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Outlook 2013: Walmart impact a double-edged sword

When the Walmart SuperCenter in East Albany opened its doors in May 2011, there was a crowd waiting to get in. The store has brought some new businesses to the outparcels near it, but its impact has also hurt competitors such as the Winn-Dixie on Sylvester Road that is closing. (Outlook 2013)

When the Walmart SuperCenter in East Albany opened its doors in May 2011, there was a crowd waiting to get in. The store has brought some new businesses to the outparcels near it, but its impact has also hurt competitors such as the Winn-Dixie on Sylvester Road that is closing. (Outlook 2013)

ALBANY, Ga. — When a new Walmart opened its doors in May 2011, it was big news for folks in East Albany.

It was, by many accounts, the single biggest retail development in that part of the city in decades. Beyond that, it put people to work and was set to generate significant sales tax revenues for the city and county governments during a time when the coffers were bare.

Almost two years in, The Herald has taken a look at the East Albany Walmart’s impact on business both in that part of the city and beyond, partly to determine if it has lived up to the hype that elected leaders touted and what negative impact, if any, it has wrought on the community.

The Herald reached out to Walmart seeking comment and information on Store No. 5797 in East Albany. There was no response.

The most logical way to look at Walmart’s impact is to track the amount of sales tax the retail giant has paid since it opened.

Walmart closely guards information on its stores, especially any information as to how much money the stores are grossing. And the state department of revenue is equally as cryptic when it comes to sales tax proceeds, only divulging total amounts of sales tax revenues to cities and counties each month, never including information on where the money is collected.

So to get information on Walmart’s impact from a dollar-figure standpoint, The Herald had to turn to the local governments themselves. And since the city of Albany gets the lion’s share of sales taxes from the store, its staff was asked the question.

Albany Finance Director Kris Newton said measuring the impact of a particular business can be problematic because of the lack of transparency with the state department of revenue. However, comparing sales tax figures before Walmart opened with numbers after can offer at least a vague picture of how the store is doing.

The city operates on a fiscal year that runs from July 1 of one year through June 30 of the next. So when Walmart opened in May of 2011, it did so at the very end of Fiscal Year 2011. According to stats provided by Newton, the city collected a total of $8.8 million in FY 2011.

That figure was down from $9.9 million the previous fiscal year.

In its first full fiscal year of operation, the Walmart store helped elevate sales tax contributions to the city, which ended FY 2012 at $10.1 million.

Through January of FY 2013, Newton says the city has received $10.3 million.

“It’s hard to say how much of that was Walmart and how much of that may be attributable to other things like our economy recovering from the recession because we don’t get specific business sales tax figures from the state. But I would imagine a good portion of that increase was because of Walmart,” Newton said.

There are other data to support that as well.

The city’s gerrymandered Tax Allocation District — a tax district approved by voters whose stated purpose is to aid in downtown development by utilizing any increased property taxes paid by property owners whose property within the TAD increases in value — has grown tremendously since construction on the Walmart store started.

The Walmart store site in East Albany has served as the anchor for the TAD, and the store, as planned, has served as the engine that has jump-started the district.

In FY 2009, the TAD had zero dollars, according to numbers from the city’s Finance office. In FY 2010, when the site was being cleared and construction first began, the increasing value of the land bumped the TAD up to $6,880.

One year later, the nearly-completed store was re-assessed and, again, went up in value, adding $20,957 to the TAD. By the end of FY 2012, that $20,957 total had jumped to $101,133, and through January of this year, another $181,769 has been added to the TAD.

“Not all of that is Walmart, because there have been some investments in the TAD that have increased its totals, but most of it is,” Newton said.

Some of those TAD figures also reflect the development of the outparcels that came with the Walmart development. Those establishments, which include other retail shops and restaurants in the Walmart complex off Cordele Road, also bumped up the property tax assessments in the area, contributing to the increase in the TAD funding.

But while the bump in sales tax and TAD funding is nice for local government, Walmart’s arrival hasn’t been all bliss for East Albany.

As typically happens when the retail giant settles into a neighborhood, some long-established businesses often struggle to compete and many are forced to scale down operations or close altogether. That is presumably what happened to Winn-Dixie, which announced in January that it would close stores on Oakridge Drive and on Sylvester Road.

The Sylvester Road store is in close proximity to the Walmart location.

“Business conditions occasionally force companies like ours to make tough strategic decisions. The decision has been made to close stores 120 and 172 in Albany, on or before March 5,” Ronald Cuyler, a Winn-Dixie spokesman told The Herald in January.

Cuyler didn’t say what “business conditions” played a role in the decision to shutter the two stores, but one would imagine that Walmart likely factored into the conversation.

Even closer, Harvey's Grocery store has managed to keep its doors opened, while other, smaller stores in the area have moved away or closed altogether.

Comments

FryarTuk 1 year, 5 months ago

Wal-Mart takes money, jobs and quality of life back with them to China on their purchasing trips.

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erock 1 year, 5 months ago

Well hey Dick Tracey. Where'd you park your squad car?

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