Point Austin: Conflict of Interest

Wal-Mart has indeed attained a scale that puts it in a category all its own, and there's no question that it is leading a race to the bottom. But others are running that race too. ... It would be more accurate to view Wal-Mart not as a bad apple, but as the crowning achievement of an economic and political system that has greatly enlarged the power of global corporations and trampled core American values – namely small business, community, local democracy and work.

– Stacy Mitchell, author of Big-Box Swindle: The True Cost of Mega-Retailers and the Fight for America's Independent Businesses

By the time most of you read this, the common public sentiment on Wal-Mart's proposed invasion of the near-north side will have been heard loud and clear at City Council today (Thursday), as it has been reverberating through the neighboring streets for the past few weeks. A couple of council members, most prominently Brewster McCracken, have been making stentorian noises that they're going to do something to stop the Bentonville Behemoth, but at this writing it's very unclear what that something might be. City staff – in the person of Assistant City Manager Laura Huffman, pinch-hitting for her recused boss Toby Futrell – supplied a memo last week (see "Beside the Point," p.18) indicating that while the notice of the development given to the neighborhoods was in fact defective (lacking required direction on how to become an "interested party"), the city's lapse would be insufficient to derail the applicant's (developer Lincoln Property Co.) site plan and Wal-Mart's 219,000-square-foot Supercenter. Some 3,500 instant petition signatures from the immediate Northcross neighbors notwithstanding, Austin's supposedly too-public process – regularly excoriated by the developers and their editorial mouthpieces at the Statesman – seems to have once again missed the boat, or at least the site plan.

The result is that several thousand citizens directly affected by one corporate property owner's greed and indifference have no recourse but to shout imprecations at elected officials, while the city staff shrugs timorously and declares, "There's nothing we can do." That should hardly be the last word, and the Northcross neighbors are to be roundly applauded for refusing to accept it. If a Dallas developer and a transnational juggernaut can impose a project this massive and disruptive in the midst of several established, residential neighborhoods, without so much as a public-hearing process to fully address its implications and consequences, then what good is a city government? Perhaps we should send the sales-tax receipts directly to Dallas or Bentonville and eliminate the middlemen?

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The Ghost of Christmas Future

We don't yet know what effect an aroused citizenry will have on the Lincoln/Wal-Mart plan for Northcross. But we certainly know, alas, what will happen if the opposition movement fails, and the Wal-Mart faux-"new urban" Supercenter is duly installed in one of Austin's most stable neighborhoods. I asked Stacy Mitchell, senior researcher at the Institute for Local Self-Reliance and the author of Big-Box Swindle, what the neighbors might expect.

"The most immediate effects over the first couple of years," she said, "are things like traffic, noise, trash, police calls, and physical quality of life. A store that size, in 24-hour operation, generates at least 10,000 vehicle trips a day. There will be several tractor-trailer deliveries every day, and Wal-Mart prefers that they occur in low-traffic hours in the middle of the night – so they idle loudly in the parking lot at 3am, under high-intensity lights. That's in addition to traffic generated on neighborhood streets.

"But the long-term effects are economic. The enormous store is based on a business model of single, weekly shopping trips in automobiles and on cannibalizing nearby stores, even other nearby big boxes. Nearby grocery stores are usually the first to succumb, and if they're anchor stores in other shopping districts, additional stores follow. That inevitably means job losses – the best study we have over time, from UC-Irvine, concluded that for every Wal-Mart Supercenter built in California, there was a net loss of 180 jobs." Moreover, the retail jobs provided by Wal-Mart are low-paying, part-time, and generally requiring social-service subsidies of all kinds – a calculated corporate imposition of private business costs on the public at large.

That means that the repeated assurances from Wal-Mart spokesmen that the store will generate traffic for neighboring businesses are inherently untrue – the Wal-Mart business model requires the exact opposite. A further consequence is that most money spent in chain stores – 83 cents of every dollar – exits the community, while roughly 45 cents of every dollar spent in a locally owned store is recirculated in the local economy, generating local economic activity and therefore more jobs.

