Walmart Is Coming to D.C. Is This Good or Bad?

The D.C. planning department is moving forward with allowing Walmart to set up four new stores within the district. According to a panel at the National Building Museum, there may be some positive and negative impacts with this. Positives: There are food deserts within the district and the new Walmarts, which will emphasize groceries, will increase the supply of fresh produce. There’s a significant untapped market: Harriet Tregoning, D.C. planning director, says D.C. residents spend $1 billion annually in neighboring districts. That money could be spent here instead. Also, the inner-city is a significant “emerging market” with underserved populations, but one that few big retailers are ready to tap. Negatives: Walmart’s labour practices haven’t really changed. In instances where they have moved into downtown areas (such as Chicago), there were increased small store closings and job losses in a four mile radius of the new Walmart. Walmart often picks up and leaves if it doesn’t see a market in a community, meaning that huge stores could become vacant, acting as a drain. Lastly,  these large stores may encourage more driving, and may not be environmentally or economically sustainable.

D.C. Focuses on Groceries and Good Design

Harriet Tregoning said D.C. only has 8.6 square feet of retail per capita, far lower than the national average, which is 23.3 square feet per capita. As a result, D.C. residents spend $1 billion in neighboring districts each year. To remedy this, the D.C. planning department is trying to bring more retail to the city. “Many neighborhoods have unfilled retail potential, with an unbalanced mix, and a lack of basic services.” She added that the “perceived weaknesses” in the D.C. market have limited retail growth in emerging areas. Still, she thinks D.C. is a great market: “We have a population of 600,000 that grows to 1 million during the day. We have 14 million visitors annually. Our density is eight times the national average. There is spending power here.”

D.C. wants these four new Walmarts to focus on groceries because there are many food deserts within the district. “There’s been a dearth of supermarkets, although a dozen have come in in recent years.” However, the district wants to protect the growing “clusters” of small retail businesses that have taken root, such as those around 14th street and H streets. Also, she pointed to young entrepreneurs who have “taken advantage of regulatory loopholes” and started food trucks. “There are dozens now, many associated with bricks and mortar stores.”

There is some precedent for bringing in Walmart. The Columbia Heights project, which brought in Target, has been a “major success” for the city. There has been $1 billion in investment in a one-square mile area, including 81 projects, 4,000 units of housing, and 800,000 square feet of retail. “This is one of Target’s best stores.” However, she pointed to missteps with the project: At a cost of $42 million, the city built 1,000 parking spaces into the main shopping center that houses Target. “We built more than was necessary. A whole level hasn’t even opened.” To make back some of the debt payments, the city is now leasing out many of those parking spaces for daily or monthly use. D.C. learned its lesson and is now “getting rid of our parking requirement, and allowing shared parking.” This enables stores to contract someone else’s spaces.

Tregoning concluded that what people want is a good “shopping experience,” an urban form for retail, and stores accessible to transit. As a result, the “location and form of big box retail in D.C. needs to be different.” For example, she pointed to the Home Depot on Rhode Island Avenue, which is not doing well because it can only be easily accessed by car and “could be in any suburbs.” She added that “having existing activity at big box destinations is important.” In an effort to ensure the city’s experiment with Walmart succeeds, the city has required Walmart to up the ante on its design and fit within the district’s strong urban design guidelines.

Mitigating the Neighborhood Impacts of Walmart in Cities

Kennedy Smith, principal, the Community Land Use and Economic Group, argued that all communities want “good jobs, good retail variety, increased tax revenues from stores, and good schools, services.” She wondered whether there is market demand for four new Walmarts in D.C. Based on her calculations, the proposed stores in Union Square, Brightwood, New York Avenue, and 58th and East Capitol, would bring in around $183 million a year, and “may capture a chunk of some of that $1 billion lost.” The big question, though, is whether these new Walmarts will kill off existing businesses.

On the west side of Chicago, Walmart opened a store in 2006. A study Smith summarized surveyed businesses in 2006 (before Walmart moved in), 2007, and then 2008. The study found that 28 percent of businesses within a four mile radius of the store failed after Walmart took hold. Also, the number of jobs that were lost were equal to those brought in by Walmart (around 300). Overall, though, Smith said finding accurate data on the economic impacts of Walmart is very hard. The government categorizes data into categories based on store type. However, as an example, someone could buy toothpaste from a number of different types of stores so it’s hard to determine how people are shifting their spending to Walmart on specific items.

She said D.C. has a chance to mitigate some of the negative neighborhood impacts of Walmart because it’s requiring the company to focus on groceries. Also, the city is serious about ensuring good urban design. She recommended the district carefully measure the impact of the first few stores before letting others in. Smith says Walmart will need to hand over “transparent data.” To guard against any negative impacts, district policymakers will need to “act quickly to bolster local businesses.” She pointed to new models, such as community cooperative supermarkets, community investors and venture capitalists, and innovative stores that have raised funds by paying in products instead of interest.

I Live on Top of a Walmart

Jay Klug, principal, JBG Rosenfeld Retail, will be building the world’s first mixed-use Walmart development, including hundreds of apartments and condos on top of the actual store. When asked by an audience member if someone spending half a million on a condo is going to want to shop at the Walmart downstairs (or will even want to live above one), he laughed and said “this is something we’ve obviously been thinking quite a lot about giving we are investing millions in this.”

