Sprawled Out: The Search for Community in the American Suburb

Fact-deficient Wal-Mart defenders make it easy

ABOVE: Wal-Mart promotes literacy at its Menomonie "Distrubution" Center

What motivates a private citizen - - with no ostensible ties to Wal-Mart - - to write a letter to the editor filled with mistakes and sloppy logic?

Big-box retailer has economic benefit

Letter writer Pamela Fendt made several incorrect assumptions about Wal-Mart ("Don't welcome store," May 13).

She incorrectly stated that Wal-Mart is using the state's publicly funded health insurance, BadgerCare. This program is not used by stores. It is set up for individuals. Being a Wal-Mart employee is not an eligibility requirement for BadgerCare, which is based on income and other factors. These folks would be getting BadgerCare whether or not they worked for Wal-Mart.

Being a Wal-Mart employee is not an eligibility requirement for BadgerCare. However, one goes with the other pretty snuggly; Wal-Mart employees use BadgerCare.

Quoting one of my earlier posts: In Arkansas - Wal-Mart headquarters - Wal-Mart is NUMBER ONE in Children of employees on publicly-funded State Health Care programs.

Quoting a story in the Arkansas Democrat-Gazette: "Georgia, Tennessee, Washington, Massachusetts, Wisconsin, West Virginia and Connecticut have also reported that Wal-Mart employees, or their children are a disproportionately large share of their state health rolls."

More: "A 2002 Georgia state survey showed that 10,261 of the 166,000 children covered by PeachCare for Kids (a Georgia state health program) had a parent working at Wal-Mart. That’s 14 times the number for the next highest employer, Publix grocery store, with 734."

Now, is that just because Wal-Mart employs SO MANY people that the numbers are skewed? I'm afraid not: Wal-Mart claims to have similar health care coverage as other large retailers. That's just silly. A recent Harvard Business School study (2002) shows that Wal-Mart spent an average of $3,500 a year on health care for each employee, compared with $4,800 for the average retailer and $5,600 for the average U.S. company. In Tennessee these numbers are even worse, with 3,700 of Wal-Mart’s 9,617 employees, or 26%, on state aid (according to the Chattanooga Times Free Press)!

When you are the biggest employer in the country, these practices CAN and DO cost the taxpayer money, putting ENORMOUS pressure on state health care systems. Just "good business"? It's irresponsible and simply shameful.

As an addendum: Wal-Mart has been shamed into marginally improving its health insurance offerings to employees, but the company is still far from a superhero.

Back to the letter:

While it's true that Wal-Mart has used public subsidies, Fendt ignored all the revenue it brings to the state through sales taxes. Without taxes, BadgerCare would not exist.

"While it is true that Wal-Mart has used public subsidies...". That's it? Talk about colorful understatement - - Wal-Mart is the patron saint of corporate socialism, and avails itself to our coffers on a gargantuan scale.  From "Wal-Mart's Tax On Us" at Alternet:

The subsidies Wal-Mart lobbies for run the whole gamut: free or reduced-price land, infrastructure assistance, tax increment financing (TIF), property tax abatements or discounts, state corporate income tax credits, sales tax rebates, enterprise zone tax breaks, job training funds, and low-interest tax-exempt loans. The most deals and dollars were found in Texas (30 deals worth $108 million) and Illinois (29 deals worth $102 million).

And because of poor disclosure in most states, this could be just the tip of the iceberg.

And taxes? Think again.

More from the letter:

The claim is made that for every job Wal-Mart creates, 1.4 retail jobs are eliminated in the local economy. Economists have questioned this claim. At the University of Missouri, economist Emek Basker found that a Wal-Mart's move into a community increases employment.

Oops - I don't think the letter-writer read Basker's entire paper (neither did I). Other economists did; let's look at a passage from the testimony of Heather Boushey, Economist at the Center for Economic and Policy Research:

Wal‐Mart does create jobs. But, as I mentioned above these jobs are generally not well‐paid, and, the total number of jobs created, after discounting the local jobs destroyed, is actually quite small. In a recent paper, Emek Basker finds that Wal‐ Mart’s entry into a community in the United States increases retail employment by 100 jobs in the first year, but 50 of those jobs disappear over the next five years. Wholesale employment declines by approximately 20 jobs due to Wal‐Mart’s vertical integration, but no spillover effect is detected in retail areas that Wal‐Mart does not compete in. 

Ms. Boushey, you see, read the whole paper - not just the "good parts."

We shouldn't forget the jobs created indirectly from Wal-Mart's distribution network. Many local businesses buy supplies from Sam's Club.

Er - wonderful, I guess. For reasons not explicated.

Successful economies are diverse. Big-box retailers like Wal-Mart contribute to that diversity.

Al Savastio

Milwaukee

Right-o, Mr. Savistio.

UPDATE:  The Menomonie "Distrubution" Center pictured above cost the city $750,000. They subsidized half of Wal-Mart’s land acquisition costs through the use of tax increment financing. (Source: Shopping for Subsidies: How Wal-Mart Uses Taxpayer Money to Finance Its Never-Ending Growth, by Philip Mattera and Anna Purinton)
 

More on the Wal-Mart blight:

The cost of doing business with Wal-Mart.

George F. Will - "Condescending lectures by liberals RE Wal-Mart"

What's wrong with having a Wal-Mart across the street?

FAST COMPANY: The Wal-Mart You Don't Know (the article that became the book THE WAL-MART EFFECT

Paul Soglin: "Your Wisconsin Tax Hell: Manufactured by WMC"

"Scamming the system" - More about corporate tax abuse

Property taxes: "Why am I paying so much?" PART 2

 

 

Is Menards having its cake and eating it too with subdivision development?

No one else has asked, so I will: In cases where Menards is developing locations adjacent to or in proximity of land that they have acquired through subsidy deals with local governments, or near roads improved or built as part of that subsidy, is someone holding Menards accountable in some way as they exploit that subsidy in this new venture?

For example, are local municipalities seeing to it that taxpayer-funded subsidies to Menards are at least partially repaid by ensuring that these new subdivisions serve their constituents that are in need of affordable housing?

