City, businesses hopeful Wal-Mart will help, not harm, local stores

While many horror stories are told about the effect a Wal-Mart opening has on the local business community, many in Maricopa are predicting a net gain.

“I think there are some that are going to be hurt, but for the most part it is going to be a good thing for the community,” said Terri Kingery, executive director of the Maricopa Chamber of Commerce.

Kingery said currently many people leave town to do their shopping. If locals shop at a Wal-Mart in Maricopa as opposed to going to Chandler, they are more likely to eat here or possible discover another business they never knew about, she said.

One business owner who said he is hopeful the retail giant will bring some new customers is Jerome Flowers, who owns Romy’s Ribs, a portable barbecue stand located at the Stage Stop Marketplace on the weekends.

“Many people in town don’t know we are out there because they never drive past the Fry’s,” Flowers said. “This will bring them our way.”

Assistant City Manager Roger Kolman said, “It is going to be great for many businesses and the city.”

Nationwide, there has been public outcry for years that new Wal-Marts lead to the closure of small, local businesses. Yet some think any negative impact will be lessened in Maricopa because the city lacks the types of general retailers, such as clothing and sporting goods stores, that often lose business to Wal-Mart.

Susan Varieur, the owner of The Card Corner, said she believes her sales will not be affected by Wal-Mart because her merchandise differs completely from the mega-retailer. “I knew they were coming when I opened,” she said.

The businesses that might be hit hardest aren’t “mom-and-pop” shops but rather stores by other national chains. According to a study by Mississippi State University, food stores and building materials retailers such as hardware stores are often among the businesses that suffer the biggest drop-off in sales after a Wal-Mart Supercenter opens nearby, which isn’t good news for the Maricopa locations of Fry’s Marketplace, Bashas’ and Ace Hardware.

“We know it is going to affect the sales, but we don’t know how much,” said Kristy Nied, Bashas’ spokeswoman.

The city gave the builder of the Wells at Maricopa shopping center, which was originally scheduled to be the home of a Home Depot, Wal-Mart Supercenter, Walgreens and other retailers, concessions in the form of a tax rebate to cover the cost of necessary infrastructure and off-site improvements.

The $18.4 million in improvements included the relocation of a flood channel, the addition of several stoplights and upgrades to the Maricopa-Casa Grande Highway.

“Most of the improvements are things the city would have had to do eventually,” Kolman said.

To recoup the costs, the developer, Shea Properties, will receive a 1 percent rebate of all sales tax generated by Wal-Mart and a rebate on construction tax.

Wal-Marts in Arizona bring in an average of $35 million a year in sales, but Kolman said he believes the Maricopa location will surpass that amount.

However, if that number holds true, Shea would be left waiting more than 50 years to recoup its investment.

“This type of agreement requires the developer to perform by drawing in new retailers if they want to be paid back their investment in a timely manner,” Kolman said.

While, the majority of Shea’s payback will come through retail sales, the developer will also get a 3.5 percent rebate on construction sales tax that arises from the building of new stores in the center.

Thus far this fiscal year, the city has collected $8.1 million in sales tax, and Kolman says in the next fiscal year, which begins in July, Wal-Mart should add a minimum of $350,000 to that pot.

“I’m excited to see them come,” Kolman said.

Photo by David Argabright