Jul 112011

Owen Courrèges

A Wal-Mart in the French Quarter. There, I said it.

Don’t fret, dear readers. To my knowledge, Wal-Mart has no designs on the French Quarter, and perhaps never will. In fact, it stands to reason that Wal-Mart is content with its hard-fought Tchoupitoulas location in the Lower Garden District. Honestly, why would Wal-Mart pick such a fight?

Furthermore, Wal-Marts are gargantuan department stores. The average size of a Wal-Mart store, according to their website, is 108,000 square feet. It would be virtually impossible to fit one in the Quarter unless you razed an entire city block, and the National Historic Landmarks Commission would probably have something to say about that.

So why am I talking about a Wal-Mart in the Quarter? Why even make such a provocative hypothetical?

The answer lies in recent developments. In mid-January of this year, Wal-Mart opened up a 3,500 square foot store on the campus of the University of Arkansas in Fayetteville. This miniature Wal-Mart has a full-service pharmacy as well as general merchandise. It’s more akin to a chain pharmacy than it is to a Wal-Mart Supercenter.

That’s not all. Just this May, Wal-Mart announced that the Fayetteville campus Wal-Mart was no one-shot deal, and that it now plans to open additional Wal-Mart campus locations. Moreover, Wal-Mart announced that it is already building its first three “Wal-Mart Express Stores,” smaller-scale department stores designed to compete with dollar stores and other mid-sized general retailers. Wal-Mart plans to open as many of 40 of these smaller stores by the end of this year.

“Our new Wal-Mart Express stores will offer a great assortment at great prices in roughly 15,000 square feet,” says David Tovar, Vice President of Communications for Wal-Mart U.S. “The merchandise mix will include a strong emphasis on groceries as well as a more limited selection of general merchandise.”

Wal-Mart has already opened up smaller locations internationally, but these efforts represent its first concerted effort to build them stateside.

For the sake of comparison, 15,000 square feet – the target size for the new Wal-Mart express stores – is very similar to the average size of a Walgreens. According to Walgreens’ website, their average store size is only slightly less, at 14,500 square feet. Walgreens, it should be noted, already has one location inside of the Quarter, plus its iconic location just off the Quarter on Canal Street.

See where I’m going with this? The idea of a Wal-Mart in the French Quarter is sounding somewhat less far-fetched given Wal-Mart’s evolving business model.

The real question then becomes whether there would be any legitimate basis for opposing a Wal-Mart in the French Quarter. After all, the Quarter already tolerates chain stores. The city could not, as a strictly legal matter, discriminate against Wal-Mart simply for being Wal-Mart, regardless of the ire that brand generates in some quarters.

Furthermore, we should be asking if the idea of a Wal-Mart in the Quarter is really that offensive. If Wal-Mart complied with all architectural and zoning restrictions, worked with neighbors and otherwise made every effort to accommodate all parties, would it really be such an atrocity if they opened up a small store in the Quarter? Once the initial shock of the notion of a Wal-Mart in moving into the French Quarter wears off, it’s apparent that the real issues are about aesthetics and land use. Those are matters susceptible to compromise.

Again, this is all a hypothetical. Wal-Mart will still probably never move into the Quarter. However, Wal-Mart’s strategy suggests that it is attempting to infiltrate new markets. Some have hypothesized that Wal-Mart may attempt to open up smaller stores in cities presently without a Wal-Mart, such as New York City. If not in the Quarter, these issues will be played out somewhere else, and soon.

But fear not, dear readers. There is no Wal-Mart in the Quarter… Yet.

Owen Courrèges, a New Orleans attorney and resident of the Garden District, offers his opinions for UptownMessenger.com on Mondays. He has previously written for the Reason Public Policy Foundation.

  10 Responses to “Owen Courrèges: The Vieux Carré Wal-Mart?”

  1. There are 2 Walgreens in the Quarter. One on Decatur and one on Royal

  2. Honestly, I suppose it comes from the fact that I came here from somewhere else, but I just don’t see why we can’t allow a few national stores to grace the Parish. After all, more sales tax revenue (theoretically) means less tax burden via property tax for residents. Many other historic places (Charleston SC, for example) have national retail and the local market co-existing. I think retailers would be open to having conforming signage, etc.

    This new urban model is a smart move by these retailers as trends show that people are leaving the suburbs and returning to city centers. Of course, most people want at least the bare bones comforts of suburbia – mid priced retail and thoughtfully curated discount stores so they can have the best of both worlds. I think Hazelnut is charming and all, but I only have so much need for a $598 side table.