A sidenote to the story in the Milwaukee Journal Sentinel answers that question:

THESE AREN'T STARTER HOMES
Of the three residential subdivisions being developed by Menard Inc., just one - Prairie Meadows, in Yorkville, Ill. - has homes that have been built. Houses currently available there have listed sale prices ranging from $349,900 to $396,900. They include such features as three-car garages, walk-in pantries, stainless steel appliances and master bathrooms with whirlpool tubs.

Perhaps there is someone out there who can show me that the locations mentioned in the story were developed without subsidy support, and therefor Menards faces no obligation to local taxpayers. Good luck.

Wal-Mart plays a similar game. Local municipalities basically give Wal-Mart the huge chunk of land they demand for their superstores; then Wal-Mart collects rent from "out-buildings" on the huge unused frontage that are leased by Wendy's and other tenants (Wal-Mart counts itself as a tenant as well, paying rent to itself in the ever-popular REIT tax avoidance scheme).

What a deal.

Menards breaks new ground

Retailer hopes developing subdivisions will pay off

By TOM DAYKIN
tdaykin@journalsentinel.com

Posted: May 5, 2008

People typically run to Menards to buy stuff for their weekend projects: a new drill, maybe a toilet seat.

But lately, the company is stocking something a bit more unusual: home sites.

Eau Claire-based Menard Inc. is becoming more active as a developer of residential subdivisions - an extension of the company's role as the nation's third-largest home improvement retailer.

Menard is proceeding with plans to develop two large subdivisions, in Warsaw, Ind., and Urbana, Ill., and is currently developing another subdivision in Yorkville, Ill. The company also owns land set aside for a small condominium development that might someday be built near its Oak Creek store.

Those projects are happening through opportune purchases of excess land as Menard buys parcels to build home improvement stores, said Jamie Radabaugh, director of sales and leasing for the company's property division.

"We are actively looking for new residential projects around our new and existing stores," Radabaugh said.

The company appears to be the nation's only home improvement retailer that's also a subdivision developer, said Scott Wright, spokesman for the North American Retail Hardware Association, an Indianapolis-based trade group with around 13,000 members - most of them independently owned stores.

"I certainly haven't heard of anyone doing anything like that," Wright said about Menard's side business. "Especially in this economic climate."

Menard did its first residential subdivisions, in Franklin and Eau Claire, many years ago. The company's land acquisitions have increased as Menard, which operates around 240 stores in 11 states, continues to grow.

Because it's privately held, Menard doesn't have to meet the quarterly earnings expectations that Wall Street demands from the chain's chief rivals, Lowe's Cos. and Home Depot Inc.; the latter announced last week the closing of 15 stores, including three in Wisconsin. The fact that Menard is not publicly traded gives it more leeway to invest in real estate developments, according to a company presentation made in January to the Urbana Plan Commission.

By developing residential subdivisions close to new stores, Menard creates a larger customer base among those new homeowners, and among local homebuilders.

Houses go up in Illinois

Menard's development in Yorkville, on the outer fringe of the Chicago metropolitan area, illustrates that strategy.

Yorkville is in Kendall County, which the Census Bureau recently named the nation's fastest-growing county.

In 2001, Yorkville annexed around 250 acres of farmland owned by Menard. Some of the land was set aside for a new store, which opened in 2003, said Lynn Dubajic, executive director of the Yorkville Economic Development Corp.

Additional parcels were set aside for 164 single-family homes and 68 townhouse-style condos, Dubajic said.

Menard put in utilities and other infrastructure for the single-family homes, and so far, it has sold 129 lots to AMG Homes, a local homebuilder. Since 2005, AMG has built 110 homes, said Chad Gunderson, AMG co-owner and chief executive officer.

The townhouse sites probably will be sold once the housing market improves, Dubajic said.

Materials from Menard

In purchasing the lots, AMG agreed to buy virtually all of its building materials for the project from Menard, Gunderson said.

The shopping list includes lumber, windows, doors, flooring materials and roof shingles, Gunderson said. AMG was allowed to buy a few products, such as concrete, from other vendors, because Menard doesn't sell them in large enough quantities.

The arrangement has worked out well for AMG, Gunderson said.

"We look at the contract as mutually beneficial," he said.

The company will have similar requirements with homebuilders buying lots from other Menard-developed subdivisions, Radabaugh said.

"It only makes sense to tie our company's main business with the residential development projects," he said.

Two more sites in works

In Warsaw, in north central Indiana, Menard is building a store that will open early next year, said Jeremy Skinner, city planner. He said Menard owns 70 acres, with 30 acres set aside for the store and other commercial use. The remaining land is for single-family homes.

Menard originally proposed 66 single-family lots for the Warsaw site but now is seeking to develop 89 lots, Skinner said. He said Menard is in discussions with a local homebuilder interested in buying the lots.

In Urbana, in east central Illinois, Menard bought just more than 350 acres at an auction in 2005. Menard is still working on its plans for a store, additional retail space, single-family homes and townhouses. The company expects to have a total of 425 residential units in Urbana.

As in Yorkville and Warsaw, Menard plans to sell the residential lots to homebuilders, said Lisa Karcher, a city planner. She said the entire project, including construction of all the planned houses and condos, will likely take five to 10 years to complete.

In the Milwaukee area, Menard owns just over 5 acres of vacant land northeast of its Oak Creek store, at 6800 S. 27th St. That store opened in 1998, just across S. 27th St. from a smaller Menards store in Franklin, which closed.

In 2001, Menard was granted permission to develop 22 townhouses on the Oak Creek parcel, but that approval has since lapsed, said Doug Seymour, Oak Creek director of community development.

Menard is looking for homebuilders interested in developing the Oak Creek parcel, Radabaugh said.

Menard's foray into development is "very interesting," said Wright, of the hardware retailers association.

The chain, which has grown despite increased competition from national players Home Depot and Lowe's, "has staying power unlike any other," Wright said.

Franklin Candidate Forum notes: part 2

Part 2 of my notes on Monday's Franklin Candidate Forum concentrate on the Aldermanic races, with an emphasis on the match-up in the 3rd District, which is where I live. I have declared myself free to editorialize throughout, and my bias will be clear, I'm sure.

