Cuyhoga County, OH

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 Walmart in the neighboring city of Cleveland Heights, by building a bigger one less than one mile away in South Euclid. 

Although Walmart 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 Walmart 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 Walmart 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 Walmart 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 Walmart 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 Walmart poaching began—it is likely that the enormous, 180,000 square foot Walmart would never have happened—and Cleveland Heights would not be facing a loss of jobs and tax revenues from the ailing Severance Town Center. 

WHAT YOU CAN DO
The South Euclid City Council—which happily poached a Walmart 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 Walmart would be sharply curtailed. 

The redundant South Euclid Walmart 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.

South Euclid, OH

On May 15, 2011, Sprawl-Busters reported from South Euclid, Ohio, that residents were actively organizing to fight off a proposed Walmart superstore. A development company called First Interstate Properties had purchased part of the Oakwood Country Club property in South Euclid, Ohio, with the intent of using part of the land for big box retail. 

Owner Mitchell Schneider had purchased 62 acres in South Euclid, and was closing in on another 92 acres in Cleveland Heights. Schneider described his plans as 63 acres for retail, 22 acres for residential, and the rest open space. Schneider indicated at the time that like his other malls, he’d like to attract stores like Target, Home Depot or Walmart. 

There are currently 6 Walmart stores within 15 miles of South Euclid/Cleveland Heights area, including one Walmart right in Cleveland Heights on Mayfield Road, and a superstore 8 miles away in Bedford. The entire shopping center footprint under consideration would be around 325,000 s.f., or around the size of 5.5 football fields—plus the parking area. 

The land First Interstate chose was zoned residential, not commercial—so opponents began to organize around that vulnerable issue. A group called Citizens for Oakwood, which is part of a larger non-profit group called the Severance Neighborhood Organization (SNO), began organizing for a bitter fight. “The future of the neighborhood is in your hands” the group said in a postcard mailing, which showed a photo of the Country Club with a bulldozer threatening it. “Is This What You Want?” 

This battle was a déjà vu for Cleveland Heights residents, who in 1994, beat back a similar big box proposal submitted by Developer’s Diversified Realtors. This time, opponents of the Schneider plan said that if the Oakwood project were built, the existing Walmart discount store in Cleveland Heights just one mile away would be closed.

South Euclid city government was so anxious to land this project that the city updated its Comprehensive Plan, admitting it was “precipitated by a request to rezone a 41-acre portion of the Oakwood Site from residential to commercial use.” Opponents decided that it the City Council voted to rezone the property, they would take the issue to South Euclid voters on the ballot. “Oakwood is not a done deal,” they said. “This is our community.” 

The local media scoffed at claims that Walmart was the likely anchor store for the project. The Sun News wrote in an editorial: “We strongly urge Schneider not to try and lure Walmart from [Cleveland Heights]—there are plenty of other national retailers that are underserved in this area to fill the shopping center.”But First Interstate would never confirm that it had a deal with Walmart, and the giant retailer, as usual, would not confirm its interest in the project either. 

On November 8, 2011, Question 96 on South Euclid Rezoning came before the voters. A total of 7,723 votes were cast, with 4,272 (55%) in favor of the rezoning, and 3,451 (45%) against the big box rezoning. The developer reportedly poured as much as half a million dollars into the referendum, which is roughly $117 per vote. After the election, South Euclid City Council President David Miller, who was re-elected, and who strongly supported the Oakwood Commons project, made this remark to big box opponents: “Thank you and goodbye. Crawl back under the rock you came from.”

Within three months of the election, word began to filter out that Walmart was, in fact, the mysterious 180,000 s.f. anchor tenant in the Oakwoods Commons project. An actual rendering of the Walmart footprint was posted by a real estate company on its website, and was reposted on the Heights Observer Blog in late February. The real estate company quickly pulled the brochure down—but it was too late, the Walmart was out of the bag.

