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Wal-Mart is pulling out of two, possibly three, D.C. sites where it planned to build stores, citing the D.C. Council’s impending adoption of a bill mandating large retailers pay a “living wage” to employees. The bill, which passed the on its first vote last month, will be put to a final tally Wednesday during the Council’s final meeting of the current legislative session.
Representatives from Wal-Mart say the company will no longer build its planned stores at Skyland Town Center and Capitol Gateway, retail sites in Ward 7. “They’re not bluffing me,” Councilmember Yvette Alexander (D-Ward 7) says, having just left a meeting with the world’s largest retailer. “We worked for many years to get this commitment. I really didn’t think it would get to this point.”
The Large Retailer Accountability Act requires companies that take in at least $1 billion in revenue annually to pay their employees at least $12.50 an hour, well above the District’s minimum wage of $8.25. The bill also only applies to stores that are at least 75,000 square feet, thus exempting companies like Apple and Starbucks.
In addition to the two Ward 7 stores, Alexander’s chief of staff, Ed Fisher, also says Wal-Mart’s move imperils a store planned for New York Avenue and Bladensburg Road NE. Councilmember Kenyan McDuffie (D-Ward 5), who represents that area, was one of eight “yes” votes on the bill’s first reading.
“That was without knowing Wal-Mart was going to pull out,” says Jeannette Mobley, McDuffie’s chief of staff. Mobley says her boss is “going to give this some thought” before tomorrow’s Council session.
Fisher says each planned Walmart was going to have at least 300 full- and part-time employees, as well as enhance food shopping options in Ward 7, where there are only four full-service supermarkets. “We’re going to have fewer options for groceries and commercial retail,” Fisher says. “At least 900 people won’t have an opportuntiy whether it’s full-time or part-time. Whether it’s a student in high school or a senior or a job someone can use as a stepping stone.”
Mayor Vince Gray wrote in a letter to the Council last month, ahead of the first vote, about his wariness toward the “living wage” bill. “I appreciate the Council’s efforts to ensure that salaries in the District are high enough to secure a resident’s future, but I believe this bill’s inherent drawbacks must be addressed prior to the Council giving its approval,” he wrote. However, Gray, himself a Ward 7 resident, has not indicated outright whether he intends to veto the bill when it reaches his desk.
“From day one, we have said this legislation is arbitrary, discriminatory, and discourages investment in D.C.,” Alex Barron, a general manager for Wal-Mart whose region includes D.C., writes in a company statement. “It means most shopping dollars will stay in the suburbs, unemployment will remain in the double-digits in some neighborhoods and underserved communities will continue to have disproportionate access to affordable groceries.”
Additionally, Barron writes that the Large Retailer Accountability Act imperils the three Walmarts currently under construction. A Wal-Mart spokesman says the decision could change if the outcome of tomorrow’s second vote is different from the first. But Alexander is not pleased with many of her colleagues.
“I’m not doing well right now,” she says. “For all the persons who voted for this I hope they work with me to get retail development to Ward 7. Maybe some people will change their minds, because it’s real now.”
Two councilmembers running in the 2014 mayoral election, Muriel Bowswer (D-Ward 4) and Tommy Wells (D-Ward 6), voted against the living wage bill on its first reading. Both represent parts of D.C. where Walmart stores are currently under construction. Jack Evans (D-Ward 2), who is also running for mayor, backed the measure.
UPDATE, 5:55 p.m.: In a statement, Mayor Vince Gray says he is quite disappointed with the latest turn in Wal-Mart’s development saga with the District. “Walmart’s announcement today is immensely discouraging,” he says. “We’ve worked diligently to expand entry-level job opportunities for District residents and end retail leakage to neighboring jurisdictions. The cancellation of three planned stores will surely set us back.”
When Wal-Mart first started developing locations in D.C., Gray demanded the retailer include Skyland Town Center—not far from his home in Ward 7—in its portfolio of planned stores.
“I strongly urge the Council to consider whether this legislation will actually promote strong economic development in the District and expand job opportunities for District residents,” Gray says in today’s statement.
But Gray’s comments today should not be construed as an overt veto threat, his spokesman says. “They have to pass a bill before we can veto one,” Pedro Ribeiro says. “We’ll see what the Council passes tomorrow and make a decision at that point.”
