No Place for Walmart

Much attention has been paid to Walmart’s latest attempt to set up shop in New York City. In recent months, much of the coverage has mentioned a site called Gateway II in East New York, Brooklyn, that the company is supposedly eyeing.

What’s gone largely unreported is how Walmart came to identify that site in the first place and why community members and local leaders are convinced Walmart is working in collusion with real estate developer The Related Companies on a deal that could thwart what most people in the area actually want. What’s also been overlooked is the connection between the fight over Walmart on the ground in East New York and a larger fight throughout the city as Walmart continues “evaluating opportunities across all five boroughs,” to quote the cryptic yet ominous words of a top Walmart spokesman.

The growing fear is that Walmart and Related are partnering not just in East New York, but in numerous neighborhoods in order to open up as many stores as possible and pull off what would amount to a hostile takeover of local businesses and communities on an unprecedented scale. If this happens, opponents say, the threads of our tightly-knit urban fabric would unravel and too much would be lost. They worry about Walmart’s record of killing jobs, destroying mom and pop stores, pushing out good, unionized supermarkets, and mistreating employees. So they have launched a campaign to fight back.

The story begins in 2008, when Community Board 5 in East New York held several meetings to discuss plans for Gateway II, a massive site with plenty of room for affordable housing, mixed-use spaces, and retail businesses that would benefit the community and create thousands of new jobs for residents.

According to Charles Barron, the vociferous City Councilman who represents East New York, “The idea was to develop a community economy, so that we could have stores owned by the community.” He told Community Board 5 that businesses in the area could apply for retail leases in the Gateway II complex.

Wary of false promises developers had made in the past, residents participated in many discussions with Community Board 5 members, the Related Companies, and Barron to shape the redevelopment plan.

“All of this was done with the input of folks in the community, and it was wonderful,” said Bertha Lewis, veteran community organizer and head of the Black Institute who is very active in East New York.

Many local activists said that Walmart was never mentioned by the developer during the meetings as a potential tenant, and some folks hadn’t even considered that Walmart would attempt to lease space in Gateway II. Walmart’s earlier attempts to enter New York City were handily defeated, and as recently as 2007, H. Lee Scott Jr., the CEO of Walmart at the time, said: “I don’t care if we are ever here [in NYC]… I don’t think it’s worth the effort.”

By the end of 2008, Community Board 5 overwhelmingly backed the plan for Gateway II. In February 2009, an environmental impact statement was released showing that the site could allow a few anchor tenants occupying spaces larger than 100,000 square feet to coexist with smaller stores. That same month the City Planning Commission signed off on the plan and by April the City Council said yes too.

After the Council offered its approval, Barron thanked the Related Companies and others for “the work they did bringing it all together for the people of East New York.” This is just the beginning, he said.

Gateway II is one of largest as-of-right development sites in the city, meaning it only needs minimal land-use approval before building can begin, although land use experts and sources close to the project I contacted say there are still thorny details of land ownership that could prevent immediate building.

In the past, Walmart failed to secure as-of-right sites, so it faced additional bureaucracy in the approval process, giving anti-Walmart advocates more time and opportunity to mobilize elected officials and apply the kind of protracted pressure that eventually made the CEO say New York City wasn’t worth it.

But a leadership transition at the company changed the tune. Two years ago, Mike Duke, a top executive at Walmart, was appointed the new CEO. On his watch, a slicker image and brand for Walmart were quickly created and promoted. Within months of taking the reins, Duke unveiled a sustainability product index and a slew of other high-profile initiatives designed to make Walmart look greener, more responsible, more forward-thinking—more urban. Several stores in cities had already opened before he became CEO, but Duke began pushing a very aggressive urban growth strategy.

Gone were the negative statements about New York City. And Gateway II, a site that needed no further approval from the city, was still there—empty—and Related was looking for large anchor tenants.

Initially, Related denied that it was in talks with Walmart, Barron and others confirmed, but as the months wore on the developer wouldn’t offer any information on the retailers it wanted for Gateway II. And then the rumor mill went into overdrive and Related stopped addressing the Walmart issue altogether. People in the community used deductive reasoning and a process of elimination to figure out the rest.