With all due respect to the incumbent of District 4, Pete Kosovich, I think that race belongs to the challenger, Steve Taylor. Kosovich was swept into his seat during turbulent times when a pro-development faction of the city organized to stack the council. His theme is, "If it ain't broke, don't fix it."

Well, it's broke.

The format of the forum consisted of an opening statement by each candidate followed by a question that each candidate took turns answering. Each candidate was then given a couple minutes for a closing statement.

Here are some moments that stood out for me:

When asked how will your involvement make the city stronger, challenger Kristen Wilhelm spoke about getting her constituents more deeply involved, noting that she hears from people she’s talked to door-to-door that they’re exasperated by finding out about developments at the 11th hour rather than at a point where they might offer input.

Incumbant Alan Hammelman led off with his enthusiasm for proper development of 27th street, the first of many times he would mention that “golden opportunity.”

Asked about the appropriate balance of residential and commercial/industrial in the city, Hammelman again mentioned the 27th Street corridor and cited his goal to reach the “70-30 mix” (70% residential, 30% commercial/industrial). He touted his desire to create a pro-business climate to take some tax burden from homeowners.

Wilhelm pointed out that she’d like to find ways to encourage locally-owned businesses so money spent here can stay here.

How would each candidate involve their constituents? Hammelman’s response was particularly revealing and consistent with the current poor state of communication between Franklin city government and citizens:

“You’ll hear people say, ‘How come I didn’t know about this development on XYZ Street?’ It’s very difficult to make 500 outbound calls, know all the right numbers and so forth. It is imperative that our constituents take an active role by looking at agendas on the website and so forth. So, part of being in a democracy is being aware of what’s happening in your local government.”

Not particularly inspiring.

I preferred Wilhelm’s answer, which revealed a knowledge of the existence of the internet and email (“500 outbound calls"?). She also pointed out the city’s well-known deficiency in recording meetings for people who cannot attend them. (We live in a city where meetings are stopped so the cassette tape can be turned over and recording resumed; digital recording technology continues to elude us.)

A digression: Can it be possible that we have alderpersons on the present council who believe:

A) The primary means of relaying information to their constituents is via telephone,

B) Rather than make a point of creating better systems for communicating ongoing information to citizens, it falls to his/her constituents to sort through the tangle of menus and submenus on the city’s website to track an issue or project?

In Franklin, if you want to track, for instance, the Shoppes at Wyndham Village project, you have to check the individual agendas for every council, commission, etc. daily to see if that item might appear there. And the agenda can change at any time. Go to the City of Franklin website right now and try it!

Compare that insane mess to the way it’s done in Davis, California - - take a moment to check out their website here. Click "Cannery Park Project" under "Current Issues" - - magic! A complete, up-to-date and comprehensible summary of the entire project, including meeting digests, documents, and alerts for future meetings on the project. It's worth a screen grab - -

Now that's communication. That's how you can get citizens behind progressive, forward-thinking developments (like mixed-use commercial/residential) that may seem intimidating when viewed at the 11th hour.

"500 outbound calls," Mr. Hammelman? Will that be on a rotary phone?

Back to the forum:

When asked what is the biggest issue facing the district, "business-friendly" Hammelman inexplicably named "Sycamore Street." What is Sycamore Street? It's the proposed throughfare for the Wal-Mart expansion that the "business-friendly" council recently rubber-stamped. Suddenly Hammelman is in there swinging for his constituents - - a few weeks before the election.

In his comments, Hammelman also returned to his fixation,  TIF-magnet, Oak Creek-feeding 27th Street. (Is Oak Creek funding Hammelman's campaign?)

Wilhelm reminded Hammelman that, despite his boast of having recently "introduced a motion to prevent Sycamore Street from going through," the matter had been essentially settled long ago; the mayor asked the Wal-Mart developer if they planned to run the road through, and they answered "no."

NOTE: From the February 27th edition of Franklinnow.com: "Deborah Tomczyk, an attorney representing Wal-Mart.. said nearby Sycamore Street will not be extended, a major concern last year among residents that live near the Wal-Mart."

Meanwhile, Wilhelm continued, nearly every road that bounds the 3rd District has problems that are being ignored - - try carrying a bag of groceries from Sendik's to anywhere - - while Hammelman fixates on 27th Street and an already-dead issue. 51st Street is a death-trap. Access to the Oak Leaf Trail is extremely limited, which hobbles a potential amenity, etc.

Let's skip ahead to the candidate's vision of Franklin in 15 to 20 years.

Wilhelm talked about working to create a sense of community; a place where people are not isolated in "pods":

"Let's create public spaces where we can be comfortable walking and meeting each other. Quality restaurants, varied retail and shopping, a variety of housing opportunities; not just serving the high end and forgetting the needs of lower income people. Create something to really attract people here. Look at the town of Greendale and how people say it’s so wonderful - - it's just a little ice cream shop. We have nothing like that here in Franklin. You need something that will bring the people here."

Unbelievably, Hammelman again banged the 27th Street drum, actually leading off with "I envision some very wonderful things happening on the 27th street corridor." Then, as Franklin attempts to get a handle on our present infrastructure, he called for more expensive sprawl and more isolation: "I also look forward to putting sewer into the southwestern section of the city, so we can see some new development there."

Why? Because it's there, I guess. And there are still developers out there who having gotten their "dip."

In their final statements, Hammelman was up first and reiterated his "business-first, residents-second (hopefully)" vision: "This council and I have set into motion a pro-business environment that can provide some much-needed tax relief and increase the quality of life for our residents." He thanked department heads for their hard work, and then noted endorsements by Mayor Taylor, Casper Green, and Lyle Sohns.

Observation 1: If you note an endorsement by one member of the Common Council (Lyle Sohns), are you not calling attention to the fact that none of the remaining members bothered to do the same?

Observation 2: Casper Green is a tireless volunteer and community asset who works extensively with Franklin's elderly community, and undoubtedly helps them procure their absentee ballots. Well played, Mr. Hammelman - - that may be the only "endorsement" you need.

