- Wal-Mart Stores have enjoyed more than $1 billion in
economic development subsidies from state and local governments across
the United States, according to a new study released by a Washington, D.C.-based
research group.
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- Good Jobs First, a research group monitoring state and
local job subsidies, found 244 cases in which Wal-Mart retail stores or
the distribution centers that service them have received state or local
economic development subsidies. The subsidies amounted to just over $1
billion according to the report released Sunday.
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- The study, the first comprehensive national examination
of subsidies received by the giant retailer, found more than 240 cases
in which the construction of new Wal-Mart facilities was assisted by public
resources. In addition to 160 retail outlets, the study found subsidies
at 84 of Wal-Mart's distribution centers, representing more than 90 percent
of the network of huge warehouses the company has built to facilitate its
rapid expansion.
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- The subsidy deals for individual distribution centers
ranged as high as $46 million (with an average of $7.4 million), while
for retail outlets the largest was $12 million (with an average of $2.8
million). The study was funded in part by the United Food & Commercial
Workers International Union, but researchers said the union played no role
in the research or analysis.
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- Wal-Mart plans to open more than 300 new or expanded
stores in the United States in 2004, the largest number of which will be
supermarket-discount store hybrids called supercenters. One of those new
supercenter developments is located in Elizabethton.
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- The Wal-Mart Real Estate Trust paid $2.8 million last
year to purchase the 24.75-acre property on West Elk Avenue that included
the North American Rayon Corporation building. The property was appraised
at $2.3 million in 2002 according to the Carter County assessor of property's
office.
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- The study found two Wal-Mart developments in East Tennessee
had received government subsidies.
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- The company's Midway, Tenn., distribution center located
in Greene County received a total subsidy of $5.4 million. The Greene County
government provided $2.4 million for water and sewer improvements as well
as $750,000 for an access road funded by the state the GJF study found.
The county and state government also provided $250,000 in job training
funds. Greene County gave a 10-year tax abatement worth $2 million the
study reported.
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- In Shelbyville, a Wal-Mart distribution center which
opened in 2001 received a total subsidy $2.5 million. The state provided
a $750,000 grant for sewer work as well as a $500,000 Community Development
Block Grant for a water tank and water lines.
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- County Mayor Dale Fair and Elizabethton City Manager
Charles Stahl both said Wednesday they were unaware of any government subsidies
extended to developers for construction of the new Wal-Mart Supercenter's
construction on West Elk Avenue.
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- "They were not asking for any kind of special privileges,"
said Fair of the new Wal-Mart's development.
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- The individual subsidy deals listed in the GJF study
averaged $4 million. The GJF report reads that although that amount may
seem small compared to incentive packages provided to individual auto plants
and other large factories in recent years, the difference is in the quantity
of the deals. "Even a large manufacturer would be unlikely to open
more than one or two major facilities in a given year; Wal-Mart has on
occasion opened several dozen stores in a single day," the study contends.
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- Wal-Mart reported annual revenues of $258 billion for
2003. The company's net profit for the past year exceeded $9 billion.
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- "Wal-Mart presents itself as an entrepreneurial
success story, yet it has made extensive use of tax breaks, free land,
cash grants and other forms of public assistance," said Philip Mattera,
research director of Good Jobs First and principal author of the study.
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- Wal-Mart subsidy deals were found in 35 states, with
the largest number in California, Illinois, Missouri, Texas and Mississippi.
In total dollar terms, Louisiana, Florida and New York also ranked high.
Although comparative data are not available, the study found Wal-Mart likely
receives state and local subsidies from more jurisdictions than any other
corporation in the United States.
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- The types of subsidies reportedly given to Wal-Mart projects
included access roads and utility lines, tax increment financing, sales
tax rebates or exemptions, property tax abatements and tax-exempt bond
financing.
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- In addition to documenting subsidies actually awarded
to Wal-Mart projects, the study describes those situations in which local
citizen groups successfully opposed plans for public assistance to the
company. "The fact that Wal-Mart often proceeded with such projects
without subsidies suggests that the company did not seek the assistance
out of financial need," Mattera said.
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- While all of the distribution center subsidies went directly
to Wal-Mart, some of the public assistance for retail projects was given
through the developers of shopping centers in which Wal-Mart stores serve
as anchors the study reports.
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- "Given the poor quality of the jobs that tend to
be created and the role that big-box stores play in contributing to sprawl,
we suggest that states prohibit subsidies to retailers such as Wal-Mart
unless strict conditions are met," LeRoy said.
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