By April 2010, the first news stories on Walmart’s apparent interest in East New York emerged. Soon a top Walmart spokesman named Steve Restivo began using a now familiar line about evaluating opportunities across the five boroughs and suggesting that New York City will welcome Walmart.

“This is when we really said ‘Yes, we have got to fight this,’” Lewis told me recently when we met.

Lewis is now playing a hands-on role in the Walmart Free NYC coalition, a citywide coalition of residents, small business owners, community groups, labor unions, clergy, and elected officials who are concerned about the negative impact of Walmart not just in East New York, but throughout New York City.

They think Walmart is preparing a Big Apple roll-out for the coming months. Walmart has saturated suburban and non-urban markets, and its U.S. sales have stalled in recent years. So it is now fixated on urban markets, especially the largest, not just to retool its image and brand but because it has no other choice financially if it wants to keep growing as a company—it has to “evaluate opportunities” here.

The coalition views Walmart as a game-changer: the company’s presence would irreversibly damage our city’s economy, neighborhoods, and communities, and thus leave residents worse off. In challenging Walmart, opponents argue they aren’t just “going negative”—they are generating fresh consensus and renewed urgency around a progressive agenda of expanding economic opportunities, preserving local businesses, raising workplace standards, and bringing the best employment and grocery options to the most underserved areas of the city.

“We are harnessing the anti-Walmart sentiment that already exists in this city and using it to build a movement in which New Yorkers fight for everything that Walmart would jeopardize and threaten,” said Stephanie Yazgi, campaign director for Walmart Free NYC and a veteran field organizer in Democratic Party politics. “People don’t want to lose their neighborhood businesses, they don’t want good local jobs to be killed, they don’t want the livelihoods of neighbors and friends to be harmed. There is palpable anxiety and anger about Walmart destroying communities that it tries to enter. There is no agreement or deal with the company that will ever offset all of the negative effects Walmart would have here,” she told me emphatically.

In late April, this intense opposition was voiced within earshot of Mike Duke. When he came to the Bryant Park Grill to make a speech on the company’s future to market analysts and the business press, a flash mob showed up and shouted: “Walmart cheats, Walmart hates, Walmart discriminates!” A few agitators took it a step further with a marching band and performed a song called “Hey, Mr. Walmart, Who Do You Think You Are?” inspired by “Mr. Big Stuff.” A YouTube clip was soon posted. It was widely circulated and went viral. The reporters wrote far more about the creative action than the speech.

After the music and chanting died down, coalition members explained that Walmart acts fundamentally as a predator, not a competitor. They pointed me toward a strong body of evidence and independent studies showing that Walmart is responsible for more net loss than gain, for more destruction than creation, for constraining consumer choice, not enhancing it. In the retail industry, Walmart has set the model for the worst jobs with the weakest standards and fewest protections. Nationally, retail earnings have declined throughout the sector simply because Walmart continues to exist. The company, one of the most profitable on the planet by far, can easily afford to provide superior wages and benefits, but it chooses not to.

And don’t forget the company’s other egregious treatment of workers. This year it was hit with the largest gender-bias class action lawsuit in our history. On June 20, the Supreme Court ruled in favor of the company, but that doesn’t change the fact that so many women felt compelled to join the suit in the first place. Women’s groups, City Council members, and the Walmart Free NYC coalition denounced the ruling immediately and gathered at City Hall the next day, arguing that Walmart must be held accountable and that the decision put issues like pay equity and gender discrimination back into the national spotlight.

“Walmart, you get the badge, the women’s badge of shame. That’s what you get and so I stand with these women today. I stand with these leaders to say you won this one but we’re coming after you,” Brooklyn Councilwoman Letitia James said at the rally. She was joined by Sonia Ossorio, president of the New York chapter of the National Organization for Women, along with other top feminist advocates from the city.

