If Congress and the President provide local communities with no guidance as to what constitutes a "shovel-ready" economic stimulus project, they're going to end up with no shovel at all. Some communities are dreaming up projects that would never pass the Works Progress Administration test.
Republicans kicked dirt on the idea of using $200 million in "stimulus" money to re-sod the National Mall---but what would they say to officials in one small North Carolina town who want to use their federal economic stimulus money to buy a dead Wal-Mart?
That's right: a dead Wal-Mart.
Officials in the tiny town of Clyde, North Carolina, nestled in the Smoky Mountains, are counting on a federal bail out to buy a store that Wal-Mart has abandoned.
Once an important loading point for shipping livestock, Clyde has evolved into a bedroom community. Only 1,300 people live in Clyde, yet the city has had its own Wal-Mart since 1990. But that store closed last fall, when the giant retailer was allowed to build a larger supercenter just eight miles away in Waynesville.
What was once a bustling retail market and taxpaying property in Clyde, is now slated to go off the tax rolls entirely. County officials are proposing to use the dead store as the new home of the Haywood County Department of Health and Social Services. One Haywood County Commissioner said that the current county offices, located in an old hospital, are no longer viable. "I don't think there's any question that the building is not adequate. It's in disrepair and it's very expensive to maintain. You're dealing with an almost 80-year-old building."
Relocating the county departments to the old Wal-Mart location would provide thousands more feet of space. Unfortunately, the county's proposal may be the only way for Clyde to find a tenant for the 116,000 square foot Wal-Mart shell.
The county is already plagued by a growing portfolio of empty stores. Goody's clothing store in Waynesville is going out of business. Home Depot has canceled plans for a new store in Waynesville, leaving an empty site in the mall where the Super Wal-Mart just relocated. "Right now, there's not a whole lot of retailers that are looking to expand," Haywood County's Economic Development Director admitted. "Everybody's pretty cautious right now. The county's interest (in the Wal-Mart property) is very encouraging." It was the County's manager who publicized the possibility that the latest federal stimulus package might contain funds to help finance the purchase of the dead Wal-Mart by the county.
Wal-Mart has left hundreds of 'dark stores' in its wake as it moved through small town America, causing local officials to worry about being stuck with massive, empty stores that cannot easily be recycled. In 1998, there were 1,921 Wal-Mart discount stores. Ten years later, there were only 971. Wal-Mart had expanded or abandoned nearly 1,000 huge buildings. An estimated 20,000 acres of asphalt and concrete were left for local officials to deal with.
For the town of Clyde, an empty Wal-Mart represents a major loss of tax revenue. If the county takes possession of the building, there will be no sales tax at all, and very few new jobs. The big winner will be Wal-Mart, which will sell off its dead store, and make more money at its superstore 8 miles away. Instead of pressuring the retailer to donate their 'old' store, Clyde wants to use federal taxpayer's money to bail out a company that made almost $13 billion in profits last year.
Buying up dead Wal-Marts is not a prudent use of stimulus package money. The U.S. Treasury has already stimulated Wal-Mart and other big box retailers. Last March, Treasury began sending out "economic stimulus payments" to more than 130 million Americans. Within weeks, Wal-Mart was telling a Lehman Bros retail conference that it would entice U.S. shoppers into their stores by offering to cash their stimulus checks for free. "If you want to cash the check at Wal-Mart and go spend it at a competitor, that's fine with us," one Wal-Mart spokesman noted.
Wal-Mart knew that customers would cash their checks at Wal-Mart, and then shop there. Two months later, Wal-Mart's CFO announced that $350 million worth of tax rebate checks had been cashed in their stores. The 2008 tax rebate was termed an "economic stimulus" at the time. It definitely stimulated a sales windfall for Wal-Mart--but it did little to rescue our faltering economy.
Communities like Clyde, North Carolina need to find something better to do with their taxpayer subsidy than buy an abandoned Wal-Mart. They must have a road, or a bridge, or school somewhere to shore up.
Before Congress and the White House hand over this 'shovel ready' money to cities and towns, they ought to check out what's in the shovel.
Al Norman is the founder of Sprawl-Busters. He has been helping communities fight big box stores for the past 15 years. His website is: http://www.sprawl-busters.com.