The new Walmart on H street will be “architectually contextual,” and include a relatively small store space (at least for Walmart), with an “energized front.” The energized front includes space for an indoor/outdoor cafe or restaurant, and spots for smaller local stores. There’s a significant glass element and modern design features. The entrance for the condo will be off on another street, away from the heavy foot traffic, which will help further differentiate between the store and apartment complex entrances. In addition, the loading dock, which will be on a level plane, will be in back.

Klug pointed to other successful examples of enlightened big box developments his firm has done, including two developments that mix Whole Foods and condos in North Bethesda, Maryland, and Alexandria, Virginia. He said both those mixed-use big box retail models are doing extremely well. Only time will tell if the Walmarts are as successful in this model. “The one thing I’ve learned is that everyone has an emotional reaction to Walmart.”  

Smith still thinks the Walmart projects could be risky but thought it was good the stores are on the smaller side so another store could be swapped in if it didn’t work out. Tregoning argued the fact that Walmart is “embedded” into these mixed-use developments is a good thing. If these Walmarts do actually offer lots of fresh produce in locations that are food deserts, it may be worthwhile: As she noted, D.C. has some of the highest obesity rates in the country, particularly among children.

Add your thoughts. Is Walmart coming to D.C. a good or bad thing?

Image credit: Rendering of H street Walmart / JBG Rosenfeld

6 thoughts on “Walmart Is Coming to D.C. Is This Good or Bad?

  1. dan maceda 09/15/2011 / 8:48 am

    The focus of this article discusses only the H Street store
    As to H street being a food desert
    The HFFI working group defines a food desert as a low-income census tract where a substantial number or share of residents has low access to a supermarket or large grocery store:
    To qualify as a “low-income community,” a census tract must have either: 1) a poverty rate of 20 percent or higher, OR 2) a median family income at or below 80 percent of the area’s median family income;
    To qualify as a “low-access community,” at least 500 people and/or at least 33 percent of the census tract’s population must reside more than one mile from a supermarket or large grocery store (for rural census tracts, the distance is more than 10 miles).
    Unless I’m mistaken the Safeway at 5th and L NW and the Harris Teeter in NOMA and the Giant to be built at 3rd and H St NE are all less than a mile from the Walmart on H St so just where is the population for this food desert located?

  2. Richard Layman 09/15/2011 / 9:51 am

    +1 Dan Maceda

    Only the H St. store is appropriately urban. Ironically, it is a 100% matter of right use so the DC Office of Planning had no input into the project whatsoever.

    2. The other projects involved limited DC Government review. Despite being pushed to do so, the city did not substantively attempt to improve the projects.

    The Office of Planning was limited in its ability to do so in part because since the city’s elected officials jumped in hard and high early in support of Walmart, therefore reducing the space and ability for negotiation and pushing.

    3. None of the Walmarts, with the possible exception of the one in W7, are located in “food desert areas.” Actually, according to USDA research, only a handful of Census tracts in DC qualify as food deserts. Other commenters discussed the H St. location. The Walmart location in W4 is bracketed by two Safeways, one is 0.5 miles away, the other is 1.6 miles away. (USDA Food Desert Locator)

    4. While it isn’t related to landscape architecture, the plan for the rebuilding of the Safeway 1.6 miles away as a mixed use urban building will be a great project, while the GA Ave. Walmart will be a single use building with a 75 year lease.

    5. To be “fair” to Walmart, the big difference in their philosophy now is (1) a desire to be in center city locations and (2) a willingness to be in mixed use centers (e.g., not just the one on New Jersey Ave., but also in Tyson’s Corner VA, and in the Boston suburbs), (3) even in two story store formats.

    6. But they are agnostic about it. They only respond to the developer’s proposal. If the developer proposes something more traditionally suburban, it meets zoning, and it’s in a location they want, they’ll take it, and put no pressure on the developer to create a truly urban project.

    7. Disclosure: I was the primary author of the community response to the large tract review process for the Georgia Ave. Walmart proposal.

    8. IF YOU THINK IT’S IMPORTANT TO PROVIDE ACTIONABLE INFORMATION TO PEOPLE IN THE FIELD, you really should take down this article or re-write it, with an emphasis that only with enlightened developers (a rare breed) and/or strong design review procedures and guidelines can you obtain reasonably optimal results with Walmart entry into cities.

    P.S. I am shocked you don’t link my blog. I link yours.

  3. George 09/15/2011 / 9:51 am

    I went into the Walmart in Alexandria, and the produce is not that “fresh”. If you are used to shopping elsewhere (anywhere else, really), it will be a disappointment. The WalMart produce is one grade below what even Giant and Safetway offer. And if you are used to shopping at some place like Whole Foods or Harris Teeter, you will find the WalMart produce to be simply disgusting.

    There was no deli counter to speak of at the Walmart in Alexandria. Well there was a counter and one slicer, but there was nobody working and the slicer was covered in plastic. And from a food-safety point of view, you can’t just have one slicer if you are slicing both cheese and meat.

    The Alexandria store has no transit – it is just another huge parking lot type of WalMart. It remains to be seen how WalMart will do in an environment where there is no large surface parking lot, and people either have to walk or take transit to get there.

  4. IMGoph 09/23/2011 / 1:01 pm

    Maggie: No, it’s not, really.

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