And it also firmly contradicts city official and chamber of commerce presumptions that any kind of economic development is by definition good – if we lose jobs, money, and neighborhoods by the transaction, Austinites will effectively be subsidizing Lincoln Property Co. and Wal-Mart for the benefit of the corporations and their stockholders. "To satisfy Wall Street investors," Mitchell said, "Wal-Mart must add eight percent of floor space internationally every year – that's now roughly 65 million square feet a year. That's why they keep expanding, in this market-saturation model, until they begin cannibalizing their own nearby stores, close those, and move on."

Under these circumstances, every single Austin citizen is by definition an "interested party" in the Northcross fight, and one-site zoning procedures designed to address neighborhood liquor stores or dental offices are simply not adequate to the task at hand. At a minimum, the ex post facto outcry over Northcross will likely result in the passage of a big-box ordinance – too late to help the near north-side neighborhoods, which, if Wal-Mart gets its way, will be hollowed out like a Halloween pumpkin. In a few years, what's left of these instant suburbanites will be able to shop at either Wal-Mart or Lowe's – or else drive to the Arboretum. Adding a few cosmetic "urban design" elements to the Supercenter facade will do nothing to stop that devolution. How can that outcome possibly provide for the greater good of Austin and its citizens?

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Welcome to Pottersville

A couple of readers have pointed out to me the curious coincidence of City Manager Toby Futrell's conflict-of-interest declaration to me, last January, over the Bill Moriarty affair – Moriarty having been forced out of directing the city's Clean Water Program because of, as Futrell put it, the appearance of a conflict of interest with his partner Diane Hyatt, a program subcontractor ("Point Austin," Jan. 25). "To me," the city manager said at the time, "that raises a judgment issue, that raises a conflict-of-interest issue, and that raises a realm-of-influence issue. ... These are high-level principles with a whole host of ramifications." Futrell pontificated thusly within a few days of filing her own conflict-of-interest disclosure over her husband's employment as an HVAC service manager for Wal-Mart – and within a few days of Lincoln's filing of the site plan for Northcross. None of which was publicly known until Chronicle writers Wells Dunbar and Katherine Gregor reported it last week, after which Futrell abruptly recused herself of any further Wal-Mart dealings – a considerable while after the Northcross horse had left the big-box barn.

In the days since, city officials have repeatedly denied dragging their feet on the big-box ordinance over the summer, even as the Northcross project was very quietly wending its way through the approval process – only to be sprung on the neighborhoods when it was "too late" to do anything about it and "too soon" for the big-box ordinance to have any effect. At a minimum – to coin a phrase – these curious coincidences raise judgment issues, raise conflict-of-interest issues, and raise realm-of-influence issues. These are – to cite the city manager – high-level principles with a whole host of ramifications.

I frankly don't know whether there were any direct conflicts of interest or personal interventions affecting the big-box ordinance process or the Northcross zoning process. But these were nonetheless entirely too opaque for adequate, let alone good, government. Readers can certainly draw their own conclusions. But it seems patently true that the city still much too often treats undifferentiated "economic development" – regardless of its actual consequences on the community at large – as an unquestionable good. And it also appears true that city officials, elected and appointed, heavily influenced by a notoriously craven legal department, inevitably quail at the prospect of defending well-established city priorities against the financial and legal intimidation of major property owners, especially absentee corporations. I might even say I fully understand their trepidation. But it's no fun to watch, nor certainly to be subject to.

Despite years of intense public engagement, city officials still seem not to fully understand that Austinites take local community, local democracy, local business, and the value of labor very seriously. We expect our elected officials to defend those values against the bullying expectations and demands of big money, big property, and deep-pocketed investors determined to siphon away community wealth, economic independence, and political and cultural autonomy. I do believe that if the council shows some spine on these issues, citizens will stand behind them, and together we can begin to face down the corporate bully boys. No matter how much they like to loudly insist otherwise, their interests are in direct and mortal conflict with our own.