DCN ARCHIVES

March 2, 2005

Unions and residents objected to project

Developer drops plans to construct first Wal Mart in New York City

NEW YORK

A real estate developer scrapped plans to build New York City’s first Wal-Mart store amid intense pressure from residents and union leaders.

The decision, announced by city officials last week, comes as a blow to the retail giant, which has sought for years to move into the lucrative New York City market.

The company had announced Dec. 6 that it would open a new store in the Rego Park neighbourhood of Queens.

“Vornado (Realty Trust) is no longer negotiating with Wal-Mart to become an anchor tenant in the Rego Park site,’’ said Council Member Melinda Katz, chair of the City Council Lands Use Committee.

She said she received a call from Vornado’s attorney that it had made the decision, and that it was looking for other tenants.

Wal-Mart Stores Inc. spokeswoman Mia Masten would not comment other than to say that the company had never signed a deal with Vornado for the 132,000-square-foot space. She said Wal-Mart was still interested in exploring other locations in the city.

Vornado spokeswoman Roann Kulakoss declined to comment.

“I think there was an issue of Wal-Mart’s track record of employees,’’ explained Katz, whose committee is responsible for land use applications only, not tenant approval. “Vornado may very well have a project that could be a good project in the area, and they wanted to go forward based on the substance as opposed to getting caught up in the issues that Wal-Mart seems to bring to the table.’’

Union leaders opposed to the plan have cited a list of labour offences, from a recent settlement involving allegations that Wal-Mart violated child labour laws to the company’s decision earlier this month to close its store in Saguenay, 250 kilometres north of Quebec City, the first Quebec Wal-Mart to gain union accreditation.

The company said the store is not making any money.

Wal-Mart will also be asked to begin negotiations as soon as possible for a first contract for workers at its St-Hyacinthe, Que., store, east of Montreal, who have also received union accreditation. The union has said it would be difficult for Wal-Mart to close the St-Hyacinthe store because it makes a profit.

Wal-Mart, based in Bentonville, Ark., would not have been the first “big box’’ store in New York City.

There are two Target Corp. stores, five of Kmart Holding Corp.’s Kmart stores and five Home Depot Inc. stores.

None are unionized.

Still, small businesses feared Wal-Mart in particular, arguing that the store would drive out many businesses, from hardware stores to clothing stores.

The Associated Press

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