Pagosa Springs, CO

The small town of Pagosa Springs, Colorado has a big problem. Just before Christmas, the media began reporting that a 93,000 square foot big box store was coming to town. The store turned out to be Walmart, and that announcement provoked a citizens group to spring up, called Pagosa First. By January 3, 2012, the Walmart project was out in the open, as the retailer made a presentation to the Pagosa Town Council. 

The Town of Pagosa Springs describes itself as "a scenic community known for healing waters" because of its natural hot springs. The battle against Walmart is getting as hot as those healing waters. Pagosa is located half an hour west of the Continental Divide—and a major divide has now formed over this sprawling big box project.

Pagosa Springs is surrounded by the San Juan National Forest and Southern Ute Indian lands. The town relies heavily on its eco-tourism attractions, including the San Juan River that flows through the center of town. "With an average of 300 days of sunshine and four definitive seasons," the town's website says, "Pagosa Springs is an extraordinary place to live!"

Walmart apparently also sees Pagosa as an extraordinary place to build a store. The Pagosa Sun newspaper reported on December 21st that the Town Manager had been in discussions with an unnamed big box store regarding an abatement of development fees for projects larger than 25,000 square feet—an invitation to sprawl if there ever was one. 

Last year, at the urging of the Town Manager, voters repealed zoning restrictions that placed added requirements on proposed developments exceeding 40,000 square feet—including a requirement for economic impact studies. The Town Manager argued that Pagosa was losing millions in sales tax because Pagosa residents were buying merchandise at stores outside of the town.

But the actual impact study cited by the Manager showed that a big box retailer would "severely damage" local retailers, according to The Sun, and "negatively alter the socio-economic fabric of the community." 

The newspaper reported that Walmart officials had flow into town to scout sites in Pagosa since the summer of 2011. In January, residents in Pagosa contacted Sprawl-Busters, reporting that "we are just beginning to fight the good fight. Walmart just purchased the property. We had the first meeting of our stop Walmart group which we are calling 'Pagosa First' last night."

At the end of December, the Pagosa Sun interviewed the director of a Small Business Development Center at Fort Lewis College. “It’s a tough situation for small towns,” the development official warned. “The size of the facility is a consideration. In small communities that have a large tourism base, businesses survive better than small communities with a largely agricultural base. Independent retailers will be affected, no doubt. You can be sure that you’ll take a pretty good hit to the diversity of retail in your town.” Walmart asserts that its new store will create 175 to 200 new jobs—but that is a gross figure, which fails to net out the retail jobs that will be lost elsewhere in the Pagosa trade area. 

WHAT YOU CAN DO
Walmart is slated to hold an "open house" on their proposal on February 16th. Such events are often a dog-and-pony presentation, with the developer's engineer, architect, and other consultants informally answering questions at different "stations" in the room—an opportunity for Walmart to identify supportive area residents to add to their email list. 

At such corporate events, citizens groups have in the past flooded the meeting with opponents, who wear bright nametage identifying their opposition to the plan, and giving Walmart officials a long list of questions to formally address, turning the event into an opportunity for opponents to show their concerns about the plan. Opponents also release a statement summarizing their objections to the project. 

One Town Council member told the public on January 3rd: “We will not entertain public comment. We will instead utilize a diplomatic option establishing civil organization and protocol in a public forum setting at the community center." The town is clearly trying to manage the public's involvement by agreeing to Walmart open house format. Walmart said: "We do and will commit to public discussions. We do see this just simply as the beginning of a long dialog with the Town of Pagosa Springs and the public at large, public discussions.”

Readers are urged to email Pagosa Springs Mayor Ross Aragon at: archie2@centurytel.net with the following message: 

Dear Mayor Aragon, 

Inviting Walmart into Pagosa Springs is like inviting a cannibal to dinner. Most of Walmart's sales will come from existing merchants. The scale and location of this project is inappropriate for a small town which leans heavily on eco-tourism to attract dollars to town.

Walmart's jobs claims are a gross figure—but you need to know the net impact of this project once you minus out the existing retail jobs at area merchants which will be lost. 

