Thursday, April 06, 2006

Let them come

Wal-Mart wants to open stores in blighted urban neighborhoods, and I say, let them. I'm no fan of the megachain's cut-throat business practices and Dickensian employment policies, but I have to think a Wal-Mart, where low-income city residents would have a place to buy groceries, get prescriptions filled and even find a job, is a hell of a lot better than a crumbling, graffiti-covered building or garbage-strewn vacant lot.

Wal-Mart wants to burnish its reputation, and soften opposition, by giving money and other forms of support to businesses in the neighborhoods in which it opens plans to open stores. Good. Inner-city neighborhoods are often starved for private investment. Cities should take whatever Wal-Mart is willing to give.

What city officials must not do is to succumb to the temptation to offer Wal-Mart any kind of subsidy or tax break to entice them to come into urban neighborhoods. Communities across the nation have given the retail giant subsidies and incentives totaling more than $1 billion over the past 20 years, according to at least one study. As I discussed here, government development policies like these are to blame for the loss of our Main Street business districts, not Wal-Mart.

So I, for one, would welcome Wal-Mart into American cities, including Pittsburgh--as long as they are digging into their own wallets, and not reaching, with the help of elected officials, into mine.


Blogger Sean McDaniel said...

Let me say this about Wal-Mart...I hate 'em. Too crowded. Low-end merchandise. And much more. But let me say this, too. W-M doesn't open stores to enhance its reputation. They do it to make money. So if they want to venture where other corporate angel fear to tread, it's because they see an nice payoff there.

And, hell, we can all feel good that W-M is providing jobs where few companies will operate a business —and where white people don't want to work.

Wouldn't it be ironic if W-M proved to be a good soldier in the war on poverty?

As for those subsidies. If there's ever a company you can count on to be around to make that sort of break seem like a good idea, it's W-M. To me this sort of tax break falls into the category of Universal Health Care. You know that plan where my mandated coverage enables the state to provide medical benefits to the poor., which I seem to be doing already (By the way, I noticed that the Mass UHC bill will give guys like me a "modest" reduction in health costs. Oh well, I'd rather be affluent. Really.) Honestly, I don't mind doing that. But why can't my tax dollars be used to provide jobs to those same people? Who knows, that work ethic thing might turn out to be contagious. Or do we think that people won't work for W-M wages when the bling is easier to get in a few deals on the street?

And one last point, the issue here is opening stores in blighted neighborhoods. We probably agree as to what blighted means. So chances are Main Street died in those areas years ago. Which leads to this conclusion, Wal-Mart won't kill mom and pop's hardware store or Mr. Johnson's pharmacy or Bill's butcher shop. Drive through the Hill or Homewood or Allentown or Mt. Oliver or ....well, fill in your own favorite blighted neighborhood...and you'll get the idea.

Okay, who knows how much Home Depot, Whole Foods, Walgreens and the like are transforming East Liberty. Maybe not much. But maybe we have to wait for the verdict on that. And, hey, I love Whole Foods, don't you?

7:04 PM

Blogger Jonathan Potts said...

There are two problems with subsidizing retail development:
1. It is unfair to whatever other businesses may be located nearby, because you are taking money that they pay in taxes and giving it to a potential competitor, and
2. Because you are reducing their financial risk, retailers may enter neighborhoods or markets that lack enough customers to sustain them in the long run. When they close (like Lazarus and Lord & Taylor in Downtown Pittsburgh) then the public's investment is wasted, and even more blight may be created.

In particular, subsidies and tax incentives that are tailored to individual retailers are problematic because you restrict the pool of developers to those with the most political clout, and you limit the diversity that most retail districts need to thrive.

That doesn't mean I would never support tax incentives to jump-start development in blighted neighborhoods. But I'm generally skeptical of those targeted solely at retail, and especially those aimed at one specific retailer, as opposed to incentives that are available to any retailer within a specified area.

