Steven can plan

I recently wrote about how Wal-Mart plans to expand its reach in Chicago in a big way (30 new stores big). Politicians around the country consistently like to be heard saying how one way the store(s) will benefit the city is the additional tax revenue the city will see from property and sales tax contributions. Here are selected quotes from Chicagoans:

On Tuesday, [Chicago Mayor] Daley noted that a Wal-Mart expansion would pave the way for sales tax windfall for the cash-starved city budget.

In suburban Cook County, about 20 percent to 30 percent of all sales tax revenue comes from Wal-Marts, Daley said.

Chicago Sun-Times, June 15, 2010

“Everyone realizes we need the tax revenue,” [Alderman Anthony] Beale [9th Ward] said.

Chicago Sun-Times, May 5, 2010

Ald. Richard Mell, 33rd, a pro-union alderman, lamented Wal-Mart’s domination of the nation’s retail market and its tendency to sell foreign-made products, but voted for Pullman Park because of the need for jobs and additional tax revenue.

Chicago Tribune, June 30, 2010

Comparatively, Wal-Mart brings in little property tax revenue on a per acre basis, according to a study from Sarasota County (Florida) and Public Interest Projects and posted by Citiwire. I’ve summarized their findings:

• Single-family home: $8,200 per acre
• Wal-Mart and Sam’s Club: $150.00-$200.00 per acre
• Southgate Mall: $22,000 per acre
• High-rise mixed-use project in downtown Sarasota: $800,000

That last one’s the kicker! From the Citiwire article, “‘It takes a lot of WalMarts to equal the contribution of that one mixed-use building,’ [Peter] Katz noted.” Read the full story for more examples and for more discussion on how this specific breakdown of costs and benefits is only one way to look at fiscal and retail impact.

If the same tax revenues were true for Chicago or Cook County (and I can’t say it is or isn’t), then the city planners and aldermen should be seeking developers to build high-rise mixed-use projects. Right.

But the issue Chicago and other cities have is that Wal-Mart is one of the most willing developers – they will build where no one else will. They have capital that no one else has. They have the resources to sway the population. It’s more politically difficult to resist such a willing partner like Wal-Mart than it is to seek relationships with developers who have the resources to create more beneficial mixed-use projects in the neighborhoods Wal-Mart seems to prefer.

Every Chicagoan should know by now that Wal-Mart, who currently only has a single store in the city limits, plans to open about thirty new stores (the City Council approved the construction of a Supercenter in the Pullman community area on the far south side*). Wal-Mart announced they want to open “dozens of new stores” in the next five years in various sizes ranging from 8,000 square feet (think Walgreens) to 20,000 square feet (think Apple Store Michigan Avenue) to the typical 200,000 square feet Supercenter.

This is big news for Chicagoans, and residents of New York City (there are no Wal-Marts in NYC). Not only will they be able to buy Coca-Cola for 20 cents a can, they won’t be able to shop at existing stores – because many of them will close. For now, the Chicago Tribune is keeping tabs on the developing story.

People in Chicago protest a new Wal-Mart. Disclaimer: This photo is from 2005, before the first Chicago Wal-Mart opened in 2006. However, in 2010, prior to the City Council vote, there were rallies protesting and showing support for new Wal-Mart stores. Photo by Andrey Smagin.

While they report on the recorded impacts of incoming Wal-Mart stores on new markets, I hope they answer the questions surrounding the confusion over the alleged negotiations between Wal-Mart executives and Chicago labor unions (representing construction and service employees). The unions say they got Wal-Mart to agree to a minimum wage of $8.75 while Wal-Mart says it’s just a matter of internal policy to adjust wages for the market.

Wal-Mart has funded a possibly influential campaign to get Chicagoans to support their new proposed new stores. Part of the campaign included ads on buses and putting signs and t-shirts on youths in the street, saying “Jobs or else.” If you want a Wal-Mart in Chicago, the company urges you to contact your alderman. Photo by Ira of Being Totally Sweet in Chicago.

So what are those impacts?

Wal-Mart can afford to be bold, and its impact is readily seen. Median sales decrease 40 percent at similar high-volume stores when a Wal-Mart enters the market, 17 percent at supermarkets and about 6 percent at drugstores, according to a study published in June 2009 by researchers at multiple universities and led by the Tuck School of Business at Dartmouth College in Hanover, N.H.

Drugstores like Deerfield-based [Illinois] Walgreens are the least impacted, according to the study, and are generally able to stay afloat by increasing their assortment size.

Supermarkets, the study found, can survive by doing their best to differentiate themselves from Wal-Mart, rather than attempting to compete.

Ideas about marketing and additional discussion of impacts is written on page two of the article. This light investigation from the Tribune comes after a recently released study from the University of Illinois at Chicago (my alma mater). Here’s the synopsis from that study about the sole Chicago Wal-Mart in the Austin (west side) neighborhood:

The study found that stores near Wal-Mart were more likely to go out of business, eliminating the equivalent of about 300 full-time jobs — about as many as Wal-Mart initially added to the area.

Read the full press release on the UIC News site or download the study (PDF).

*UPDATE: Where is the Pullman community area? It’s northwest of Lake Calumet and home to the former Pullman Palace Car Company’s factory and company town (see detailed street map of the Pullman community area). There are four commuter rail stations on the Metra Electric line within walking distance of the new shopping center. The development, called Pullman Park, will be located at 111th Street and the Bishop Ford Expressway (I-94). It includes shopping, a school, and housing, among other uses. The CTA #111/111th Street bus will run near Pullman Park.

So let’s recap the week of high-speed rail announcements.

On Wednesday (1/27), President Obama in his State of the Union speech talks about how $8 billion in funding for high-speed intercity passenger rail (HSR) will be a major jobs creator.