Wilhelm took the opportunity to note that she works well with others after years of experience doing so, but is still willing and able to speak her mind. She also pointed out that she is a hard worker, having been in a volunteer position for the city for the past 8 years, during which time she has become familiar with Franklin's various codes and procedures.

All in all, a productive forum; the candidates' differences were made clear.

Next up: The mayor's contest.

Business subsidies: Revealing who is getting a free lunch at your expense

Who else finds it interesting that the CNI NOW websites created an easy way for you to see exactly how much a 3rd grade teacher is paid - - with his or her name included in the data - - but they don't provide a chart detailing the state and local subsidies and corporate welfare doled out to, for instance, Wal-Mart, Target and Cabela's?

One reason they don't is the fact that these subsidies are cleverly hidden, even at the municipal level. Frankly, most elected officials are unable to enumerate for you the full extent of subsidies granted to individual developers and businesses.

We'll talk more about these subsidies as they relate to Franklin and communities like ours in the very near future. You'll be very surprised at the bounties suburban governments are willing to give to big boxes for the favor of locating in their side of the street, and further surprised at how well hidden these subsidies are. Then, you'll be outraged when you learn that there is little or no return on these expenditures; in fact, most often the local municipality sees a loss, all in service to competing against the suburb across the street. Across 27th street, for instance.

To repeat a Franklin Alderman's quote of last week:

"Congratulations," said [District 2] Alderman Timothy Solomon to Deborah Tomczyk, an attorney representing Wal-Mart. "We're not all against Wal-Mart just so you're aware. You're bringing forth a very nice project."

Remember those words.

Corporate socialism is alive and well ...

From the Milwaukee Journal Sentinel:

Transparency on business subsidies

By BRUCE SPEIGHT  and PHINEAS BAXANDALL

It always makes sense for government to improve the bang it gets for its buck, but especially during tough budget times. Democrats and Republicans deserve credit for having found a way to do so.

The state of Wisconsin currently faces a $652 million budget deficit. Despite partisan bickering that delayed this year's budget by four months, representatives from both chambers have reached across party lines to pass bipartisan bills that create public disclosure of government subsidies for economic development.

Last summer, the Journal Sentinel examined deals with 25 big companies that were awarded about $80 million in state subsidies over a six-year period. The investigation found that overall the companies fell about 40% short on the job creation they promised in order to receive the subsidies. In the absence of established accountability mechanisms, the investigation reported that the state often lowers its requirements rather than canceling the subsidies or seeking repayment.

Legislation passed this week should prevent such scandals in the future. It consolidates and strengthens rules about disclosure of state expenditures intended to spur business in the state. It will make information about subsidies readily accessible through a searchable online database that lists who receives commerce subsidies for what purpose. It also provides a type of taxpayer money-back guarantee to recoup state funds if recipients do not deliver on their promises.

Regardless of how much public money one believes should be spent on business incentives, improved transparency makes sense. We live in an era when Americans expect to be able to search their own bank accounts or cell phone bills online, in which we can verify information people tell us by Googling it. To restore public confidence in government, we must also have "Google-able government" when in comes to transparency and accountability for the public purse.

The great advantage of disclosing and integrating information about subsidies is also captured in a simple business nostrum: You can't manage what you can't measure. At present, subsidies get doled out through an uncoordinated range of disparate programs that lack a larger vision of the whole. It is not possible, for instance, to access whether subsidies are focused on the right industries or regions and to determine which incentives create the most high-paying jobs. Reliable and comprehensive data make it possible to assess whether we are implementing programs fairly and effectively. It also makes it possible for state managers to evaluate how money could be better spent.

The law, which is expected to be signed by the governor, follows in Wisconsin's proud tradition of open government. Our state also has become a leader in disclosing the activity of lobbyists and disbursement of procurement contracts.

To realize the law's full potential will require careful rule-making and attention to the reported information. The information must be fully searchable and should include details about subsidy recipients' promised investments, jobs and health care coverage, for instance.

Most important will be to ensure that accountability follows transparency. The provision for "recouping" subsidies from recipients that don't deliver or lie about their performance must be enforced to have real teeth. Watchdogs inside and out of government will need to keep a close eye on the information.

As Wisconsinites prepare their taxes this season, they can rest a little easier knowing that a new tool for transparent government will be working for them.

Bruce Speight is a public interest advocate with Wisconsin Public Interest Research Group. Phineas Baxandall is a tax and budget policy analyst for WISPIRG.

 

What about that Wal-Mart expansion?

A couple of emailers have asked why SPRAWLED OUT seems to be ignoring the Wal-Mart expansion plans on 27th street.

First, of all - thanks for asking!

Three main reasons:

#1, I recognized early on that it was a done deal and there would be little or no discussion about it. Turns out, there wasn't even public comment allowed at the Plan Commission meeting where the expansion was to be discussed - an "error on the agenda," according to Mayor Taylor. Alderman Hammelman, with whom I have no beef, evidently did himself no re-election favors by failing to speak out strongly for his constituents and demanding the reinstatement of the planned public comment period.

#2, the expansion is literally a blight absorbed into a blight. The Wal-Mart physical building and the entire area around it has been allowed to sink into decrepitude that is creeping outward in an ever-widening orbit of near-squalor.  The message sent by Wal-Mart seems to be: Let us expand and we'll clean up after ourselves. A little. Maybe. For a while.

#3, SPRAWLED OUT will comment comprehensively on corporate socialists like Wal-Mart in the near future, as well as businesses like Gander Mountain who have, without fanfare, actually turned down handouts from eager-to-please local governments - - the same handouts that companies like Wal-Mart and Cabela's unashamedly demand (and get).

An aside to Alderman Solomon ("Congratulations," said Alderman Timothy Solomon to Deborah Tomczyk, an attorney representing Wal-Mart. "We're not all against Wal-Mart just so you're aware. You're bringing forth a very nice project."): Those who are not wary of Wal-Mart do not understand Wal-Mart.

Stay tuned.

And now, back to a period of grieving for the loss of #4.

