Typical of shopping centers built decades ago, Alameda Square in Denver is a cheap, single-story strip of stores. It’s ugly and rundown. But that does not deter shoppers: Mostly Asian Americans, they come from miles around to patronize more than a dozen Asian-owned businesses, including two grocery stores, two restaurants, a hair salon, a clothing shop, a jeweler and a bakery.
On a weekday afternoon, the
parking lot buzzes with activity. Inside Pacific Ocean
International Supermarket, the dingy exterior gives way to bright
lights, shelves stocked with canned bamboo shoots and dried fish,
and aisles full of shoppers.
Most of Alameda
Square’s businesses are profitable. Together they generate
about $125,000 a year in sales tax revenue. But if the city of
Denver has its way, these small businesses will be evicted to make
way for a Wal-Mart Supercenter. The city’s Urban Renewal
Authority has threatened condemnation if the property owners refuse
to sell, and has offered Wal-Mart $10 million in public subsidies.
That’s right: Tax dollars would go to one of the
country’s most profitable and powerful corporations.
Because they lease their spaces, the storekeepers will
receive little compensation. The city has offered to help them find
new locations, but it is unlikely they will end up together, which
has been key to their success as a regional destination for Asian
shoppers. Some, like Kings Land Chinese restaurant, which books
weddings months in advance, are already losing business.
As big chains like Wal-Mart have grown and multiplied over the last
decade, tens of thousands of independent businesses have closed.
Most people assume that local retailers are being beaten
fair-and-square by companies that offer consumers a better deal.
But as Alameda Square vividly illustrates, consumer
choices are not all that’s driving the growth of corporate
chains. Public policy plays a major role.
the pack in attracting subsidies, last year collecting $10 million
in Denver; $500,000 in Dallas; $36.7 million in Scottsdale, Ariz.
(as part of a shopping center that includes a Lowe’s Home
Improvement Warehouse); $9 million in Bartlesville, Okla.; and $17
million in Lewiston, Maine.
Local officials argue these
big stores warrant subsidies because of the jobs and tax revenue
they generate. But in most cases the big boxes do more harm than
Chris Nevitt, director of the Front Range Economic
Strategy Center, one of several groups in Colorado fighting
Denver’s plan for Alameda Square, points out that nearby
grocery stores and competing businesses will lose sales to
"As these businesses shrink or close, hundreds
of jobs will be lost, many of which provide higher wages and better
benefits than Wal-Mart," he argues. Moreover, under the terms of
the subsidy, Denver will not see a dime of new revenue until 2016.
Rarely are tax dollars given to local retailers. For
them, it’s sink or swim in a sea of giant, subsidized
competitors. When asked how Scottsdale’s small businesses
were to survive the arrival of Wal-Mart and Lowe’s —
slated to receive the second largest corporate subsidy in Arizona
history — city councilor Ned O’Hearn declared,
"That’s urban dynamics. This is private enterprise. This is
Yet taxpayers pick up the tab for corporate
chains by bridging the difference between what their workers earn
and what they need to survive. Half of Wal-Mart’s employees
qualify for food stamps. Many rely on other forms of public
assistance. Washington state reports that Wal-Mart workers are the
single largest group of users in its low-income health care
Some cities have gone so far as to condemn
property owned by small businesses in order to turn it over to
chain store developers. Late last year, Wheat Ridge, Colo.,
designated property owned by three independent businesses as
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 developer has also been given $500,000 in public
Tax policy, too, is riddled with loopholes
that benefit chain stores. As the Center on Budget and Policy
Priorities has documented, about half the states allow national
chains to avoid state income taxes by transferring profits earned
locally to tax-free states such as Delaware. Small businesses,
meanwhile, pay state income taxes on every penny of their earnings.
All of this adds up to a startlingly tilted playing
field, a rigged system that can hardly be characterized as free
enterprise. Our hometown businesses deserve better.