11:08 PM

Blogger brian said...

It's interesting...there are some who think that Wal-Mart is some sort of blessing to the poor. The comment above is correct--Wal-Mart won't open a store to help its reputation. It will open store to make money.

As for the increased development in East's a blessing and curse. Home Depot turned out to be a good thing, because first, it created jobs in the community, and second, because folks in the community can actually make use of it. Whole Foods is a mixed blessing. It has created some jobs, but not many folks from the neighborhood are likely shopping there.

East Liberty development is slowly going the way of gentrification rather than true revitalization (and that's fine with the city and the residents of Shadyside). It's great that dining spots are opening up, and that more businesses are moving into the neighborhood. But if that does little more than drive localresidents out (or offer them no benefits) what's the point? The blight will just relocate.

10:57 AM

Blogger Sean McDaniel said...

Jonathan Potts said:
There are two problems with subsidizing retail development:
1. It is unfair to whatever other businesses may be located nearby, because you are taking money that they pay in taxes and giving it to a potential competitor, and
2. Because you are reducing their financial risk, retailers may enter neighborhoods or markets that lack enough customers to sustain them in the long run. When they close (like Lazarus and Lord & Taylor in Downtown Pittsburgh) then the public's investment is wasted, and even more blight may be created.

Okay, number one. Whatever business might exist in those blighted areas probably is hanging on by the skin of their teeth anyway. Chances are the owner of the convenience store that sells individual cigarettes for a dollar is probably making his income on another source. Sure, I know there are some legit shops in those areas, but they're probably on their last legs. As I mentioned earlier, drive through the Hill. Or roll through Homestead. The number of empty storefronts there seems to be about the same. The Waterfront might not have revitalized the Main Street businesses. But it didn't kill them either.

Point Two: I'll stick to my guns as far as Wal-Mart. The corporation doesn't take insane chances. If it opens a store in Mt. Oliver or similiar neighborhood, the risks are calculated and minimal. And comparing W-M in Mt. Oliver to Lazarus Downtown is way off base. Lazarus was already faltering. That was like using Waterford crystal champagne glasses to bail water off the Titantic as it was sinking. And giving money to Lord & Taylor was akin to sending another ship into the Titantic iceberg to see if it could survive the crash.

I'll repeat this again: I don't like the Wal-Mart stores (but I can't pass by a Target). But the corporation doesn't make many mistakes when it opens stores. For all I know the old Murphy's in McKeesport probably put my grandfather's clothing shop out of business when the 5 & 10 opened in 1912. The point? It's all about the survival of the fittest, strongest and smartest in the retail world.

As for Brian's comment about Whole Foods: why does a store have to provide products or services that are affordable to the neighborhood's residents? And for the record, there are at least 3 less expensive Giant Eagles within a 10 minute drive (or bus ride) of Whole Foods. And I don't think that revitalization and rejuvenation are opposing trends. If that were the case, then how can we explain the success of Carson Street and the South Side (or even Bloomfield)? Years ago, East Liberty was one of the toniest neighborhoods in town. Just take a look at the churches, homes and other buidlings there. Poor people didn't worship, shop and live in those places. Maybe it's just a matter of East Liberty's true roots taking hold again. You know, revitalization doesn't always have to be gritty or culturally and economically diverse — because that would make Shadyside a huge failure and I'd have to find a new Apple Store to patronize on my way home from Whole Foods.

Just so you know, I live in Avalon, a part of North Hills where I'll never see a Whole Foods...because the neighborhood can't support it. But, damn, that new Wal-Mart on the Ohio River Boulevard will be popular with most of the folks here.

1:09 PM

Blogger Jonathan Potts said...

Certainly, a lot of the neighborhoods you mention have little retail to offer in the first place. But keep in mind Pittsburgh isn't that big. The opening of Home Depot probably didn't do much good for Rollier's in Shadyside, which closed not too long after.

