Prescott puts new Wal-Mart Supercenter on fast track
PRESCOTT –Wal-Mart got the go-ahead this week to build a large new supercenter in Prescott, despite the pleas from about a dozen area residents to send the giant retailer packing.
The Prescott City Council voted 6-1 Tuesday to approve a development agreement with Wal-Mart Stores, Inc., which sets out the terms for a new store at the corner of Highway 69 and Prescott Lakes Parkway, within Prescott's city limits.
The agreement obligates the city to a $6 million reimbursement of sales tax to the company over the next eight to 12 years. The council approved the agreement with an emergency clause, which makes it effective immediately.
More than 100 people – many of whom were employees of local supermarkets – packed the Prescott City Council meeting to comment on the proposal for the new store.
Although the deal got some support from the audience, most of the people who spoke vehemently opposed the city's plans to reimburse Wal-Mart for some of its costs for relocating to the Prescott location.
Councilman Dick Cooper set the tone for the discussion, when he asked why a corporation the size of Wal-Mart would need the financial help of a small community such as Prescott.
"One of the arguments people have made is Wal-Mart is the largest corporation in the world; why is it coming to little Prescott, asking for help?" Cooper asked.
That question generated uproarious applause from the audience.
Economic Development Coordinator Greg Fister said the $6 million reimbursement package was an attempt by the city to match a deal that Wal-Mart probably would get from Bill Grace, developer of the Frontier Village Shopping Center on the Yavapai Prescott Indian Reservation, where the current Wal-Mart is located.
Fister said the competition to get the supercenter was stiff, and city officials decided to try to come up with a deal to match that competition.
The question city officials asked themselves, Fister said, was what would benefit the residents and taxpayers of Prescott more – to have Wal-Mart within its city limits, or to have the store outside Prescott city limits?
But members of the audience questioned why the community would want a Wal-Mart Supercenter at all. They maintained that Supercenters, which sell groceries along with other merchandise, bring unfair competition to other grocery stores.
In emotional appeals to the council, local residents asked the council to take a stand to keep a Wal-Mart Supercenter out of the area.
Gary Miller, for instance, maintained that Wal-Mart is "notorious for ruining communities. They are unfair competition, because they pay lower wages."
Miller added that the Wal-Mart Supercenter would cut into the business of other supermarkets. That, in turn, could force stores to shut down.
"If they go on the Indian reservation, that's the way it is," Miller said. "It's not a total loss. What would be a total loss would be to lose a Fry's or a Safeway."
Safeway employee Julie Smith agreed. She maintained that Wal-Mart wages do not compare with those that the supermarkets pay. "The people who work at Wal-Mart can't afford to live in this town," she said.
But Mayor Sam Steiger repeated several times that the local grocery stores will face the same plight if a Wal-Mart Supercenter locates in Prescott or somewhere else in the area. "The impact would be the same to the grocery stores" regardless of where the supercenter locates, Steiger said.
He and other city officials maintained that Wal-Mart is intent on building a supercenter somewhere in the Prescott area. The question centered on where it would be, they said.
By locating in Prescott, Steiger said, the store would be paying sales tax to the city. And local residents would not have anything to say about the matter if the store locates on the reservation, he added.
"If you think you can impact the reservation's decision, you're being misled," Steiger said.
But Miller and others in the audience questioned the need for Prescott to subsidize the move by offering the store a $6 million reimbursement.
Fister explained that the city based the reimbursement on the level of the store's performance. The money would come from the sales tax that Wal-Mart generates. For the first four years after the store opens, the city would pay Wal-Mart 90 percent of the amount the store generates in sales tax for Prescott's general fund. That amount would involve only the 1-percent sales tax that goes into the city's general fund. The 1-percent tax that goes to street improvements and open space purchases would not be part of the reimbursement equation.
After four years, Wal-Mart would get 85 percent of the sales tax it generates for the city's general fund. That would continue until the amount reaches the $6 million cap. Based on sales tax projections, it could take the city anywhere from eight years to 12 years to fulfill the reimbursement obligations.
Although many of the local supermarket employees opposed the Wal-Mart Supercenter, Bob Walker from Bashas' questioned the wisdom of such a stand. "Nobody can push them out," Walker said. "The thought that anybody can boycott Wal-Mart is naive."
And even though the Wal-Mart Supercenter will be competition for his store, Walker said, "Bring it on."
Chuck Bell, a long-time Prescott resident, compared the opposition to the supercenter to the opposition that Wal-Mart faced in Prescott in the early 1990s. The company ultimately decided to locate on the reservation.
"We cannot keep Wal-Mart out of this area," Bell said. "We can keep them out of city limits, but I don't see any advantages to that. The fact is Wal-Mart is already here. It is already taking tax dollars away from us out in its present spot."
Cooper and a number of the audience members voiced opposition to the council's use of the emergency clause. Cooper said the city usually allows more time for public review before the council makes a decision.
Fister said the city decided to use the emergency clause to allow Wal-Mart to move quickly on its contract for dirt work at the Highway 69 site. And, he said, waiting any longer would give other areas an opportunity to make a counter-offer to Prescott's deal.
City Attorney John Moffitt said council approval of the development agreement this week would make the deal binding for both sides. Cooper was the only council member to vote against the motion to approve the agreement.