Pabst Farms "tweaked": "I didn't want to see people crossing parking lots."

A few cosmetic changes here and there, but Pabst Farms is still big box heaven. On the plus saide, the developer has evidently made some strides in indicating internal roadways and pedestrian walkways through the mall.

"That was one of my concerns," city Planner Jason Gallo said Thursday. "I didn't want to see people crossing parking lots."

[Plans are posted at the Metro Milwaukee Development News blog.]

Not the case here in Franklin. The central feature of Shoppes at Wyndham Village (aka The Target Strip Mall; c'mon, let's be honest here) is a huge parking lot.

From the Milwaukee Journal Sentinel:

Pabst Farms plans tweaked

Shopping area developers drop hotels, move stores back, add small pond

By AMY RINARD
arinard@journalsentinel.com

Oconomowoc - In revised plans submitted Thursday, developers of a proposed shopping mall at Pabst Farms have eliminated two hotels, moved some big-box stores slightly and added a small pond at the corner of I-94 and Highway 67 after city officials objected to the original site plan.

Two weeks ago members of the Plan Commission sent Developers Diversified Realty back to the drawing board. Commissioners concluded that they did not like the way several large big-box stores planned for the I-94/Highway 67 corner turned their backs to the intersection, which is considered a key gateway into the city.

Pabst Farms spokesman Thad Nation said Thursday that the revised plans provide for an attractive entrance not only to the city but to the shopping mall. The I-94/Highway 67 intersection would have considerable landscaping and a large sign that would read "Pabst Farms Oconomowoc."

"This is the gateway to Oconomowoc, and we want to treat it in a way that respects the type of development we're trying to do and the image the city is trying to project," Nation said.

The stores now are back farther from roadways, but the plan still calls for the backs of the buildings to face Highway 67 and the I-94 westbound exit ramp at that corner of the mall, he said. However, he said, the buildings would be built in such a way that each side would be equally attractive.

Developers had told Plan Commission members that the locations of those big-box stores were "sacrosanct" because retailers wanted to be at such a visible spot along major highways.

Commission members also had questioned the proposed height of the two hotels in the previous plan. A variance from the city's zoning code for residential buildings would have been needed to build the two 65-foot-high hotels.

"At this point, they're out of the plan," Nation said of the hotels. "If there's demand in the future, we would come back before the Plan Commission."

In the revised plans, developers have better indicated the system of internal roads and pedestrian walkways through the mall.

"That was one of my concerns," city Planner Jason Gallo said Thursday. "I didn't want to see people crossing parking lots."

New developer, new vision

Developers Diversified took over the mall development after its previous developer, General Growth Properties, bowed out of the project last fall.

In their plan for the more than 1 million-square-foot Pabst Farms Town Centre, Developers Diversified officials proposed what they called a community shopping area along Highway 67 and the westbound I-94 off ramp.

It would feature a string of large and smaller, single-story big-box stores rounding the I-94/Highway 67 corner.

The project's upscale lifestyle shopping area, complete with small lake, would feature specialty shops anchored by three larger stores and a cinema, and would be located behind and slightly east of the big-box stores that would be lined up along the project's most visible area.

A public hearing on the revised mall plan is scheduled for Feb. 7 before the Plan Commission. Commissioners are expected to decide that night whether to advance the plan to the Common Council.

Pabst Farms developer to Oconomowoc mayor: "Retailers dictate where they go, and we know our business better than you do."

We saw it here in Franklin when the city rolled over for the developer of Shoppes at Wyndham Village; observe how big boxes - and COMMERCIAL DEVELOPERS -  can define the very character of an entire community. If the developer gets what he wants in this case, the gateway to Oconomowoc will be characterized by "large expanses of flat roofs, air conditioning units and other mechanicals, loading docks and Dumpsters."

But the developer will have enriched himself sufficiently, so all is well. Wonderful - another drive-thru city.

From the Milwaukee Journal Sentinel:

Pabst Farms changes sought

City worried about big-box stores backed up against roadways

By AMY RINARD
arinard@journalsentinel.com

Oconomowoc - City officials have asked the new developers of the proposed Pabst Farms Town Centre shopping mall to move big-box stores away from the corner of I-94 and Highway 67, an area considered a key gateway into the city.

But an official of Developers Diversified Realty told members of the Plan Commission Wednesday night that the request could be a deal breaker because that corner is exactly where big retailers want to be.

"Retailers dictate where they go," said Tim Bruce, executive vice president for development services for Developers Diversified. When pressed on the issue of shifting the site plan, he flatly told Mayor Maury Sullivan and the rest of the commission, "We know our business better than you do."

Sullivan said Thursday that the issue is significant and one Developers Diversified must address before its plan will be advanced by the city.

"This is a special place, and whatever is there, we want it to complement the city," he said.

The new plan for the more than 1 million-square-foot Pabst Farms Town Centre calls for a community shopping area along Highway 67 and the westbound I-94 off ramp.

It would feature a string of large and smaller, single-story big-box stores rounding the corner close to, and with their backs toward, the roadways. In the other malls, described to the commission as examples of the company's other projects, retailers included Super Target, Office Max and TJ Maxx stores, among others.

The project's upscale so-called lifestyle shopping area, complete with small lake, would feature specialty shops anchored by three larger stores and a cinema, and would be located behind and slightly east of the big-box stores that would be lined up along the project's most visible area.

"This is a departure from what was previously planned," said Bruce, referring to the plans of General Growth Properties, which consisted mostly of the high-end type of development.

But, he said, there was a reason General Growth dropped out of the project and why the new plan with its new big-box store area is more likely to be a financial success.

"The last plan did not work," he said.

Talking with retailers

Bruce said his company is in negotiations with two large national retail companies interested in building large anchor stores planned for the corner of the I-94 westbound off ramp and Highway 67. He said those companies want that location.

The general layout of the site "is sacrosanct from our perspective," Bruce told the Plan Commission.

Commissioners found many things to like about the new plan and gave it a tentative green light Wednesday night. But they have given developers until Jan. 24 to return with an amended proposal that addresses the location of the big-box stores and a number of other concerns raised by city staff, including the site's internal road system.

