Low Prices, High Anxiety: WalMart Comes to Midtown - March 5, 2012

Some fear Walmart’s first Miami store is a goliath that will squash an eclectic, thriving neighborhood. But others like the inexpensive goods.

By CHARLES RABIN
crabin@MiamiHerald.com

Carrie Price, on her way into Target at Midtown Miami to buy a remote control for her television, could easily have been a walking Walmart ad when she learned the world’s biggest retailer had plans to build just down the street.

“Excellent!” Price, 60, practically shouted. “It’s the prices, baby, the prices!”
A block away, Robert Leclerc was straightening up outdoor furniture and touching up Asian gargoyles at his store Living In Art. Just hearing the name Walmart caused him to roll his eyes.

“Just like CocoWalk killed the entire neighborhood in Coconut Grove, Walmart can’t help me, it can only hurt me,” Leclerc said.

Views on the world’s largest retailer, supermarket and employer are about as divergent as the massive inventory that could fill the building at the southern end of Midtown Miami by 2014.

Discussions regarding Walmart usually have very little middle ground: It’s either the behemoth that sucks the life out of nearby small businesses with low wages and unfair labor practices, or the lifeblood of communities reeling from high unemployment and stalled construction.

Entering the inner-city Miami market is part of a growing trend for Walmart, which made a name for itself building in — and appealing to — suburbia. The chain is opening its fourth store in Philadelphia, and recently signed a contract to build 30 Walmarts in the Chicago area.

The Midtown location would be Walmart’s 10th in Miami-Dade, with three stores in unincorporated Miami-Dade, two in Miami Gardens, and one each in Florida City, North Miami Beach, Hialeah and Hialeah Gardens.

Those locations couldn’t differ more from trendy Midtown Miami, a thriving new retail and dining destination mixed with residential towers that is one of the city’s latest success stories.

It is surrounded on the west and south by modest residential communities, in the midst of the emerging Wynwood arts district, which draws thousands to the annual Art Basel show. To the north is the city’s Fashion District. To the east, there are train tracks before hitting Northeast Second Avenue and then Biscayne Boulevard.
Interviews with nearby retailers found both support for and fear about the expected flood of new customers Walmart will attract. Retailers inside Midtown seem a tad nervous, while store owners outside the complex welcome the growth potential.

Melissa Watts, a supervisor at Ross Dress for Less in Midtown, said her store offers fancier brands than Walmart. Still, she said, when Walmart comes to town, everyone should take notice.

“I don’t think anybody’s safe. Everyone shops at Walmart. I shop at Walmart,” she said.

Yet Anis Sur has no worries. The owner of Discount Supermarket a few blocks southeast of the proposed Walmart site believes the retail giant will bring more people to the neighborhood — and he’s ready to carve out his niche.

“That’s good,” he said of the news. “And Walmart won’t sell single beers.”

Veteran real-estate analyst Mike Cannon calls Walmart’s impending move to Miami part of a growing trend, as large retailers chase residents to the urban core and scramble to reconstitute their stores.

“What it’s going to do is create a tremendous amount of [foot] traffic, and that’s good,” he said.

It’s not the first time Walmart has made plans for the rectangular, 4.9-acre parcel at the southern end of Midtown, bounded by Northeast 29th and 31st streets, North Miami Avenue and First Avenue, also known as Midtown Boulevard.

Back in 2005 when cranes and bulldozers began excavating Midtown, which runs to 36th Street on the north end, the retailer proposed a swanky design with a two-story garage. That plan was shot down by then-Commissioner Johnny Winton, who said the outlet’s “image” wasn’t appropriate for Midtown’s plans.

The plot of land has remained empty, surrounded by a six-foot chain-link fence covered with a dark green screen.

The parcel is owned by leasing giant Developers Diversified Realty, known as DDR, which rents or manages most stores in Midtown Miami. The firm did not respond to repeated interview requests. But it has undertaken a traffic study that hints at what the megastore could mean to one of the city’s newest and most vibrant communities.

Walmart entering the Midtown picture would provide the seven-block retail center with a southern anchor to go along with Target, another big retailer, at its north end.

Early plans, according to the traffic study, call for a two-story, 164,525-square-foot store that would sell groceries as well as typical wares, and above-ground parking that could accommodate 650 cars. In addition, there would be ground-floor space for almost 6,000 square feet of specialty retail.

The food market would compete with Target, which also sells groceries but could be undercut by Walmart’s prices. Target declined to comment.

Price-conscious shoppers Jose and Milagros Rivera, two seniors buying blood- pressure medicine recently at Target, said they would not hesitate to switch to Walmart.

