Research indicates new Walmart store could hurt Tacoma's economy

Walmart has recently launched a campaign to try to educate Tacomans on the potential economic benefits of building a 150,000-square-foot supercenter at 23rd Street and Union Avenue.

It has argued through op-eds and corporate blog posts that the supercenter will increase property and sales tax revenue, add 350 jobs to the local economy, improve retail wages and support local businesses.

Unfortunately, published research and Walmart’s own actions contradict all of its major claims.

Property taxes are the most striking example. In June 2011, shortly before Walmart began trumpeting its support for local government tax revenues, a public records request shows that Walmart filed petitions to have the 2012 values of its five Pierce County properties reduced by $21 million (17 percent) from 2011 values.

What is amazing is that the “assessor’s determination of true and fair value” listed in the petitions suggests that Walmart had already been offered a $9.3 million reduction. Basically, Walmart was not content to have its taxes reduced by $127,000 in 2012; it petitioned to cut its support for local services by another $153,000.

What is more, a national study (Mattera et al, 2007) found that Walmart had filed at least one property tax appeal on more than 35 percent of its properties during the period studied, with many properties seeing appeals in several different years. This suggests a policy of systematically “rolling back” its support for local police, fire departments and schools in counties nationwide.

The evidence for Walmart’s other claims is similarly shaky.

 • On jobs, a national study published in the Journal of Urban Economics (Neumark et al, 2008) found that the opening of a Walmart store actually reduced local retail employment by 2.7 percent. Every job at a Walmart store replaced 1.4 other local retail jobs.

 • On wages, the Neumark study found that the opening of a Walmart store reduced overall local retail earnings by 1.5 percent, or around $1.4 million. A 2007 University of California Berkeley paper (Dube et al, 2007) also found that Walmart store openings reduced average earnings and health benefits of retail workers at the county and state levels.

 • Regarding local businesses, a study by researchers at Iowa and Mississippi state universities found that the opening of Walmart supercenters in Mississippi counties significantly reduced sales in stores that sold similar products (Stone et al, 2003).

And a case study from the Center for Urban Research and Learning at Loyola University Chicago (Davis et al, 2009) stated that local stores on the West Side of Chicago were more likely to go out of business the closer they were to the new Walmart.

 • Finally, while a Walmart on the Tacoma Elks site could generate more than $40 million in annual taxable sales, the Mississippi study discussed above and a study of Walmart supercenters in Ohio counties (Hicks, 2005) both suggest that increases in sales tax will be mostly or completely erased by reduced sales at other stores.

Evidence suggests that the Elks Walmart would not benefit the Tacoma economy nearly as much as Walmart claims; the net impact may even by negative. What is more, Walmart’s secretive and heavy-handed behavior during 2011 has made many in Tacoma question whether Walmart can ever be a good partner for our community.

Walmart can begin to rebuild trust and increase the economic benefit of its development by engaging with the Tacoma community to shape a site plan that mitigates concerns and includes other needed services. Going forward, our laws and processes should be revised to help us better evaluate the impact of proposed development and support Tacoma’s long-term economic growth.

Bard Luippold is a financial analyst who lives with his family in Central Tacoma and works downtown. Justin D. Leighton is a Hilltop resident and the incoming chair of the Central Neighborhood Council.