to assist in building increased capacity for DC Certified Business Enterprise (CBE) entities with regard to the construction projects. These opportunities would greatly affect job creation, where, in parts of the city the employment rate is twice the national average. Additionally, many CBE’s had begun to develop programming around job training, preparing residents in their wards for the coming jobs.
One executive director of a southeast-based non-profit spoke on the condition of anonymity. The director said, “Our organization has begun outlining the training program for people we thought would be great candidates for Wal-Mart jobs. If Wal-Mart decides to pull out, this will only continue to perpetuate the already negative stereotypes about development in southeast and the very real unemployment rates.”
Some parts of DC have an unemployment rate of 9.3 percent and in ward 8 alone the rate is 22.5 percent. Noted in the initial partnership initiative, over the next 5-7 years Wal-Mart had also pledged to not only create jobs, but to create charitable partnerships worth $21 million in critical areas of unmet needs such as hunger relief, health and wellness, education, and workforce development. They also agreed to work with local community groups and others such as the Community College of DC and the DC Department of Employment Services to recruit and select qualified candidates for positions in their stores. The selected DC residents would include those low-income families, minorities, veterans, at-risk youth and formerly incarcerated residents.
Skyland Town Center, at the southernmost part of Ward 7 is on a 18.5-acre site at the intersection of Good Hope Road, Naylor Road and Alabama Avenue. This is one of the venues where Wal-Mart was due to open. Mayor Gray lives around the corner from the development and many now wonder will he let development in his own ward fail. Prior to the vote on the mayor had pushed for legislators to reject the bill citing the strong impact of economic development in the District and expand job opportunities for District residents.
Wal-Mart had tentatively agreed to lease 125,000 square feet in the Skyland development, which the city has owned free and clear for eight years, after it seized the property by eminent domain. The project is slated to include retail space and about 476 residential units.
In 2002 the city selected McLean, VA-based The Rappaport Cos. and its team to develop the site. Although the team is going through the entitlement process, they are slated to begin groundbreaking in April 2014. The word from Gary Rappaport, CEO of McLean-based The Rappaport Cos., stated in a May 17 letter that the legislation will have a impact on D.C. economic development that goes beyond Skyland.
Now the ball is in Mayor Gray’s court. What will he decide about the bill? Will he veto it and allow Wal-Mart to come into the city without forcing them to raise their minimum wage or will he side with the councilmember’s who voted for the bill and halt District development. Wal-Mart has spoken. The council has spoken. Mr. Mayor we are all waiting to hear from you.