Naked City

Big-box study gone bad?

Nearly four months behind schedule, the City Council finally got to hear the findings of a commissioned study of the impact of big-box retail on Austin's economy and infrastructure. And those findings were (by the study's own admission) both incomplete and inconclusive – and a disappointment to civic activists who pushed for the study in the first place and who felt (and still feel) that the negative impact of big boxes is self-evident.

Consultant Jon Hockenyos of Texas Perspectives did the study, with substantial assistance from planning maven Scott Polikov and from city staff. Hockenyos reported to the council that his mission was harder than he (or they) expected, given the difficulty in finding accurate or relevant data about what defines a "big box"; how much market share big-box specialists like Wal-Mart and Home Depot command in any given market (his guess for Austin is 21%); and how those stores compete with local, independent retailers.

"I would say that the evaluation of big boxes really is largely a function of which stakeholder lens you put on it," Hockenyos told the council. "Consumers probably enjoy an unprecedented level of low prices, [but] emphasis on cost containment does put downward pressure on wages ... and lower labor compensation does create social costs, some of which are borne by the public sector."

Perhaps the most controversial of Hockenyos' assertions – though not in the eyes of a largely receptive and laudatory City Council – was that "there is probably very little direct competition between a small local retailer and the big boxes." This does not exactly jibe with decades' worth of stories and studies about small businesses devastated by the arrival of Wal-Mart and its ilk in their towns. But Hockenyos drew his conclusions from the difficulty in finding specific products carried by both local retailers and big boxes. The jeans at Wal-Mart, at Allens Boots, and at FactoryPeople are all different products, in Hockenyos' analysis, so it's hard to say who's taking away whose dollar. "In the larger sense, of course, every retail dollar is in competition."

Successful small retailers in Austin, he told the council, "either sold something different or a more extensive product line than the big boxes, or they were able to add value through some combination of service, customization, convenience, or what I would call an 'experience.'" In other words, there's a difference between small local retailers and small unique funky weird local retailers, and one of Hockenyos' conclusions was that the city should amp up its efforts to help the local businesses that support "cultural vitality." He also made a pitch for the city's most assertive (so far) response to the big-box trend – enhanced design standards but not so enhanced as to drive Austin's "fair share" of the retail market (and its sales tax revenue) beyond the city limits.

Much of what activists were hoping to see in the study, however, was not there – a thorough analysis of the social costs of big-box development (primarily on transportation and public safety; Hockenyos did speak some about problems caused by low retail wages), and a look at how dollars spent at local retailers (and thus more likely to be spent again in Austin) compare to those spent at chains and shipped off to Arkansas, et al. The council probably won't do anything with Hockenyos' findings at least until the fall, after budget season, by which time big-box foes in Austin may have contrary findings of their own.

Indeed on Tuesday, Full Circle – a newly formed advocacy group focusing on corporate responsibility in the wake of big-box deals all over the region – announced that it will seek an independent review of the city's study. Citing substantive omissions as well as possible errors, the group called the study incomplete.

"This really doesn't move us any closer to a true understanding of the costs vs. benefits to the city," said Full Circle board member Jack Kirfman. "We realize this is a complex subject, but we were frankly surprised by the lack of usable information in the study, especially when so much research is readily available."

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KEYWORDS FOR THIS STORY

Big Box, big box retail, Jon Hockenyos, Texas Perspectives, Scott Polikov, cultural vitality, sales tax, Wal-Mart, design standards

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