    Owen, another interesting phenomenon is the pop-up store (and restaurants – we have a couple in town). Short term leasing of available retail space. It’s an interesting proposition. One of the primary issue with Orleans is that we only seem to have retail tailored to the “haves” (Magazine boutiques) and the “have-nots” (dollar stores). It’s your mid-range customer who is generally underserved and desires an outlet for their sales tax revenue.

    Some days I feel like a stranger in a strange land (and please before anyone jumps down my throat about me hating New Orleans by suggesting that we embrace national retailers, let me say, it’s because I genuinely want to see this city thrive that I suggest such heresy! You need a solid, diversified tax base – and competent leadership, but that has little to do with WalMart express!)

    • It’s your mid-range customer who is generally underserved and desires an outlet for their sales tax revenue.

      Exactly. This is especially true in areas that desperately need retail tenants. I would love to see a Target or a JC Penny open up in some of the old department store space on Canal Street. Lord knows, there’s plenty of underused real estate already zoned major retail on Carrollton Avenue. Tulane Avenue in Mid-City also has some property that could handle some deep pocket investments. And we can’t forget the desperate need for a commercial hub in New Orleans East.

  3. Asked and answered, your honor:

    The real question then becomes whether there would be any legitimate basis for opposing a Wal-Mart in the French Quarter

    Not If Wal-Mart complied with all architectural and zoning restrictions.

    The biggest problem I have with a Wal-Mart anywhere are the subsidies local governments usually have to grant the retailer to locate somewhere. I watched as Wal-Mart left one previous expensively subsidized giant empty box on the west side of Athens-Clarke County, Georgia because ACC wouldn’t pony up the subsidies required so the retailer could build a newer, bigger giant box further out the west side of town (they’d already got all they wanted to build on the eastside). That store ended up moving across the creek into Oconee County, Georgia, where local taxpayers built them a whole new shopping center in a prime retail location on Atlanta Highway.

    But if they want to move a smaller shop into the Quarter and follow all the rules and pay the requisite fees and taxes, they are more than welcome to add to the tax base here. Thing is – it is the French Quarter. They’re going to make their money because it is a desirable place to do business. NOLA shouldn’t offer them any tax breaks or subsidies to open shop there.

    • Wal-Mart does not typically demand subsidies in major cities.

      Since the “Express” stores are designed to serve dense neighborhoods, with many customers entering/exiting on foot, Wal-Mart can’t threaten to move to a nearby town – that completely defeats the purpose of the store. That means Wal-Mart has no leverage to demand a subsidy.

      Now, there’s a different situation for supercenters… people usually drive to supercenters, so Wal-Mart can easily pit adjacent cities and towns against each other, and expect their customers to drive to the store no matter where it’s built.

      • That means Wal-Mart has no leverage to demand a subsidy.

        While I think that, and I really hope you’re right, I’ve seen them find leverage even where none should exist. There are enough politicians and developers who would be desperate to locate an “Express” Wal-Mart in the Quarter or the CBD and take care of some real-estate interest with deep pockets, after all.

  4. C. Pat from Georgia,

    I wholeheartedly agree with you re: tax incentives/subsidies for building a corporate entity a profit center.

    One thing that it usually at the heart of these WalMart/local government struggles is traffic improvement – with scaled back urban models I don’t think you’d have as much tension. Although…parking…I guess that’s the urban equivalent. 🙂 Ask the folks who built Whole Foods and neighbors how the war over limiting parking worked out for them.

    • I can’t remember off the top of my head how many millions in infrastructure improvement Wal-Mart was demanding for their West Athens SuperDuperCenter, but it was significant. For a city that had already doubled the traffic capacity for their UltraSuperCenter on the other side of town, I was glad they said ‘no’ and let Oconee drop some millions on asphalt.

      Thing about it: the area they moved to in Oconee was zoned for retail, and would have developed into highly lucrative commercial property anyway – it sits at the intersection of Atlanta Highway and the Athens Loop. Wally world should have paid Oconee for the rights to locate there, and could have been charged a user fee to upgrade the roads and stop lights.

      What always drove me crazy was the “pro-business” crowd, often the same “small government/less government spending” crowd, that happily ignored the hidden costs of such developments to the county.

      You’re absolutely right about the urban equivalent being parking, though. But I’m one of those crazy “allow less parking” or “charge more for parking” types, especially in dense urban environments. I prefer encouraging walkability, transit, and bikes every time, and I hate driving to Whole Foods when I could bike to Rouse’s or Canseco’s.

      Though you know what would alleviate some of the parking problems at the Uptown Whole Foods? Opening a Trader Joe’s in Mid-City! 🙂

      • Oh, I hear you there. I just got an air drop of non-perishable Trader Joe’s items from my dad 🙂

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