This project is not an example of economic development, but rather economic displacement. A store the size of two footballs is also excessive, and the company should be urged to shrink its plans dramatically to fit the scale of other merchants in town. 

Finally, no financial incentives—or fee breaks—need to be given to this wealthy corporation. This is a form of public welfare, and represents another perk given to large corporations at the expense of smaller merchants who are already at a significant competitive disadvantage to the retail giants. 

All you will get out of this project is a shift of market share from existing merchants to Walmart. As Mayor, you should be leading the effort to reject the size and location of this inappropriate land use. 

Oxford, MA

A change in Walmart’s corporate tax status in Massachusetts has triggered a volley of angry reactions from local officials across the state. The town reaction was brought to light recently in several media stories in Pittsfield, Oxford, and other municipalities. 

Walmart currently has 49 stores in Massachusetts, including 12 superstores, 35 discount stores, and two Sam’s clubs. Some of these stores had been classified as “Limited Partnerships.” The entity of record in a number of cities and towns was “Walmart Stores East, LP.” 

But in 2009, a new state law went into effect which included two provisions to close corporate loopholes. One provision, called “combined reporting,” is an accounting system that treats a company with many subsidiaries across many states as just one company, and taxes that company based on the percentage of its business that is in the state, as measured by where its property, payroll and sales are made. 

As Sprawl-Busters explained in a story on April 24, 2008, Walmart hired three lobbying firms to fight combined reporting. The retailer paid $208,678 in 2007 to protect its lucrative tax loophole---five times what the company had spent the previous year on lobbying. In states which have only “separate reporting,” Walmart pays rent to itself through a maze of corporate subsidiaries created in November of 1996, including Real Estate Investment Trusts (REITs). The rent appears as an expense on state tax forms, and is deducted from its taxable revenues. Walmart pays 2.5% of its gross sales monthly as rent to its own REIT, which then wires the money quarterly to a Walmart Property Company in the form of a dividend, which is then paid to Walmart Stores as a tax-exempt “dividends received.” 

All of these transactions are handled through a “cash management agreement” between the parties. Neither the REIT nor the Property Company ever had any employees. The REITs don’t pay taxes, as long as they pay 90% of their income out in dividends to shareholders. In Walmart’s case, the REITs are owned by Walmart subsidiaries, which are registered in Delaware, a state that has no corporate income tax. Walmart gets the benefit of the rent expense, but also gets the benefit of the non-taxed dividend, on the same monies. The dividends escape taxation, and the original rent that created the dividends is deducted from taxable income in the states where the “expense” is incurred.This complex game makes it almost impossible for tax regulators to follow the money.

The second provision of the 2008 Massachusetts law, called “check the box,” requires that businesses must declare themselves as the same classification at the state level as the claim at the federal level. Because Walmart is classified as a corporation at the federal level, it had to reclassify all its Massachusetts stores as corporations also, not as Partnerships. Sprawl-Buster estimated that in 2006, Walmart used these tax dodges to avoid $5.4 million in state taxes. A Walmart spokesman told the Boston Globe, “Anytime there’s a lawful way to reduce our expenses and save money for our customers, we’re aware of it.”

It is not clear how many of Walmart’s stores in Massachusetts were still listed as Limited Partnerships, but Pittsfield, Oxford, Leicester and Ware all have complained to the media that their local revenues had been raided. A Walmart spokesman told the Worcester Telegram-Gazette that the loss of local revenue was the state’s fault: “Walmart is based in Arkansas, is incorporated in Delaware and files taxes as a corporation in Massachusetts. That’s been the case for years. A recently enacted state law adopted federal income tax rules that classify how Walmart and other companies are taxed. As a result, the law treats Walmart as a Massachusetts company for tax purposes.” 

A spokesman for the Massachusetts Department of Revenue countered that as of January, 2009, Walmart had to declare its stores as either Limited Partnerships or Corporations. By choosing corporations, Walmart lowered its personal property taxes at many stores, because the state excise tax on corporate personal property is much lower than the local personal property tax levied by cities and towns. 

