Norwich Bulletin, CT
05-06-07
Retailer transforms Eastern Connecticut shopping
y JULIE A. VARUGHESE
Norwich Bulletin
With a bedridden wife who requires constant care, Edward Fain has little time to
run errands or shop for groceries.
But Fain, who lives in Ledyard, manages to visit the Wal-Mart Supercenter in
Lisbon once a week to buy groceries, household products and items for his car.
Name it, he buys it here.
"With me, it's the (most convenient) place I can go and the closest place," said
Fain, 80.
For better or worse, Wal-Mart, the Bentonville, Ark.-based business, has
changed the face and the way of life in Eastern Connecticut. The region's six
Wal-Mart stores have provided one-stop shopping convenience, contributed
more than $1 million in tax revenue to local towns, created 2,000 jobs and
donated about $2.5 million to local organizations.
And for many Eastern Connecticut residents, who work third shift at the casinos,
having Wal-Mart open 24 hours helps.
The impact of taxes paid by these Wal-Mart stores also has been a boon for
towns struggling to meet residents' needs while receiving little state aid to pay for
education.
In Lisbon, which designated Route 12 as its commercial corridor, Wal-Mart paid
$299,792.13 in motor vehicle, personal and real estate taxes last year. That is
0.79 of a mill in the town budget.
Board of Finance Chairman Michael Zelasky said after spending about $500,000
to pay off bonding for the sewer-line connections to Route 12 and the upgrades
to Jewett City's sewer plant to accommodate commercial development in town,
Wal-Mart's impact is small.
"(Lisbon Landing) definitely helps the town financially, but people have this false
illusion that big-box developments are going to solve tax (problems)," he said.
Zelasky said unless a huge development, such as Utopia's terminated $1.6 billion
development deal comes along, most retail strips are "small game."
Fred Carstensen, director of the Connecticut Center for Economic Analysis at the
University of Connecticut, echoed Zelasky.
Fails to create jobs
He said retail development cannot be considered economic development,
because it does not create more net jobs and usually takes business away from
existing stores.
But retail development can be the result of real economic development, such as
the addition of Pfizer and the region's two Indian casinos, because those
businesses created jobs that did not exist before.
When people move into the area for those jobs, they need services and places to
shop, Carstensen said.
"Retail is the tail of the economic dog," he said. "It's just not the driver."
Net loss for towns
Carstensen said studies show for every job created at a Wal-Mart store, 1.2 net
jobs are eliminated, because Wal-Mart uses fewer employees and has lower
overhead costs. He said studies conducted on the impact of Wal-Mart in New
Hampshire and Ohio show the introduction of a Wal-Mart costs municipalities
more in the long run.
Kenneth Stone, an Iowa State University professor, published a report
showing how the introduction of Wal-Mart into a town coincides with an up to 47
percent decrease in the number of retail stores after 10 years.
The former Caldor and Ames discount chains closed in 1999 and 2002,
respectively. Their stores in Norwich closed several years ago.
Yet, Carstensen said, towns and cities invite retail developments because they
are the easiest to obtain.
Nothing new
Tony Sheridan, president of the Chamber of Commerce of Eastern Connecticut,
said although small businesses may be run out of town when a Wal-Mart moves
in, that isn't a new phenomenon.
"That's been going on for generations," he said.
Local leaders said they couldn't tell whether there was a connection between
Wal-Mart coming to town and the other discount stores leaving.
The Wal-Mart store in Norwich paid $122,000 in taxes last year, said City
Manager Bob Zarnetske.
That amount is equivalent to about half of the city's economic development
budget. This budget funds the Norwich Now! marketing campaign, among other
items.
But Zarnetske said the city doesn't measure how residents' quality of life has
been affected through unemployment, and the impact of Wal-Mart on the
minimum wage and health care.
"Assessing the impact is tough," he said.
Norwich Mayor Ben Lathrop said he welcomes the shopping venue Wal-Mart has
provided the city, but he believes small businesses are the heart of any city's
business district.
"Our great nation was made by Mom-and-Pops," he said. "We've had the advent
of malls. Now downtowns are starting to come back in."
More convenient
Marie Breneman of Voluntown said she shops at the Wal-Mart Supercenter in
Lisbon, partly because the Better Value grocery store in her town closed last
year.
Breneman shopped in Rhode Island before Wal-Mart opened.
"It's all about convenience, unfortunately," she said, as she loaded shopping
bags into her car while speaking to her daughter, Christina, 4.
In Putnam, the presence of Wal-Mart has lured shoppers to the town's wellknown antiques district, said Town Administrator Douglas Cutler.
"Any traffic that's generated is basically a positive," he said. The Putnam WalMart opened in 1995 and paid $84,196.48 in taxes to the town in 2006.
In recent years, local Wal-Marts also have been recognized for their charitable
donations to local organizations.
In 2006, Wal-Mart stores and Sam's Club gave $2.5 million in cash and in-kind
donations to local causes and organizations in the communities they serve in
Connecticut, and through money raised through local stores and clubs.
Charitable contributor
Betty Baillargeon, vice president of resource development for United Way of
Southeastern Connecticut, said local Wal-Mart store employees and the
company contributed $43,872 in 2006, which ranks it high among retail
contributors. But the retail sector does not contribute the most to United Way,
she said, because it tends to pay lower wages.
"In general, Wal-Mart is doing a great job," she said.
United Way is a foundation supporting 37 local health and human services
organizations, including United Community & Family Services in Norwich and
New London.
Lori Rygielski, coordinator of volunteer services and manager of the UCFS's
Helping Hands Thrift Shop, said most of Wal-Mart's donations come in the form
of much-needed items, such as diapers and clothes.
"They are the only ones that donate a significant amount," she said, when asked
how Wal-Mart compares to other corporate donors.
Despite all the benefits to communities, Wal-Mart's reputation has been sullied by
lawsuits alleging it discriminates against women and resists paying overtime.
Sheridan said Wal-Mart has developed a reputation as a good citizen locally
through its work with the Tommy Toy Fund and the chamber's holiday gala.
Sheridan said there always will be ups and downs with economic development.
"We can't have it both ways: We can't have growth and jobs and not have
development," he said. "That's how we survive as a society."
Reach Julie A. Varughese at 425-4217 or jvarughese@norwichbulletin.com