Dumpsters at entrance

Sullivan said that while the request for a shift in the site plan to reduce the visual impact of the big-box stores got a chilly reception from the developers so far, he hoped they would make the change.

With the large one-story buildings backed up along the elevated I-94 off ramp, motorists would be greeted by large expanses of flat roofs, air conditioning units and other mechanicals, loading docks and Dumpsters at the entrance to the city, he said.

"We want some changes made," said Sullivan. "If they respond and make the changes, we move on. If they don't, then we'll have to decide what to do next."

Stan Sugden, the city engineer who is a member of the Plan Commission, said city officials will have only one chance to decide on the best development for that prime piece of city real estate at I-94 and Highway 67, and they had better get it right.

"That is the gateway into the city, and we want to make sure we protect that vista and make it the best we possibly can," he said.

Ernst & Young: Corporate share of state and local taxes in Wisconsin is among the 10 LOWEST in the country

The "Tax Hell" demagogues of the right wing - - taxation is the only issue they can get both hands on without bloodying them - - like to give their corporate campaign contributors a big juicy PASS on paying their fair share of taxes, which means a bigger bill lands in the laps of individuals.

Good corporate citizens like Harley-Davidson, Sentry Insurance and others pay their fair share every year. "Taxes for us are not bad," Northwestern Mutual Life CEO Ed Zore told the Journal Sentinel in February.

But - how long will "good corporate citizens" continue to be tax-paying suckers if their competition is successfully and stealthily avoiding even a penny in their fair share?

Answer: Not very long. And the difference will be made up right out of your pocket.

From the Milwaukee Journal Sentinel:

Bill on tax disclosure is worthy

By KAREN ROYSTER

Posted: Jan. 3, 2008

Wisconsin is transforming its economy to attract biotech investors, 21st-century service entrepreneurs and talented young people looking for a community that supports economic growth and a quality lifestyle for families. Good education, safe streets, strong transportation, flourishing parks, recreation and culture as well as a broad network of effective community services attract investment and immigration.

These systems can be effective only if there is adequate public revenue for ongoing development and maintenance. However, in the past 10 years, our state and local communities have faced annual budget shortfalls even as property taxes increase.

Research over the past two years has unearthed some discouraging facts. Corporations avoided $643 million in Wisconsin income taxes in 2006, according to a recent study in the tax journal State Tax Notes. Accounting giant Ernst & Young calculated that the corporate share of state and local taxes in Wisconsin is among the 10 lowest in the country.

Clearly, a basic examination of who is paying what taxes is an obvious step to take. All people and businesses have a right to know if every entity using public services is paying a fair share of the cost.

In December, the Institute for Wisconsin's Future reported that Microsoft, the computer behemoth that made $12 billion in profits in 2005, didn't pay a penny of Wisconsin corporate income tax. Nor did Merck, the pharmaceutical giant with $5 billion in 2005 profits. And Sears, whose retail family includes Kmart and Lands' End, made $1 billion in 2005 profits without paying any Wisconsin income tax.

All three mega corporations, however, use substantial amounts of money for accountants and lawyers to find loopholes that allow them a free ride on public services paid for by families and local businesses.

Good corporate citizens like Harley-Davidson, Sentry Insurance and others pay their fair share every year. "Taxes for us are not bad," Northwestern Mutual Life CEO Ed Zore told the Journal Sentinel in February.

But there is no level playing field among business groups. No one knows for sure who is paying and who is not. The public and the Legislature are in the dark about corporate taxes.

Sen. Dave Hansen (D-Green Bay) has proposed legislation to address this problem: the Wisconsin Corporate Tax Accountability Act (SB 367). The bill would require major corporations with publicly traded stock to disclose the facts about their profits and tax contributions to Wisconsin.

More than 99% of all Wisconsin businesses are not affected.

If the bill becomes law, Microsoft, Merck and Sears will have to report their revenue and tax payments. Will they boycott Wisconsin? Will they stop selling us their software, their drugs, their tools and appliances and clothes? No.

Wal-Mart has bragged that it uses a real estate gimmick in 82 of its 89 Wisconsin stores in order to slash its state taxes. Wal-Mart pays rent to itself for the stores, using various corporate subsidiaries to do so in a way that virtually eliminates its Wisconsin profits. Will Wal-Mart shut down here if the state makes its tax avoidance public information?

Hansen's bill is asking for facts - honest disclosure about which big corporations are paying their share and which are not. This disclosure would give taxpayers and legislators information that's desperately needed in order to have intelligent and informed debate about tax reform.

Karen Royster is executive director of the Institute for Wisconsin's Future.

A quasi-Ph.D who is unclear on the concept of "profit," or, "Bow and give alms to our benevolent corporate overlords!"

Barbara Fischer, a Milwaukee Journal Sentinel "community columnist," has become a personal favorite of mine for her can't-believe-it's-not-a-parody, Ayn Rand-ian, compassion-free world view (see previous related blog entry here).

Her latest, pasted below, is another jewel. 

Ms. Fischer says in her bio "I am chair of a business and economics department at a private liberal arts university in the metropolitan area. I have been a professor for 15 years." As for the cryptic alphabet soup appended to her name,  Jim Bouman at Waterlogged in Waukesha enlightens us:

Ph.D. A.B.D., for the untutored, describes an utterly laughable reification. Someone who lists "Ph.D., A.B.D." as a credential will try to persuade you to buy a "Semi-boneless Ham" or a pint of "Fat-Free Half and Half".

A.B.D., it turns out, means "all but dissertation." Or, in other words, NOT a Ph.D. To read her interaction with her "class," by the way, leads one to think she's teaching elementary school rather than a college level course.

Something has to be behind her fairly breathtaking error regarding what "profit" is. She begins:

Being a conservative economics teacher at a liberal arts college is not easy. Oftentimes when I am teaching market structures (bear with me here), the inevitable comments and questions arise: Why are businesses so greedy? Why do businesses earn excessive profits? We should boycott Wal-Mart. The oil companies are gouging us.

I decide to use this as a "teaching moment."