DOR told Sprawl-Busters that the municipal personal property tax rate ranges from $12 to $30 per $1,000 valuation, compared to the state excise tax on personal property at only $2.60 per $1,000 valuation in state excise taxes. In Oxford, Leicester and Ware, Walmart paid a total of $277,548 in personal property taxes last year. Most of that sum is no longer taxable.

When the city council in Pittsfield, Massachusetts learned recently that the city was losing $187,000 in personal property taxes due to Walmart’s corporate status change, one city councilor stated: "I think that big box stores, and the benefit for Pittsfield, is negligible," Krol said.

WHAT YOU CAN DO
Walmart claims on its website that it pays $35.5 million in state and local taxes in Massachusetts. There is no way to independently verify this figure, because the amount that Walmart pays to the state as a corporation is private information. There is no way to compare the impact of the combined reporting law on Walmart's total tax bill—but it is clear that the shift from Partnership stores to Corporations will cost local communities hundreds of thousands of dollars in losr tax revenues. 

This frustration drove local officials in the tiny town of Oxford, Massachusetts to vote unanimously this month to ask their state legislators to consider changing the tax code so that towns could benefit from personal property taxes. Such a change is not likely to happen, given the corporate lobby that would oppose it. 

For the forseeable future, Walmart stores in many Massachusetts communities have become much less attractive financially than some local officials had hoped.

Readers are urged to cut and paste this article and email it to your local and city and town officials.

Athens, GA

In early November, Sprawl-Busters received this call for help from a resident in Georgia:

“I live in Athens, Geoergia, where there are 2 Walmarts now. They are proposing building a third anchor store 1 block from downtown Athens, which would destroy all of the local businesses there. These little stores are what make Athens a great town. Our Mayor Nancy Denson is all for it; she was quoted recently as saying, "Some might call Walmart's foreign suppliers sweatshops—but they’re putting food on the table for Third World workers."

By early December, residents were actively organizing to keep this proposed Walmart from happening. A second resident sent Sprawl-Busters this message:

“An Atlanta-based development company by the name of Selig Enterprises has a contract on a parcel of land in our downtown area is planning an $80 million project which will include 200,000 sq ft of "higher end" retail and restaurant space, office space, 220 "high end" apartments, 1100 underground parking spaces in 2 partially underground parking decks and a pedestrian plaza, all anchored by and including what else but a 100,000 sq ft Walmart! 

They are saying they have vested rights due to the fact that they have spent $250-500K. Our local government is saying that they have the appropriate zoning and couldn't stop it if they wanted to. I have reason to believe that our mayor Nancy Denson doesn't want to, and I've been told that she has even signed a confidentiality agreement months ago. She then squashed a proposal from our Economic Development Foundation to have a city owned River District on the same parcel of land as well as adjoining land in our downtown area leading up to the already suffering Oconee River. We also keep hearing over and over that this is a ‘done deal’ which of course we realize is what the people that are for this development want us to hear. I am horrified by a Walmart going into our downtown—especially since we can currently drive 3 miles in one direction and 5 miles in another to the 2 already existing Walmarts in our town. Our town is known world wide for the music that comes out of here and we have many tourists coming to our town each year because of its music scene.”

On January 9th, an independent student newspaper at the University of Georgia, Red & Black, carried a story indicating that People for a Better Athens had presented the city council with more than 17,000 signatures from Athens residents petitioning against a proposed downtown Walmart. Selig Enterprises is seeking to build the store on land owned by a closed building supply company.

Athens attorney Russell Edwards has been a point person for the opposition. Edwards has been urging local officials to consider the economic downside of constructing a third Walmart in this city. “We can see places that will be affected most, places like Faulkner’s hardware, that would be right up the street from Walmart, would immediately go out of business.”

At the Jan. 3 city council meeting, one resident noted: “Even if it wasn’t a Walmart, the layout of the design is pretty ridiculous, the way they have it positioned on the waterfront is a total waste of really beautiful land.” The tract of land in question stretches from the downtown area to the North Oconee River. Opponents have indicated that they want this valuable parcel put under “interim control,” a mechanism that allows the city council to put a moratorium on new development on a given area until the more appropriate zoning plan could be put into place.