Photo: Tri-Rail is a commuter rail service between Miami, Fort Lauderdale, and Palm Beach. In five years, a high-speed train will whisk travelers between Tampa and Orlando. The hope is that a second link between Orlando and Miami will come afterwards.

The next day, in Tampa, Florida, he announced the winners of the $8 billion dollars of funding. Actually, the White House Press Office “leaked” the press releases the night before.

So what did I do for “high-speed rail week”?

I wrote a few articles and created a couple summaries:

• Rep. Mica of Florida is confused about how best to support high-speed rail
• High-speed rail stimulus awards coverage and summary – This article summarizes the projects’ major construction elements.
• Thursday is a big day for high-speed rail in America
• Spreadsheet summarizing ALL construction elements and funding amounts: Google Docs or Excel file.
• New finds from late Thursday, early Friday:
  • Interactive map from the White House (Flash),
  • Federal Railroad Administration fact sheets (one sheet per corridor) with “quick stats” and miniature maps,
  • and a summary chart from the White House (PDF), breaking down the funding amounts for each corridor (beyond what I did in the spreadsheet above).

If you want to read some more opinions about this part of the American Reinvestment and Recovery Act (or stimulus), check out these articles I’ve selected:

• Florida’s High-Speed Rail Route Is Going to be Very Costly for Taxpayers – Robert Poole at the Reason Foundation (not to be confused with Randall O’Toole) says Florida needs $3 billion more to build its HSR line from Tampa to Orlando and, despite this gift, taxpayers will be stuck footing the bill.
• Georgia gets diddly-squat for high-speed rail funding – Thomas Wheatley at Creative Loafing. Thirty-one states got funding and Georgia didn’t. It didn’t help that the Georgia General Assembly sat on its collective rear by not planning for rail or even spending a federal earmark.
• While many people don’t want a Tampa-Orlando link now (partially because of the lack transit connections at each terminal), the St. Petersburg Times editorial describes the specific types of trips people would make. Last October, the Disney corporation said it supported the train and would donate 50 acres of land for a station. Lastly, Infrastructurist provides a closer look at why Florida was ahead of the pack.

UPDATE 2: The Transport Politic has the most detailed and comprehensive information on high-speed rail project/corridor funding, a better looking map than Ray LaHood’s map on LaHood’s blog. The White House Press Office posted separate press releases for each project here.

UPDATE: Chicago Business (Crain’s) says Illinois to get $1.2 billion for high-speed rail projects, including money to build the Englewood Flyover connection (Project P1, see map), a major CREATE component (read more: PDF). CREATE is a multi-agency program to reduce the bottlenecks caused by mixing passenger and freight trains and at-grade road crossings.

Tomorrow, President Barack Obama and Vice President Joe Biden will travel to Tampa, Florida, to announce the thirteen corridors winning a portion of $8 billion in funding for high-speed passenger rail projects.

Infrastructurist predicts four winners.

An Amtrak train heads south from Chicago Union Station. If Illinois receives stimulus funding for high-speed rail, we may see some faster locomotives and some new track emerging from the Chicago South Loop train yards.

Vice President Biden, President Obama, and Department of Transportation Secretary Ray LaHood (from Peoria, Illinois), announced the high-speed passenger rail plan for the United States in Washington, D.C., in April 2009. Photo by Scott Bernstein of the Center for Neighborhood Technology in Chicago, Illinois.

One of the winners Infrastructurist predicts is the State of Illinois on behalf of a project to upgrade the tracks and rolling stock for the Amtrak lines Lincoln Service and Texas Eagle that run from Chicago to St. Louis. This is by far the state’s most prosperous route. The Illinois DOT has increased the subsidy to this route, increasing the frequency of service. In response, ridership has grown year over year over year (although the gain from 2008 to 2009 was only 6 percent).

Will Americans soon travel with more convenience in the coming decade?

A collection of links and news stories I liked yesterday, Monday, June 4, 2010, the first business day of a new year and new decade. I hope you’ve started on this new year’s resolution.

• Riding The Rails: How $8 Billion in Stimulus Funding for High-Speed rail Could Change the Face of the midwest—or Get Derailed* (Mindful Metropolis – The article presents nothing new, but for novices on the topic, it combines all of the talks, plans, and dollar amounts that have been discussed over the past few years. New to me, though, is feedback from a meeting of train advocates and industry types at the Spertus Institute in October 2009. *Links to Flash version of entire magazine issue. Download accessible PDF, look for page 28.
• Columnist warns of forced porch-sitting, with possible mandatory neighbor interaction (Sprawled Out) – John Michlig takes Milwaukee Sentinel writer to task about shoddy journalism and defends real, walkable neighborhood designs. Also, a mention of a new neighborhood design called “coving.”
• ‘Fewer’ people use fast train (China.org.cn) – The world’s fastest high-speed rail opens in China (Wuhan to Guangzhou); two weeks later there’s subtle criticism of low ridership reports. China.org.cn is interesting; known as “China Internet Information Center” and “published under the auspices of the State Council Information Office and the China International Publishing Group in Beijing.” It’s hard to know what information comes from the government and what doesn’t.
• Fight Against Asian Carp Threatens Fragile Great Lakes Unity (New York Times) – The State of New York has joined the State of Michigan’s lawsuit against the State of Illinois to force Illinois to close the waterway connection between Lake Michigan and the Mississippi River. The states fear that Asian carp will soon invade the Great Lakes and destroy the ecology. The State of Illinois operates eight locks and dams along the Illinois Waterway and Illinois River. See map below (made with Google My Maps).

View Lake Michigan to the Mississippi in a larger map