The Cleveland Plain Dealer promptly ran a story that local residents were “dismayed” that a Walmart would sit on property that once was a golf course. "A Walmart Supercenter will destroy local business and cannibalize from our local grocers, who pay a living wage, unlike Walmart," one opponent said. "In an area like ours, with declining population and income, new retail only survives by taking from existing stores." 

A Walmart spokesman finally admitted to the Plain Dealer, "Our customers have told us that they want more convenient access to affordable groceries, and we think a new store at Oakwood Commons can be a part of the solution for local families. We hope to have more details to share soon." Mitchell Schneider, the owner of the property, refused however to nail it down as a Walmart. "What I can confirm to you is that we are in fact still in negotiation with Walmart (and others) and if and when we have a final, formal agreement, I will definitely provide you with an announcement." 

The ugly reality is that a new Walmart at Oakwood means the Walmart less than 1 mile away at Severance Town Center in Cleveland Heights will shut down. The economic development director for Cleveland Heights did not mince his words. He told the Plain Dealer that his office had been working hard to keep the Severance Walmart alive. "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.

For Walmart, such hop-scotch development is standard practice. Usually the company tells local communities that a larger store will create hundreds of new jobs—but in South Euclid, Walmart admitted that because it will be shutting down an existing store nearby, the net job change would only be 85 jobs. If any of the existing grocery stores near Oakwood Commons shut down, the net job impact could very well be negative. First Interstate Properties continues to boast that the South Euclid project will create 700 jobs.

WHAT YOU CAN DO
Ironically, in late January, the city of South Euclid became the 18th community in Cuyahoga County to approve an ‘anti-poaching' agreement. Under this agreement, individual communities agree not to actively pursue or encourage re-location of businesses now located in other Cuyahoga communities. The agreement also calls on cities and towns to notify one another if they learn of a company planning to relocate. 

This kind of anti-pilfering agreement—had it been in place before the Oakwood Commons project—would have made it much more difficult for the South Euclid City Council to steal Cleveland Heights’ Walmart store.

But the anti-poaching compact—which is a good land use tool—is too little, too late for Cleveland Heights, and for the residents of South Euclid who are located only minutes away from an existing Walmart store at the Severance Town Center. Many homeowners will suffer a loss in property value, and suffer through traffic congestion, just to line the pockets of a large developer who ignores zoning maps, and a huge retailer which changes retail locations as casually as you or I change shoes. 

The South Euclid referendum demonstrates once again that any town’s future is for sale to the highest bidder. When votes can be purchased with unbridled corporate spending, the whole concept of orderly zoning is out the window. Another example of the high cost of corporate free speech. 

Readers are urged to email South Euclid Mayor Georgine Welo at: mayor@seuclid.com with the following message: 

“Dear Mayor Welo, 

Your city bent over backwards to steal revenues from Cleveland Heights as part of the Oakwood Commons project—and now you agree to a County Plan that will not allow other towns to poach your Walmart like you did to them.

The sad fact is, your city demonstrated that it was incapable of thinking about regional impacts at all—but only what goes on inside your borders. South Euclid is not an island, and your support for building another big box store less than a mile from an existing store is proof that regional planning is dead in South Euclid.

On top of that, your City Council President, in the flush of his re-election, tells voters in the region, “Crawl back under the rock you came from!” To which city voters might have been justified in responding with: “Crawl back under the Walmart you came from!”

The Cleveland Heights store will close, and one of the last major pieces of open space in your community will be lost. North East Ohio is already saturated with Walmarts, including a superstore only 8 miles away in Bedford. In return, you have Walmart’s promise of 85 new jobs—not counting those lost at other existing grocery stores.

This First Interstate fiasco brings no added value economically to your city. Retail must follow growth, not lead it. Inviting Walmart to South Euclid is like inviting the cannibals to dinner, and it is your existing merchants who are the main course on the menu. Your Administration has made the basic mistake of believing that a new building going up means jobs—while the buildings and the merchants going down as a result don’t count. 

For your constituents, economic development has turned into economic dislocation. And your neighbors now know that you are willing to steal from them to pad your resume as Mayor.”