January 9, 2012
Midtown Miami and the Walmart Effect, a Poor Fit - further thoughts

This morning, Open Media Miami and the Miami Herald published an op-editorial which I wrote, edited for space constraints.  The below column includes supplemental information which I discovered during the course of environmental surveys for a commercial real estate loan, as well as my recommendations for an alternative location for Walmart in Miami.
Midtown Miami and the Walmart Effect, a Poor Fit - further thoughts

Grant Stern, is President of Morningside Mortgage Corporation
A Walmart location at Midtown Miami just doesn’t make sense.  The discount retailer in a hub of arts and culture is out of place.  Numerous surrounding businesses stand to lose sales, while exchanging small business owners’ shops for a handful of poverty level jobs.   Increasing auto traffic stands to spoil Midtown Miami’s successes, while risking a decrease in long-term viability as a destination for corporate and boutique retailers.   

There are numerous sites of sufficient size in Miami west of I-95, any of which could support a Walmart as part of a transit oriented development plan.   Ultimately, even Walmart’s interest in delivering value may not be met by the Midtown location.

The DDR sale of this prime retail space marks a disturbing trend of Miami’s large, publicly listed companies selling realty assets to raise short-term cash at the expense of the local community.   Some folks might loudly, and erroneously proclaim this multinational corporate buying spree is catalyzing neighborhood improvement; the truth is just the opposite.

Miami’s residents, its small business people, its artists and entrepreneurs have conspired to create a uniquely vibrant set of neighborhoods in spite of a rough national economy and local real estate bust.

The destructive power of “Low Prices, Every Day” on local retailers and mom & pop shops is well documented in books like “Walmart Effect” by Charles Fishman.   Walmart isn’t a net provider of jobs, merely a re-locator of jobs from nearby small businesses.   

There are numerous mom & pop stores selling groceries, clothing and life’s other necessities in nearby Overtown, Little Haiti, Alapattah and Wynwood.   These small business owners provide important services to nearby residents for whom driving isn’t an option, as well for small business owners who spend their profits locally.

Highway frontage - lacking in the proposed Midtown Walmart location - is a precious commodity.   Direct frontage to major expressways provides easier access for shoppers and free advertising too.  

In the mid-90s, Walmart purchased a 42-acre site located just north of Okechobee Road and west of the Palmetto Expressway.  Their quest for the best location, and to provide “Low Prices Every Day” yielded Walmart Store #2814 in Hialeah Gardens.  According to Miami-Dade’s PERA (formerly DERM) which tracks land contamination, this site was formerly a solid-waste landfill containing arsenic, lead, ammonia and occasionally registering methane in combustible quantities.

I’m not advocating Walmart to place all of their stores atop dumps, and this is not a commentary on the quality of the goods they retail.  However, its yet another reason that choosing Midtown seems at odds with their business model.  How will a store 1/10th the size of a traditional outlet, more than ½ a mile and multiple traffic lights from the nearest highway connection serve their needs as a retailer?

Currently, there’s a greater need for commercial development on the State Road 112 corridor, perhaps near the Earlington Heights station.   Only 3 miles to the west of Midtown, it would serve the same arterial highway linked consumers.   The MetroRail runs alongside SR 112 providing an important transit link for non-driving customers, which is missing from Midtown Miami.

Perhaps, Miami-Dade County can dust off the MetroRail extension from Earlington Heights to SunLife Stadium if there’s a Walmart connected to the station.  A location alongside any MetroRail station on SR 112 would likely provide the low price retailer with lower property taxes and better connectivity to transit and highway too.   Maybe, just maybe, it might create a job or two in an area suffering greater unemployment than the rest of the city.    

  If Walmart completes its purchase of this Midtown site, and submits a plan conforming to zoning regulations, we may have few alternatives to prevent a tragedy of dollars with a lack of sense from unfolding in the heart of Miami’s revitalized urban center.

Grant Stern writes Realty articles on his blog CondoTerminators.net as well as for CondoVultures.com.  Mr. Stern also sits on the Board of Directors for Grand Central Park’s sponsor OPRA.  Follow @GrantStern on twitter.

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