“It’s very much cheaper,” Jose said. “That would be excellent.”

Still, Buena Vista resident Wendy Stephan says Walmart is not the type of retail envisioned for Midtown Miami when the public was sold on development of the area.

“I am perfectly happy with the Target for my needs," said Stephan, responding to a query from The Miami Herald. “Walmart in North Miami [Beach] is a really depressing scene."

Joel Soldinger, who also lives nearby, has never been inside a Walmart and wouldn’t go to the new one. That’s despite his giving Walmart credit for its commitment to organic products; it’s the No. 1 organic retailer in North America and buys from local farmers.

“I know other communities have succeeded in keeping Walmart out and I hope we can do the same,” he said.

The project has already generated enough neighborhood opposition that DDR last week withdrew a request to the city seeking zoning modifications along Midtown Boulevard — meant to be the district’s pedestrian-friendly spine — where Walmart trucks would have entered a loading bay and shoppers’ vehicles entered and exited a garage.

An online petition against the project started by activist Grant Stern, president of Morningside Mortgage, has already collected 642 signatures. Midtown Opportunities, an adjacent landowner, is waging a similar fight.

Stern says even worse than the traffic that Walmart would create is the pain in store for local small businesses. Walmart “has a pricing power that no one can match. These retailers, they don’t know what’s coming,” he warned.

Shimon Bokovza, managing partner at Sugarcane Raw Bar Grill, a hot spot at Midtown and the closest establishment to where Walmart would build, calls the retailer’s impending arrival “unfortunate.” He said Walmart’s effect would go well beyond tying up traffic in front of his restaurant.

Bokovza said Walmart would “hurt the local economy by driving out competitors, forcing the rest of the industry to lower wages, halting the area’s further development and eventually costing the taxpayers more money."

To quash some of the concerns, Walmart released a pair of preliminary architectural renderings last week showing a modern two-story concept, with tall windows off set by dark shutters, light-colored bricks, tree-lined streetscapes and an open-air entrance in the existing style of Midtown Miami.

Stephen Restivo, spokesman for the Little Rock, Ark.-based company, said the renderings show the company has become more flexible with its design to better reflect local aesthetics. “It’s a lesson we learned the hard way, in the past,” he said.

Despite the opposition, “We continue to think a Walmart store makes sense for Midtown,” Restivo said. “We want to have a full conversation with folks who live around that area. People will have an opportunity to weigh in.”

He declined to discuss potential changes, but said Walmart expects to file a formal application reflecting its latest plans in the next few weeks.

The giant retailer has become such a phenomenon that books have been written about it. Perhaps the most famous, The Walmart Effect by Palmetto High graduate Charles Fishman, determined that Walmart is so powerful that it forces companies it does business with to send jobs overseas where production costs are lower.

Restivo called concerns that the chain runs local retailers out of business nothing more than “urban myth,” saying Walmart’s “wages and benefits have always been competitive with people we compete with."

He said a store of the size expected for Midtown could mean at least 300 permanent jobs.

Though Restivo would not go into specifics about the Miami location, when asked about design considerations, he also provided an architectural rendering of a hip, 120,000-square-foot Walmart built in Washington, D.C. Its exterior of navy blue and gray tile, and large glass windows, make the building look more like a modern condo than a traditional big-box Walmart, and it blends well with the neighborhood.

Restivo noted that not all Walmarts are supercenters, which the size would suggest is planned for Midtown Miami. Adjusting to local demands, Walmart now has 167 U.S. stores ranging from 30,000 to 60,000 square feet that the company calls “neighborhood markets." Miami officials, challenged by the city’s high unemployment and stalled construction sector, seem more willing to embrace Walmart now than a decade ago.

“At the end of the day, it brings jobs to the community and more people to Midtown,” said Miami Mayor Tomás Regalado. “I’m glad Walmart is investing in Midtown.”

Commissioner Marc Sarnoff, who represents the area, isn’t quite sold on Walmart, saying “it’s basically not what Midtown is about.” Still, he’s willing to hold off judgment. Sarnoff’s main concern is the traffic congestion along Midtown Boulevard.
“As it crystallizes, I’ll know more,” he said.

But nearby small-business owner Diego Castro knows what’s coming, and he can’t wait.
For eight years he has owned AAA Locksmith, in a small strip mall on Northeast Second Avenue just below 36th Street.

Castro said he’s well aware Walmart will have a hardware section, selling some of the very same goods he has in his small store and probably at a lower price.
Still, he said, “If more people come to this area it’s better for my business, and for everyone else’s.”

This article includes comments from members of HeraldSource, part of the Public Insight Network. To learn more about the network or to join, visit MiamiHerald.com/insight.

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