But a spokesperson for the developer told city officials that there is no building size cap in Athens, only “stylization requirements” for developments. But opponents remain firm that a smaller development is what they will fight for.“What we want,” Attorney Edwards said, “is for the private retailer to scale down the size of their development,” he said. “The only way to ensure that would happen is to make a legal framework to ensure that the developer would scale down that development.” 

The Walmart planned for the new site is less than half the size of the 200,000 s.f. existing Walmart superstores in Athens. But the Selig proposal would also be a Walmart superstore, with a full-line grocery department. Selig tried to argue that their proposed retailer would not be a direct competitor to downtown merchants. But any grocery stores or general retailers will clearly lose market share if this store opens. The developer states that it does not have a firm tenant to lease the space—but admitted: “It will likely be a Walmart. But we don’t have a lease with them so I can’t confirm that yet.” 

The Selig Walmart is currently in limbo, because two county commissioners imposed a three month hold on demolition of the closed building supply store, due to a law that allows them to re-evaluate plans which will demolish historic buildings. Selig has tried to mollify the loss of this historic property by asserting that it will re-use some of the existing building materials—but the proposed Walmart would certainly not be one of them. Walmarts have been described by architects as a form of ‘low commitment landscape,’ a building that has a lifespan of not much more than two decades. 

Athens Mayor Nancy Denson is saying publicly that her hands are tied. She told Red & Black, “That’s what’s sad to me is that the people that are coming there are asking us to stop something that there’s not a legal mechanism by which to stop it.” But the Mayor notes that she wants the project to happen anyway: “And I wouldn’t like to stop it if we could. The private investors have a right to enjoy the value of their property when they get ready to sell it. I think it’s wrong to block them to reduce the value of their property by holding it up.” 

The Mayor views the project as a private land deal that does not involve local government at all. “I think it would be wrong, even if we could find a legal loophole to do it,” the Mayor told the newspaper. “To go in and change the rules on those people after the fact and basically you’d be taking value away from the property.” The Mayor says the property would be devalued if it were rezoned to disallow large buildings. “The zoning where that property is, there’s no size restriction on what they’re allowed to build. That property is not a historic district, which a lot of people I think are mistakenly assuming that it is.” 

For the time being, Selig hopes to have its proposal ready to present to the city over the next several months. Nothing has happened yet regarding the demolition of the existing building, but with the Mayor pushing hard for the project, its clear the developer does not have to worry about city government trying to throw up roadblocks. 

WHAT YOU CAN DO
Athens, Georgia, which was chartered in 1806, was named after the Greek city of learning, and likes to present itself as the cultural heart of Georgia. Clarke County has a population of roughly 117,000 people, of which nearly 34,000 a University of Georgia students. 

Athens-Clarke County has a unified government that is run by a Mayor and ten commissioners. In 2009, Athens was designated by the National Trust for Historic Preservation as one of a “Dozen Distinctive Destinations,” and in 2003, Rolling Stone magazine rated Athens as the #1 College Music Scene that Rocks.” In 1975, the city created by statute a Downtown Athens Development Authority for the purpose of the redevelopment of the downtown. So the protection of the downtown as a classic district, and a draw for tourism has been in place for more than three decades.

According to the zoning ordinance in Athens, the purpose of land use control is for “improving Athens-Clarke County's appearance; lessening congestion in the streets; furthering traffic safety… preventing the overcrowding of land; avoiding both undue concentration of population and urban sprawl.” 

It’s hard to fathom how a plan of this magnitude at this local serves to lessen traffic congestion and avoid urban sprawl. A big box store in a downtown district is, by definition, an incompatible oxymoron. The zoning code has design standards that require commercial buildings to face the street, have parking to the rear of the building, and other design issues meant to discourage large buildings with unbroken facades. 

Readers are urged to email Athens Mayor Nancy Denson at mayorsoffice@athensclarkecounty.com with the following message:

“Dear Mayor Denson,

One of the fundamental purposes of zoning in Athens is to avoid urban sprawl. A retail store that is the size of one and half football fields makes no sense in a classic downtown area. Inviting Walmart to the city is like inviting a cannibal to dinner. It will not result in new jobs or tax revenues, because most of what Walmart sells will come from the sales of existing merchants in town. 

