Rebuilding Place in the Urban Space

"A community’s physical form, rather than its land uses, is its most intrinsic and enduring characteristic." [Katz, EPA] This blog focuses on place and placemaking and all that makes it work--historic preservation, urban design, transportation, asset-based community development, arts & cultural development, commercial district revitalization, tourism & destination development, and quality of life advocacy--along with doses of civic engagement and good governance watchdogging.

Wednesday, February 04, 2015

A paper on Walmart that I wished I'd been aware of back when DC was happily recruiting the company to the city

The US Department of Agriculture supports "regional rural development centers" across the US to support the agricultural extension system and its mission of promoting successful rural development in all aspects--social, community, economic, agricultural.

We can argue that the community development movement for sure and even planning as a profession has antecedents in the agricultural extension system, which developed beginning in Civil War times, with the creation of the federally-supported land grant (agricultural college) university system across the states.  Parallel with the development of each university was the creation of a state-wide agricultural extension system to advance the application of knowledge towards the improvement of agricultural yields.

In fact I frequently mention the work of Everett Rogers on the diffusion of innovation (graph at left).  His training and research came out of the rural development field.

The Northeast Regional Rural Development Center is based at Penn State University and is set up to support rural development and improvement efforts in the Northeast and Mid-Atlantic states.  I was looking at some of their recent publications and out pops "Wal-Mart and Social Capital." published in the American Journal of Agricultural Economics.

From the article:
Advances in the consistent measurement of county-level social capital (Rupasingha, Goetz and Freshwater 2006*) now make it possible to examine rigorously the impact of bigbox chains on the civic capacity of all rural and urban US counties. Previous studies have implemented the concept using trust, social norms or networks, following Putnam’s (2000) seminal work, Bowling Alone. These studies use cross-country comparisons based on individual-level data (the World Value Surveys, Knack and Keefer 1997), state-level data in the U.S., (the General Social Survey, Glaeser, Laibson and Sacerdote 2002) or data collected in individual-level surveys in specific contexts (Narayan and Prichett 1999).

In this article, we identify for the first time the independent effect of Wal-Mart stores on social capital at the U.S. county-level during the 1990s. We propose a conceptual model of the processes leading to changes in social capital and hypothesize that big-box corporations, in which innovative business processes and management functions are handled out of centralized headquarters, or outsourced to Asia, depress social capital stocks in local communities. 
This compounds the adverse effects of losing local philanthropic capacity, reinvestment of surpluses (rents) and community-specific knowledge or capital.
* "The production of social capital in US counties," Journal of Socio-Economics

The papers related to social capital at the county level (DC functions as a county from the this standpoint) look to be quite interesting.

During the process of shepherding the process that produced the report, ANC4B Large Tract Review Report on Walmart, 5/2011, for ANC4B, concerning the proposal for the now opened Walmart on Georgia Avenue NW in my neighborhood--the report was praised, but systematically ignored, by the DC Office of Planning--it happens that while talking with one of the professors who co-authored a paper on the impact of a Walmart store in Chicago, I specifically mentioned this element as a likely impact from the change in how the retail sector is organized at the local level.

The chaining up process is accelerated as other chains come to the area to be proximate to the Walmart big box store so they can also share the customer base, which further accelerates the loss of social capital that had existed within the local retail sector in general and within the neighborhood commercial district specifically.

Of course, during the pre-entry period, Walmart steps up local philanthropic efforts to build support (see for example the op-ed by one such funded organization, "Walmart: A force for good in D.C.," published in the Washington Business Journal--although to its credit the WBJ also published my critical piece, "Temper Walmart Glee with Planning").

As the company successfully opens stores, local philanthropic activity is likely to decline significantly, as it did in Prince George's County, after the within Beltway store on had been open for a couple years ("Wal-Mart has donated $2.2M to D.C. causes since proposing District stores" WBJ).

Also see the past blog entry "Lessons from Walmart's foray into Washington, DC."

A little update on the Georgia Avenue NW Wal-mart and the long term possibility for site redevelopment.

The site has been sold to a company that is committed to mixed use development according to the Washington Business Journal ("The second Wal-Mart to open in D.C. gets new out-of-town landlord").  The property was an outlier in the portfolio of the original developer and they weren't interested in fully monetizing the value of the property because obviously, they had no long term commitment to owning the property.

So in 10-20 years, we're likely to see this site get redeveloped into the kind of mixed use development that should have been built from the outset.

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At 4:26 PM, Anonymous Anonymous said...

I generally agree with your analyses but disagree here. The fact that out-of-market sources of capital, and landlords, come into DC reflect the healthy RoR of investments in land in the city, such as in other major cities.

I think have too much dependency on local sources of capital and land management can lead to a static and slow-moving real estate sector.

More importantly, I think, will be Wal-Mart's ability to adapt their products and services to a city-level market. Presumably sub-city (e.g. neigborhood) services would be met by convenience and grocery stores.

Don't forget, of course, that the original general retailers were urban department stores.

However the argument about philanthropy going down is the same argument that automobile dealerships make as to why Tesla shouldn't be allowed to sell cars on their own....that it is the local dealers who support Little Leagues and the Rotary Club. This overlooks that the lower prices enjoyed by consumers would result in more money that they could donate to charities of their choice.


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