Owners of a small business in Birmingham, Alabama, near the site of a proposed Wal-Mart supercenter, have filed suit against the city for giving the retailing giant a $10 million subsidy. Southeast Meats of Pelham, in operation for over two decades, contends the handout gives Wal-Mart an unfair advantage. The suit also asserts that the city improperly threatened to use eminent domain to force owners of the Wal-Mart property to sell.
Meanwhile, 25 miles south in Alabaster, Alabama, a group of residents have sued to block the city from condemning their property for a massive shopping center anchored by a Wal-Mart supercenter. Developers acquired all but twelve acres of the 400-acre site. When the remaining residents refused to sell, the city declared their homes “blighted” and moved to take the property. Alabaster has also pledged $2 million in roads and sewers for the project.
Cities are increasingly using their power to condemn property to facilitate chain store development. Subsidies and tax breaks are rampant as well.
In October, Wheat Ridge, Colorado, declared property owned by three independent businesses “blighted.” The three enterprises—a multi-generation, family-owned automotive repair shop, a billiards hall, and a kitchen cabinet business—will be booted for a Walgreens drugstore. The city has also given the developer $500,000 in public subsidies.
Meanwhile, in Denver, more than a dozen Asian-owned small businesses are slated to evicted from a shopping center that Wal-Mart is seeking to redevelop into a supercenter. The city’s Urban Renewal Authority has offered Wal-Mart $10 million in tax breaks. (Readers may recall that this plan first surfaced more than a year ago, but, as we reported, the small businesses successfully fought back. Now, under a new mayor, the project has resurfaced and is moving forward.)
Local officials argue these big stores warrant subsidies because of the jobs and tax revenue they generate. But studies have found that big box retailers eliminate about as many jobs as much tax revenue as they create by forcing local stores to close.