My second point, like my first, does not apply soley to Wal-Mart. Again, look at Downtown Pittsburgh. I suspect Lazarus never would have opened a store without the financial incentives it received. Same with Lord & Taylor. What good did they do by closing a few short years after they opened?

As for gentrification, it doesn't alarm me the way it does some people--except when it happens primarily as a result of government largesse. There's no reason why a neighborhood should remain the same forever, with the same kinds of stores and residents.

5:38 PM

Blogger brian said...

Okay, number one. Whatever business might exist in those blighted areas probably is hanging on by the skin of their teeth anyway. Chances are the owner of the convenience store that sells individual cigarettes for a dollar is probably making his income on another source. Sure, I know there are some legit shops in those areas, but they're probably on their last legs. As I mentioned earlier, drive through the Hill.

So why doesn't city do more to help these people instead of throwing money at developers and retailers who based outside the city, and, thanks to tax incentives, rarely provide a return on that investment before they close? In truth, it's not survival of the fittest all the time--it's survival for those who can woo the government.

Regarding East Liberty, as a life-long resident of the 15206 zip code (grew up in East Liberty, now live in Morningside), you are correct--it's not always been blighted. Very few neighborhoods retain their character (Morningside, Bloomfield, and the South Side are a few that have) because we, as a society, have lost our sense of place. No one "settles down" anymore--we're always looking for a nicer house, a better job, a better school district. We don't care much for sticking around to try and solve a problem. I'm not advocating that neighborhoods stay the same, but I refuse to advocate wholesale revitalization that doesn't care about the character of the neighborhood.

8:50 PM

Blogger Sean McDaniel said...

Please tell me where i can find the character of East Liberty? Or the Hill? Or Allentown? Or Brighton Heights? Or the West End? Or Homewood? I'm sure the city or state sunk some money in the Kelly/Strayhorn Theater. But the Carnegie Library in Woods Run closed in the past few months after years of declining use. It's time to face the facts, the city that gets talked about on this blog (and others) will never happen again. Because it's only going to be affluent people who want to move into a dilapidated pile of bricks and transform it to their urban oasis, which they'll sell at a hefty profit within 10 years.

No one really wants a heterogeneous neighborhood anymore. Not that we ever did or ever had them. Today, outer suburbs are white, middle to upper class and conservative. The burbs closest to the city might be a little more on the working class and democratic side (though not necessarily liberal). Within the city, neighbors break down less neatly geographically. But the socioeconomic stuff works out to about the same ghettoization (except maye in the crazy Mexican War Streets and Manchester, where demographics can change drastically from door to door). Honeslty, how many white people are moving to Lincoln Larrimar. What I'm saying is this...we want to live around people who are more like us than they are different from us. Regardless of race, religion or stock portfolio.

Long ago, there were German neighborhoods. Italian ones too. If you were Jewish you moved from the Hill to to Squirrel Hill as the city's black population grew. The East Europeans ruled on the South Side and the hilltops overlooking the Mon. And the rich, well, the occupied Oakland and East Liberty and North Side.

So tell me what's changed? That funky coffee shop that only sells free trade beans exists...but I don't think that's where you'll find the assistant night manager from the Get Go sipping a colombian morning roast and nibbling his blueberry pumpkin ginger mango muffin, enjoying some world music from kenya. The sad part is that the greasy spoons I loved as a kid are pretty much gone. They used to be everywhere. But tell me where I can find a damn meatloaf dinner that doesn't have morels, chantrelles or bits and pieces of Tommy James and the Shondells in it.

Whatever PIttsburgh you remember from the past is gone. We all let it go. Don't blame the government. We wanted mega bookstores. And new California cuisine dining spots. And specialty pizzarias. We wanted food co-ops and organic groceries. We actually wanted the Gap and A & F (instead of the A & P). We yearned for the Apple store and WiFi coffee shops. Well, we got em and something had to go. I think there's some law of physics concerning two shops trying to occupy the same retail space.

