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An End to Wal-Mart Poaching?

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The term 'retail rustling' describes the efforts of one community to steal the merchants that are doing business in another community. It's a form of business poaching that has been going on for many years, but has gotten so cut-throat in some areas that local officials are attempting to get communities to agree to stop the rustling.

In November of 2011, voters in the city of South Euclid, Ohio approved a rezoning ballot question to allow them to poach an existing Wal-Mart in the neighboring city of Cleveland Heights, by building a bigger one less than one mile away in South Euclid.

Although Wal-Mart never acknowledged their involvement in the South Euclid project until three months after the vote, Question 96 on the ballot was the beginning of the end for the Wal-Mart anchor store in the Severance Town Center mall located in neighboring Cleveland Heights.

The economic development director for Cleveland Heights told the Cleveland Plain Dealer that his office had been working hard to keep Wal-Mart in his city. "It makes my stomach turn to think that after this whole rejuvenation of collaboration and communities working together, that we're going to have one big box store move five blocks away to another community," he said.

Emotions ran high during the Question 96 campaign. The developer won -- but 45% of South Euclid's voters said "NO" to rezoning. The City Council President David Miller -- a strong supporter of poaching Wal-Mart to South Euclid -- was quoted in the newspaper as telling Question 96 opponents: "Thank you and goodbye. Crawl back under the rock you came from."

But the issue of 'poaching' a store from a neighboring community did not crawl away. In February of 2012, the city of South Euclid, which stole a Wal-Mart from its neighbor, became the 18th community in Cuyahoga County, Ohio to approve an 'anti-poaching' agreement.

The purpose of the Cuyahoga County Anti-Poaching Protocol is "to express the commitment of the participating communities that they will not actively pursue or encourage the re-location of a business that has not indicated that it is considering a move from its current location in another participating community."

"As a matter of principle," the document says, "we agree that it is desirable, when possible, to retain businesses in the local jurisdiction in which they currently reside. If it is not possible to retain a business in its current local jurisdiction, our next goal is to retain the business in the county in which it currently resides." Signatories to the Agreement say that "if a business has not expressed an interest in re-locating... communities should not actively pursue or 'poach' that company to encourage it to move from its current location." The term "actively pursue" means "to initiate contact with the business directly, with the intent of luring the business, through cold calls, visits, mail solicitations, direct marketing, or other means."

As of February, 20 out of 59 communities in Cuyahoga County have signed on to these protocols. County Executive Ed FitzGerald calls the anti-poaching agreement "an important first step in uniting our county."

This kind of regional land use planning is rare in the "cowboy" world of real estate development. Landowners and developers have pretty much had their way at the local level for the past 50 years -- which explains why huge malls have been built next to residential tracts, in the middle of wetlands, and on the edge of highways far from the downtown commercial core of most communities.

California tried to address this issue of big box poaching more than a decade ago. In October of 1999, Sprawl-Busters reported that California Governor Gray Davis had signed legislation which prohibited cities and towns from providing financial incentives to lure big box stores and auto dealers from neighboring communities.

The California law requires the poaching city to share the sales tax revenue with the other city at a rate of 50%, if the relocation would result in a loss to the city where the business is currently located. The law was written to prevent "expensive bidding wars" over big box stores between local governments that were taking place in California, and to prevent a business from threatening to relocate to a nearby city if the current municipality fails to come up with an incentive package for it to stay.

If the Cuyahoga anti-retail rustling Agreement had been in effect between South Euclid and Cleveland Heights before the Wal-Mart poaching began -- it is likely that the enormous, 180,000 square foot Wal-Mart would never have happened -- and Cleveland Heights would not be facing a loss of jobs and tax revenues from the ailing Severance Town Center.

The South Euclid City Council -- which happily poached a Wal-Mart in November of 2011 -- three months later inked an agreement to prevent poaching of its own stores. The fact remains, Cuyahoga County is on the right path, and every city, town and village in America should develop similar Anti-Poaching Agreements with its neighbors. Not all big box projects can be stopped this way, but the hop-scotch sprawl perfected by corporations like Wal-Mart would be sharply curtailed.

The redundant South Euclid Wal-Mart should crawl back under the rock it came from. We need to take back control over our hometowns from the 1% corporations who now have the upper hand.

Al Norman is the founder of Sprawl-Busters. His new book will be published this spring. He has been helping communities fight big box stores for the past 19 years.