The lesson begins this way:

"Let's take a few minutes to answer some questions. Who pays for your tuition?"

Several hands go up. One student retorts, "I pay my own way." I ask how. "From my own paycheck, of course." I ask, "Who pays your paycheck?" The student responds, "The company."

"And how does the company have the means with which to pay you?" The student replies, "I guess from their profits." I respond, "That is correct."

Not correct - and may make for some interesting tax audits (Pundit Nation spotted the goof as well). Profit is what you have after  subtracting costs of doing business - - and, as much as free market warriors would like to forget them, paying the employees has to be considered a cost of doing business, not something you do if you get into the black.

I see the error as revelatory. The days when employees were treated as partners in the quest for profit are fading from memory, and Barbara Fischer's "teaching moment" unwittingly - though starkly - illuminates the ideological underpinnings to that slide. Being a self-described conservative academic has evidently sheltered her from reality to the extent that she exposes a bit of wishful thinking: "We (the saintly 'Corporation') make money, and we'll pay the work force whatever dribbles over the edge. IF something dribbles over the edge."

Ms. Fisher's Mentos commercial (I picture these fine young academicians exchanging high-fives as they get hip to "Fischernomics") is comically myopic and ends with a bang:

"The next time you hear about the evil oil companies, the evil Wal-Marts or any other evil company, remember that without them, you would not be at this institution, I would not be here, your other professors would not be here and the new building would not be built."

No, folks, this isn't satire. The column, and the delicious quote above, are authentic. I guess her point is, let these benevolent Corporate gods do what they will, because we suckle at their teat and they have made us what we are.

Wrong again.

She's apparently never heard of the GI Bill, a government program which made college affordable for an entire new population segment (i.e. non-wealthy) and their children.  And she seems to ignore the fact that the this new high-level workforce helped create the postwar US economic juggernaut. Corporations have responded - - only after government initiative showed them the way - - by seeding the academic ground for more talent by contributing to institutions of learning.

And how about a world where corporate whims are unfettered by government regulations? Let's go back to 70 hour work weeks and sweatshops packed with nine- and ten-year old kids - -  that's what worked for corporations before they were reined in.

Ladies and gentlemen, from the author of "Misgivings about taking action for the 'common good" and "What's so wrong with being selfish?" here's an ode to letting our Corporate betters do what they will  - - unencumbered by silly regulations or the need to pay taxes - - so they can continue their selfless good works:

Don't slap the hand that feeds you

By BARBARA FISCHER

Being a conservative economics teacher at a liberal arts college is not easy. Oftentimes when I am teaching market structures (bear with me here), the inevitable comments and questions arise: Why are businesses so greedy? Why do businesses earn excessive profits? We should boycott Wal-Mart. The oil companies are gouging us.

I decide to use this as a "teaching moment."

The lesson begins this way:

"Let's take a few minutes to answer some questions. Who pays for your tuition?"

Several hands go up. One student retorts, "I pay my own way." I ask how. "From my own paycheck, of course." I ask, "Who pays your paycheck?" The student responds, "The company."

"And how does the company have the means with which to pay you?" The student replies, "I guess from their profits." I respond, "That is correct."

The next student says, "I get a scholarship from the university." I say, "All right, and where does the university obtain scholarship funds?" "From our tuition?"

"Not really," I say. "It comes from donations and other similar means. Who provides these donations? Individuals and companies. And where do you suppose these individuals and/or firms get those funds?" From profits is the answer - again.

Another student replies, "I receive government grants and/or loans."

"And where do you suppose these funds originate?" I jump the gun and reply, "From taxes. Who do you suppose pays all the taxes? We do - from our paychecks from companies who create the jobs from profit. And let's not forget, companies pay taxes as well - from their profits."

Yet another student replies, "My parents are footing the bill." Before, I can say anything, some will say, "We know, from their jobs created by companies from their profits."

"Yes, but now let's move on to something a little closer to us right here. Where do you suppose the university received funds for the brand new building that was built? And the answer is not tuition. From individuals who donated the funds. And, in turn, where did these individuals obtain their funds? From either having a job or creating a company and donating money from their profits."

At about this time, a student will mention that not all individuals work at for-profit organizations. "Excellent point," I retort. "Let's discuss that next."

"Where do most not-for-profit organizations obtain their funds? From donations, which come from individuals who have a job created by business from their profits! Or perhaps from government funds, which come from taxes, which are paid by individuals from their salary created by profits. Or from selling services paid for by individuals who have jobs.

"What about people who work for government?" As I open my mouth, a student will say, "From our taxes, which come from people with a job created from profits."

I ask one last question. "Who do you think pays my salary?" That is an easy one as they say in unison, "We do! From our tuition that comes from our jobs, our parents, government, etc."

By now, they get the drill.

So I tell them, "The next time you hear about the evil oil companies, the evil Wal-Marts or any other evil company, remember that without them, you would not be at this institution, I would not be here, your other professors would not be here and the new building would not be built."

Companies are the economic engine that drives the economy of the United States of America.

I rest my case.

Barbara Fischer of Port Washington chairs the business and economics department at a local private university. Her e-mail address is bfischer4@wi.rr.com

Local columnist's latest love letter to Wal-Mart

Image above from Wal-Mart: The High Cost of Low Price

Always entertaining are Journal Sentinel columnist Patrick McIlheran's periodic love letters to Wal-Mart.

Wal-Mart gets slammed here regularly, but that's not to say that Walton's Warriors aren't getting the message and cleaning up their act to some extent. So, in his latest piece of Wal-Mart P.R., does McIlheran pat them on the back for recently upgrading health insurance programs for its employees? Tout recent environmental measures the company has adopted?

No and no, because that would be admitting that Wal-Mart was grossly deficient in those areas in the first place - - and the conservative Hive Mind takes its cue from Bush/Cheney in never admitting errors.

Rather, he pulls out the tired playbook and deploys his old favorite rhetorical tools: oppose Wal-Mart and you're a "snob"; since low prices and poor quality are "popular" with the discerning masses, Wal-Mart is heroic in meeting that need; well-liked Aldi must be something like maligned Wal-Mart because both feature low prices (that's particularly brilliant); the "made-in-China" straw man is deployed (well, other stores sell products made in China...);  you're just "bossy," darn it!; and, "if you don't like it, don't shop there."

