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Littering America with Dead Malls and Vacant Superstores

June 16, 2002 by staff

By Stacy Mitchell and Jeff Milchen
May 2001. First published by Writers on the Range

It’s no secret that as corporate chains have taken over much of the retail economy, they’ve left a wake of half-empty downtowns, shuttered family businesses and neighborhood residents dependent on driving to strip malls and “big box” stores for staple items.

Now these same chains are dealing communities a second blow– vacating existing stores to build bigger outlets, leaving huge empty shells and acres of asphalt behind.

Dead malls and empty superstores now litter the American landscape. Nationwide, fully half a billion square feet of retail space sits empty–the equivalent of about 4,000 shopping malls.

Part of the problem is that chains are building new outlets at a staggering pace and creating a glut of retail space. In the last 12 years alone, per capita retail space has increased 34 percent, from 15 to 20 square feet. Many communities have more retail space than residents can support, so vacancies inevitably follow.

The other part of the problem is that corporate chains feel compelled to reinvent themselves every ten years or so, abandoning existing outlets for new formats. First there were small strip malls, which gave way to enclosed malls. Then came successive waves of ever-larger regional malls. Hundreds of malls then closed following the first wave of big box stores in the 1980s.

In the 1990s the big boxes themselves began to shed their skins, vacating existing stores to build still larger outlets. As a result, Wal-Mart alone has left almost 400 abandoned stores—more than 30 million square feet of vacant retail space surrounded by thousands of acres of asphalt.

The experience of Macon, Georgia is not typical, but instructive. This small city is home to three Wal-Mart carcasses, two of which exceed 100,000 square feet—more than double the size of a football field and triple the size of typical supermarket, and that’s not counting their vast parking lots. Like most of the 34 abandoned Wal-Mart stores in Georgia, the three Macon outlets were shuttered after the company built two larger “supercenters,” swallowing up still more undeveloped land.

Rather than becoming victims of the corporate cannibalization game, many communities are taking a different approach. Dozens have banned new big box outlets by amending zoning rules to prevent construction of stores over a certain size. Others have prohibited retail expansion into undeveloped areas, requiring instead that new stores locate in established downtown and neighborhood commercial districts. Many have also shifted tax dollars that have long subsidized new roads and other infrastructure for sprawling development into projects that support downtown commerce.

Some are beginning as well to see the advantages of working with nearby communities to implement a shared vision for development. Instead of engaging in the lose-lose competition for tax base, residents of the Cape Cod region of Massachusetts voted to create the Cape Cod Commission. This regional planning agency reviews all development proposals that could have impacts beyond their host communities, including all retail stores larger than 10,000 square feet. The benefits and costs of new development projects are carefully evaluated and reviewed for conformity to the region’s land use plan, which encourages the growth of small businesses that employ local residents and meet community needs.

New ideas are also emerging from independent businesses themselves. In 1998, business owners in Boulder, Colorado formed the Boulder Independent Business Alliance, a cooperative effort to help one another survive and build stronger bonds with the community. BIBA grew quickly to encompass more than 150 member businesses. Through group purchasing and a joint marketing campaign that promotes the benefits of patronizing locally owned stores, BIBA has dramatically improved its members’ prospects and made residents aware of just how important the choice “Local or chain?” really is.

Similar alliances have since sprung up in many other communities, including  Louisville, KY; Portland, ME and Minnesota’s Twin Cities. These alliances work not only to enhance competitiveness and marketing, but also to give independent businesses a much-needed voice in local government decision-making. The Salt Lake alliance, for example, played a pivotal role in blocking taxpayer subsidies for a new mega-mall. Without the subsidies, the project was ultimately scrapped.

A new organization, the American Independent Business Alliance, aims to knit these efforts together into a national coalition that will not only seed, nurture and network further local business alliances, but create a political counterforce to the corporate lobbying groups that promote many of the harmful subsidies driving sprawl and chain store proliferation.

Such efforts will pay big dividends in the long run. Unlike footloose superstores, traditional business districts have been around for hundreds of years and can last for hundreds more. Individual businesses may come and go—yesterday’s donut shop becomes today’s bagelry and espresso bar—but the independent business base itself retains its essential role in the economic and social fabric of the community.

Unlike global corporations, local businesses are owned by people who live in the community and are committed to its well being. These businesses are vital to our quality of life and sense of place, but they face powerful threats, and it requires conscious action to ensure their endurance. Thankfully, many communities are responding to the challenge, realizing that the best community qualities don’t come in big boxes.

Stacy Mitchell is a researcher with the Institute for Local Self-Reliance (ILSR.org) and author of The Home Town Advantage. Jeff Milchen is the co-founder of the American Independent Business Alliance (AMIBA.net).

Data source: Wal-Mart Realty

Filed Under: Independent Business

Bigger Banks Mean Bigger Fees

March 29, 2001 by staff

Published March, 29, 2001

Reinforcing the need for limits on corporations’ size in order to maintain competition, the Federal Reserve again has documented that large banks (assets over $1 billion) charged significantly higher fees to customers than small banks (assets under $100 million), and that fees at multi-state bank chains exceeded those of single-state banks.

The report, “Retail Fees of Depository Institutions, 1994-99,” highlights findings from the Fed’s annual survey of bank fees. Congress has required the surveys since 1989, and since 1996 the data has been separated by bank size and whether it was a single-or multi-state institution.

Among the report’s findings for 1999 data: the average monthly fee for a non-interest checking account with a minimum balance was $5.62 at small banks, compared to $8.20 at large banks. Stop-payment orders averaged $13.92 at small banks and $21.50 at large banks. The required minimum balances were substantially higher at large banks than small ones. Large banks also imposed higher and more frequent ATM surcharges. The report also found higher rates at multi-state banks compared to single-state operations.

Why, then, do large banks continue to gain market share? Largely through control of ATMs. In many areas, a handful of large banks control most of the ATMs, and the easiest way to avoid surcharges is to open an account with one of the dominant banks. This creates a perverted form of price competition whereby large banks may gain market share by raising ATM access fees–another example of the vast difference between a market economy and US-style corporate capitalism.

Unfortunately this important information has seen little exposure in corporate or independent media. 2001 may be the last year of the Federal Reserve’s annual report unless Congress enacts an extension or permanent status for these reports. As the only source of data on the consumer impact of banking consolidation and deregulation (and information that would be virtually impossible for any non-governmental organization to compile) these reports should be continued.

This article was based on a report by New Rules Project.

Related News: Independent Pharmacies Beat Chains on Price in New York Study

In December, 2002 prescription price survey conducted by the New York Statewide Senior Action Council in Albany, New York, concluded, “The lowest prices for generic drugs were found at an independent pharmacy. . . contrary to the belief that chain drug stores with high volume purchases would pass on the savings to customers.”

For example, prices for Lovastatin, a cholesterol medication, ranged from $84.50 at the independent Lincoln Pharmacy to $199.97 at Rite Aid. The online pharmacy Drugstore.com offered Lovastatin it for $99.99, Wal-Mart for $136.62, and Target for $146.39.

The Home Town Advantage e-Bulletin, a free Email newsletter, is the source of much information here. See NewRules.org to view a sample or subscribe.

Filed Under: Independent Business

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