Many workers of color have not had good experiences at Walmart, either. At a City Council hearing in February, Ernestine Bassett, a Walmart cashier from Maryland, spoke about how she was continually denied breaks even though, as a diabetic, she needs to give herself regular insulin shots. In 2008, Walmart settled a $54 million lawsuit for denying workers similar breaks in Minnesota. The settlement covered about 100,000 workers. In 2009, Walmart settled another lawsuit, this time for $17.5 million, alleging racial discrimination against black truck drivers. Walmart was charged with discouraging and rejecting African Americans seeking truck driver jobs at distribution centers in 12 states.

Walmart has also failed its LGBTQ employees. The company is years behind most other companies on gay issues, an undeniable fact that top LGBTQ organizations like the National Gay and Lesbian Task Force, the Stonewall Democratic Club of New York City, and the Human Rights Campaign (HRC) have pointed out. According to HRC’s latest Corporate Equality Index, Walmart has yet to amend its non-discrimination policy to include gender identity, despite regular shareholder pressure. Moreover, the company does not offer health benefits to domestic partners unless legally compelled to do so; Mike Duke is on record opposing gay and lesbian adoption; many Walmart stores sell anti-gay children’s books; and a young gay Walmart worker in Nevada was outed and humiliated on the job last year. In response, on June 26 many LGBTQ New Yorkers and allies marched with the Walmart Free NYC coalition at the pride parade.

Now consider Walmart’s own PR campaign. They’ve invested millions in a slick effort complete with radio, TV, web ads, mailers to thousands of people throughout New York City, and several self-financed, rigged polls showing—are you ready?—that New Yorkers love Walmart. But they don’t have much of a coalition of everyday New Yorkers, nor do they have much of a visible grassroots operation in communities. The primary supporter of Walmart in New York City is Walmart itself.

In order to move beyond the PR, I sent Restivo a list of questions and pressed for real answers. But he kept referring me to Walmart’s website and wanted me to accept the content as gospel, without independent corroboration or third-party verification. Some statements invited disbelief, even laughter. “All employees are called associates” is how he addressed the purported lack of professional mobility in the company. Seriously.

There are a couple other Restivo remarks I should mention. I asked him about a report indicating that in cities such as Memphis, Houston, Atlanta, Cleveland, and St. Louis, where Walmart has opened stores, the company had not addressed the problem of food deserts. Once again he pointed me to the Walmart website to emphasize “how New Yorkers will have convenient, affordable grocery options right in their own backyard.” But he didn’t refute the charge about the persistence of food deserts in the other cities.

Restivo also said that “the conversation regarding Walmart in New York City has been dominated by our critics and based mostly on urban legend.” Well, if the evidence critics offered is any indication, there is good reason for such dominance. And when I inquired about the number of public forums Walmart has held here this year, Restivo punted. He simply said he and his colleagues answer questions “every day.”

Most observers agree that Walmart is not making its case very convincingly to people. Company reps skipped two City Council hearings on Walmart this winter and instead hid behind polls, ads, mailers, and websites. And Related is following suit, ignoring multiple invitations this year to come talk to Community Board 5.

After an especially packed and sweaty Community Board 5 meeting on Walmart in May, I spoke with several residents. I did not hear many favorable comments about Walmart. Quite the contrary, in fact.

“I really don’t think we need a Walmart in the area. I don’t see the purpose, and I really don’t see how they’re going to do anything but take away the livelihoods from people in the community,” Nila Edwards, a 61-year-old grandmother who has lived on Shenk Avenue for 31 years, told me.

Many of those livelihoods are connected to the small businesses that line the avenues of East New York. “If Walmart opened in this area, we would go out of business,” Iqbals Chhabra, owner of Handsome Boutique on Pitkin Avenue, said. “The economy’s not great, the rent is pretty high and income is not that good, so we already have problems. If Walmart comes we won’t be able to survive,” he said.

Walmart in New York City is far from inevitable. As one market analyst put it, Walmart needs New York City more than New York City needs Walmart, thus echoing the views of other company watchers. The company has grown desperate, but its urban growth strategy in still largely untested and unproven. So opponents feel that they can escalate their campaign and make it much harder for Walmart to come in.

This summer the Walmart Free NYC coalition is organizing and mobilizing more communities in an effort to get people to take action on economic growth, neighborhood transformation, and job creation in ways that will benefit them. If it sounds like a winning strategy, that’s because it has worked before.