Yeah. That'll show 'em.

In McIlheran's world, evidently, there are simply no community impacts resultant from dropping a giant, fairly unkempt big-box into the middle of a suburb - - one that might be attempting to construct a certain manner of community that rises above garage-to-parking-lot purgatory. (McIlheran: "adorable little commuter-rail 'burb." Sense him snarling?) 

Never mind Wal-Mart's habit of abandoning stores and leaving them to rot. Or, for that matter, their massive tax avoidance,  indifference to local sensitivities, ability - and regular tendency - to strangle suppliers, wage and benefit policies (now finally being addressed to some extent after lots of "liberal whining") that flood state social services (pdf link), gun-to-the-head negotiations with befuddled and overmatched local municipalities, regular and clear violations of local zoning ordinances, etc.

Snobbish concerns, I guess.

For a perspective that arguably veers toward the "snobbish," McIlheran could read "How Not To Like Wal-Mart," which is written by a guy who seems to agree that Wal-Mart is not the big bad wolf, but nonetheless a powerful reinforcer of all that is sub-par and just-below-adequate - - reason enough to avoid their influence and motley presence in any community you care about. If all that worldwide economic/social impact nonsense doesn't do it for you.

McIlheran: "The hallmark of Wal-Mart isn't that it sells Chinese goods; it's that it's cheap."

Wrong. The hallmark of Wal-Mart is not simply that it is cheap; it's that Wal-Mart is a powerful beacon for the victory of enormously profitable banality at all costs. We mourn the loss of excellence and sense of pride in something beyond a company bottom line that rewards only those on the top rungs.

On a related note: The new Eagles' album is currently  stocked exclusively at Wal-Mart.

Cents and sensibility in retail
By Patrick McIlheran

Wal-Mart wants to put a big store in Cudahy. As it would fill a brownfield now broken only by the rusting hulk of a half-built ice skating center, you'd think people would be OK with this.

"I am not a fan of Wal-Mart," Mayor Ryan McCue said. Last winter, when running for mayor, he said Cudahy has an image problem and Wal-Mart would only make it worse.

Yeah? Rusting, abandoned projects don't do much for glamour, either. A Wal-Mart Supercenter - those are the ones with full-size grocery stores - would probably be a rung up the ladder. Of the seven such Supercenters within 40 miles of Milwaukee, every one is in a ZIP code with higher median household income than Cudahy - 38% higher, on average, in the 2000 census.

In the past, McCue's said Wal-Mart doesn't fit in with transforming Cudahy into a high-end, adorable little commuter-rail 'burb. If that's the vision, I don't see where my usual Cudahy shopping haunt, Aldi, fits in. The grocery chain has one of its small, stripped-down stores at Packard Plaza. I shop there a lot because it's cheap, selling house-brand staples and staffing so lean that the managers help clean the place. High end, it's not, but I like it.

But Aldi doesn't seem to arouse bad feelings while Wal-Mart does. A whole complex of retail snobbery and trade angst has arisen around it. "We do not need another outlet for cheap Chinese crap," said one man at a Cudahy meeting this month, neatly packaging the mess of rage.

So Cudahy needs, instead, costlier Chinese crap? The hallmark of Wal-Mart isn't that it sells Chinese goods; it's that it's cheap. The union-funded Economic Policy Institute, fount of anti-Wal-Mart data, can't say whether the chain has more Chinese goods than Target or Kmart. Robert Scott, EPI's point man on the issue, won't venture a guess, but he says his impression is that all discount retailers rely heavily on China.

For that matter, Kohl's imports from China. You just pay more. My wife's $79 iPod was made in China. I bought it at Mayfair Mall. Does that qualify as an outlet for cheap Chinese crap?

"The dividing up of the supply chain makes it harder to target particular countries for your personal boycotts," says Daniel Griswold, a trade scholar at the libertarian Cato Institute. People rail about Wal-Mart, though Griswold says that its niche - bargains - happens to align well with China's specialty, which is low-cost stuff from low-value labor. One of Cudahy's specialties is jet engine parts made by high-value labor in the big Ladish Corp. plant. Ladish sells about half its goods overseas, so you'd think neighbors would see a stake in trade.

Besides, Wal-Mart Supercenters are mainly about groceries. Groceries are mainly domestic. The Wal-Mart milk I bought at a Supercenter in Germantown came from the same Sheboygan plant as the Dean's I got elsewhere. The difference is price.

That's what this really is about: the prices of groceries and the cost of unionized grocery labor. Most traditional grocers are unionized. Wal-Mart, like most other retailers, isn't.

"You can date the union pushback on Wal-Mart to the time they entered the grocery business," says Griswold. One of the biggest anti-Wal-Mart campaigns is sponsored by the United Food and Commercial Workers.

Unions contend that Wal-Mart workers need one, as they're oppressed, though the chain pays wages and benefits on a par with other big discount retailers. If anything, the staff at the Germantown store Sunday seemed preternaturally friendly. The checkers at Aldi are even friendlier, and they're non-union. The chain makes a point of paying well so it can get by with a small, happy, flexible staff. So much for the value to the customer of unionized help.

That may be why the grocery unions aren't touting their merits to customers: The value proposition is hard to see. Instead, these defenders of the working class are in the odd position of making a snobbery attack on a chain that grew by saving working-class customers a fortune.

It is as topsy-turvy an argument as another one you hear, that consumers already have a perfectly sufficient number of choices and so do not need a Wal-Mart that will instantly lure them from those perfectly sufficient choices.

It's all cheap bossy crap, to repurpose a phrase. How about just letting people shop where they want? Wal-Mart appears to have a clue about what customers want. If you don't like it yourself, don't shop there. If you don't like the wages, don't work there.

If your neighbors feel otherwise, that's their business, not yours.

Patrick McIlheran is a Journal Sentinel editorial columnist. His e-mail address is  pmcilheran@journalsentinel.com