You have already received petitions from over 10% of the population in Athens opposed to a big box store. You can use your existing zoning ordinance to mitigate the traffic impacts of this store by reducing its scale. You need to have an indendent traffic study conducted for the Selig proposal, and then seek to reduce scale to reduce the traffic-related adverse impact. 

So far, you have a taken a very hands off approach to urban sprawl in your community. If you want to promote the city’s attractions to tourists, I doubt you will put high on your list the fact that Athens would have three Walmart superstores within a few miles of each other.

Do not let Athens become saturated with urban sprawl while you look the other way. You have the power to ask Selig for a downtown plan that have no anchor larger than 30,000 s.f. If you don’t ask, you don’t get.”

Sandy Springs, GA

According to a headline in the January 5th issue of the Atlanta Journal Constitution, Walmart has gotten stuck in the sand in Sandy Springs, Georgia.

“Sandy Springs halts big-box store downtown,” the headline reads. Apparently all it took was the rumor of a Walmart coming to town to spur the city council in Sandy Springs to vote to slap on a moratorium on large commercial buildings.

The action followed reports that Walmart wanted to build a store on Roswell Road in Sandy Springes, in what the Journal Constitution called the “showpiece district” of the city, an area zoned for residential and small business development.

The moratorium will last for 90 days, or roughly until early April. It applies to any commercial building over the sixe of 30,000 s.f. This will give city officials time to make sure the city’s zoning code and its comprehensive plan are in synch. The Comp Plan excludes large scale retail development in the town center district, but the zoning code needs to be updated to reflect that planning goal. 

“The rumors helped expose an issue,” a spokeswoman for the city told the AJC. “Downtown development for the city is significant, and they want to get it right.” 

The City Council held a special meeting to pass the moratorium, and local homeowner’s associations packed the meeting. Residents spoke about their concerns about traffic congestion, and the impact such a large store would have on the character of the neighborhood. 

Walmart as usual denied that it had any plans for Sandy Springs. The way the company put it was that they had not contracts ‘in hand,” which allows them to conceal any activity that actually is going on. Walmart does not want its competitors to know where it is going in advance, and such a stealth approach also keeps local opponents off guard. City officials have received no proposal from Walmart yet, but the smoke often proceeds the fire. 

Local residents did not close the door entirely to the idea of a Walmart in Sandy Springs, but they were emphatic that the town center was not appropriate. “We felt the town center should be, ‘Live, work, walk,’” the head of a neighborhood council told the AJC. “Big box is not conducive to that.” A spokesman for another condo association told the newspaper that a Walmart in town center “would destroy most if not all of the character of the area.”

The City of Sandy Springs announced also on January 5th that it had issued a Request for Qualifications (RFQ) and a Request for Information (RFI) related to redevelopment in the City’s downtown area. “Development of the City’s downtown area is one of the most significant decisions the City will face for the next 20 years or more. This major planning effort will bring together the downtown property owners, the community, and the city leaders as we launch the redevelopment of our downtown,” said Sandy Springs Mayor Eva Galambos.

WHAT YOU CAN DO
The city of Sandy Springs, Georgia had a population of roughly 94,000 people as of 2010. There currently 7 Walmart superstores within 10 miles of Sandy Springs, so the population is saturated with access to cheap Chinese goods—including a superstore in Atlanta on Ashford Duwoody Road. There is absolutely no market need for another Walmart store.

Readers are urged to email Sandy Springs Mayor Eva Galambos at egalambos@sandyspringsga.gov with the following message: 

“Dear Mayor Galambos, As an economist and specialist in urban finance, you won’t find it strange to hear that inviting Walmart to Sandy Springs is like inviting a cannibal to dinner. Your city is surrounded by Walmarts within a short distance, and another store is only about gaining more market share—not about jobs or economic development. 

Your city is right to protect its town center. This is not a proper location for big store, and I hope you will use the moratorium period to close the door to big box stores. All your work on city revitalization and neighborhood beautification will be or naught if you let companies like Walmart control your economy."