As for the Shadyside hardware store. Yeah, it's a damn shame it's gone. But he couldn't meet customer demand and the customers couldn't be bothered to pick up lumber at the Home Depot and plumbing parts at Rolliers. And just so everyone knows, I'm self employed and I'm so fiercely protective of my market share that I won't even mention here what I do or who I work for. And yes I've lost jobs to people who seemed to get unfair breaks. On the other hand, I use connections others don't have. And I've pried longtime clients away from competitors. To be honest, I'll take advantage of any honest and legal break I can get.

And I'll never be convinced that Wal-Mart and Lazarus/Lord and Taylor's are comparable on any level. None. Zip.

And no slight to the blog owner, because I think he's fair, honest and intelligent, but I still find it amusing that his employer doesn't contribute its fair share to the city tax coffers and receives plenty of money/breaks from nearly every branch of govenment that exists on this planet.

Come on guys. Is it that bad being a white guy?

And, Brian, about giving tax incentives to existing businesses in blighted areas, sure. If the companies are legit and employ others. Otherwise, I'll be lining up for my tax break too. Because I don't get many of them.

Hey, anyone got thoughts about the Universal Health Care deal in Massachusetts? My favorite part of a Boston Herald article was the mention that people already paying for their own health insurance will notice modest reductions. So, if I read that right, my $1,100 a month would still be footing the bill for someone else if PA ever goes for UHC. And no mention about keeping costs under control or putting a lid on insurance provider profits, especially since Big Oil is the real villian behind everything. Seriously, I don't spend anywhere near $12,000 a year on gas. And I get a lot more mileage out of my fuelperks purchases than I do my health insurance. Hell, even if I paid the out of pocket costs for my Viagra I'd still hae a smile on my face compared to my health care premiums —which no one pays but me.

As the Talking Heads said...same as it ever was.

And believe it or not, I'm still willing to go for UHC and give Wal-Mart a tax break to open in whatever blighted neighborhood it might chose in our town. Does anyone really think it would steal business away from Victoria's Secret on Walnut. And I could be wrong, but SouthSide Works and Carson Street seem to be co-existing well. In fact, more storefronts between the Birmingham Bridge and SSW seem to welcoming new businesses. And I know Damian Soffer got some nice breaks.

And man, I bet Andrew Carnegie knew how to work a tax dodge.

Even after changes, things are more or less the same. Isn't it ironic?

12:56 AM

Blogger Jonathan Potts said...

The point is not to re-create the past, but to avoid repeating past mistakes. Neighborhoods like East Liberty and the Hill District did have a very distinctive character at one time. The Hill was arguably the most important center of African-American culture outside of Harlem. And while its decline may have begun before the government wrecking balls arrived, it was "urban renewal" that finally did in the Hill, as well as East Liberty.

The mentality that gutted the Hill in favor of the Civic Arena, and gave us the urban wastelands of Gateway Center and Point State Park, is the same mentality that would dole out millions of dollars in subsidies and incentives for Downtown department stores and luxury condos. It's the same mentality that gives subsidizes so a Shop 'n Save can open in East Liberty across the street from a subsidized Giant Eagle and near a subsidized Whole Foods.

I realize you think you are being clever by throwing my support of universal health care back in my face everytime I argue against another form of government intervention, but only an ideologue believes that every problem is the same, or requires the same solution.

1:30 PM

Blogger Sean McDaniel said...

There's no attempt at being clever. That point about UHC is that it is government intervention and it does nothing to address the price of health care being very very costly. My point is that if I'm required to buy it, then I have to dedicate a certain and large percentage of my income to health care —and just like employers who cry about health care eating into profits, that cost hits me hard too. If I choose to take my chances without it, way should the government tell me I shouldn't? Hell, if I owned a motorcycle I could ride without a helmet.

By the way, back to that shadyside hardware store...I live in Avalon, within 10 minutes driving distance of two privately owned hardware stores that have been around forever. Home Depot opened a store in the area 3-5 years ago...and the other two stores are still going strong. My guess is that Rolliers was pushed out by Ann Taylor, the Gap, the Apple Store, coffee shops, and the other chains that had nothing to do with hardware.

As for what the city did to the Hill and Northside, I agree. They tried to re-engineer those neighborhoods. I don't think the Wal Mart deal is the same. There are no bulldozers flattening homes or building highways that split neighborhoods in half.

All problems aren't the same. You know that and so do I. But there never seems to be any solutions offered here...just naysaying, mostly. And yes i remember your reasoning for that.

By the way, Pt. St. Park is a wasteland, I agree. But at least it's green now. Back in the day it was a cluster of rundown warehouses and and some substandard housing. Even the blockhouse was a derelict.

The Hill is a different matter. And a disaster and tragedy. Should have never been allowed to happen. But all the neighborhoods around here that suffered that fate tended to be mostly black — and that's an entirely different story. Funny how most of our projects got built on isolated hills.

6:31 PM

Blogger Jonathan Barnes said...

If I understand correctly, the Woods Run branch of the Carnegie Library actually is undergoing an expanision, not closing.

7:14 PM

Blogger brian said...

Two things...First, I'm not entirely sure that Home Depot pushed Rollier's out. The family still owns the building (and likely making a pretty decent amount of money from the jeweler and the apartment and office rentals on the second and third floors).

Second, why the is blind march of capitalism such a good thing? Yes, yes people want their Apple stores, their Whole Foods (another aside, lumping the East End food co-op--a completely member-owned organization--with big box retailers is silly), and their Gaps. People also sit around in front the TV all day and night and take it whatever Hollywood gives them. These people only care about consumption, no matter the cost. Our culture needs people who care about the character of neighborhoods and communities. We're becoming a society of nomads who chase the best jobs and housing, and we care little about what that means to our lives.

And before someone's panties get in a bunch, I'm not suggesting this is up to the government. In fact, it's not--it's up to us to be reactionary radicals.

8:38 PM

Blogger Sean McDaniel said...

Yes, the Woods Run library is expanding. I read that in the PG today. That's good news. When I saw the wrecking crews knocking down some walls I assumed the worst. So that's the good news.

As for the relentless march of capitalism, Pittsburgh was the grand marshal of that parade for decades. Take a look around at the names of some of the buildings around here...the Oliver Building, the Gulf Building (or whatever they call it now), an entire town called Carnegie. At one point, PIttsburgh supposedly had one of the highest concentrations of millionaires in the world. That didn't happen becausea they pinched pennies and clipped coupous out of the local newspapers. Once capitalism marched out of Pittsburgh, the decline started. I wouldn't mind hearing some footsteps here again. And Wal-Mart isn't even a start. This area used to be leader in the steel industry, the glass industry and the cork industry (when cork was king). Today? We've been dethroned in every way possible.

Okay, the east end food co-op isn't the same as Whole Foods. Whole Foods is just a way for people with more disposable income to assuage their consciences about buying organic stuff in pretty surroundings. (and yes i shop there frequently). I used to shop at the co-op but felt terribly out of place (the management could teach the help about customer service) and was always disappointed by the limitied selection.

Brian, we've always been a society of nomads. Othewise, I'd still be in Germany or Ireland of Italy (yeah, and i know some wish I'd make a hasty return). But remember that Pittsburgh was once the western frontier...until the earlier settlers saw greener (and flatter) pastures in Ohio and beyond. The only reason we stopped moving was that the restless spirits ran smack up against the Pacific Ocean.

The world keeps turning. And capitalism keeps marching. We all need to keep pace. I'm not saying that we have fall in line without question. And a Luddite approach isn't the answer either. But there is a middle ground. And it's different for all of us.

9:46 AM


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