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Originally published June 23, 2012 at 8:03 PM | Page modified June 25, 2012 at 3:43 PM

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Walmart's Bellevue move rouses local opposition

Walmart's expansion has drawn criticism from labor unions and some community groups over the past year.

Seattle Times business reporter

Local opposition to Walmart

Walmart's expansion has drawn criticism from labor unions and some community groups over the past year.

Aug. 30: Tacoma's City Council tries to block Walmart's expansion by temporarily banning new stores that exceed 65,000 square feet. Two months later, the council gives Walmart permission to build a Supercenter in central Tacoma, saying it has no other choice because Walmart submitted its application before the moratorium took effect.

Jan. 5: Walmart announces it will open a 64,000-square-foot grocery called Neighborhood Market in a defunct Kmart store at Kelsey Creek Center in Bellevue.

Jan. 11: Walmart reveals plans for another Bellevue location, saying it will open a 76,000-square-foot discount store in the old Mervyns at Marketplace @ Factoria, about four miles from the Kelsey Creek project.

March 7: Friends of North Kelsey, a community group in Monroe, files a lawsuit seeking to overturn a Snohomish County Superior Court decision that allows a Walmart Supercenter to be built on former city property. The group says the Supercenter would interfere with the city's original vision of a pedestrian-friendly development.

April 5: Worker-advocacy and environmental group Puget Sound Sage releases a report by economist Christopher Fowler concluding Walmart's potential entry into the Skyway area of South Seattle would hurt local businesses and drive down wages. Walmart says Fowler's report is based on faulty data.

Source: Seattle Times research

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Any new Walmart store comes to town with a bagful of controversy, and Bellevue is no exception.

On Friday, the first of two Walmart stores planned for Bellevue this year will open in a part of town known for its ethnic diversity and mix of upper- and lower-income families.

While Walmart portrays itself as a decent employer that boosts the economy and contributes to charity, its entry into Bellevue has sparked complaints and protests from local activists.

Labor unions, liberals, environmentalists, and small-business advocates all worry about the chain's growing presence, and they've organized throughout the Seattle area to call for better working conditions and more corporate transparency.

"The point is not to somehow stop the two Bellevue stores from opening," said Tom Geiger, a spokesman for the United Food and Commercial Workers (UFCW) union, which held an anti-Walmart rally last month in downtown Bellevue. "The point is to raise concerns about how Walmart operates and spread that concern to other communities, because Walmart is coming. And they're going to come hard."

The expansion is part of an effort by the world's largest retailer to reach new bargain hunters who are trading down in a sluggish economy. Coastal "blue-state" cities and affluent shoppers — both outside of Walmart's core constituency — are seen as potential growth areas for the Bentonville, Ark.-based company.

"No matter what walk of life you come from, I think you're always going to appreciate having more affordable shopping options," said Walmart senior community-affairs director Steven Restivo, conducting a guided tour of the East Bellevue store last week.

Local critics

Walmart's move to Bellevue has galvanized local critics who worry it raises the likelihood of a first-ever Seattle Walmart. The discount retailer has no physical presence in Seattle except for a single store by sister chain Sam's Club.

The most common complaints are that Walmart drives mom-and-pop stores out of business with its rock-bottom prices and that it depresses wage and benefits standards by creating only nonunion jobs.

Sergiu Codreanu, a Bellevue Rite Aid employee and UFCW member, said workers already face a tougher time at the bargaining table as Walmart exerts more competitive pressure on local retailers.

"My main concern is that Walmart doesn't play by the same rules," he said. "Management tells us they have to compete with nonunion stores, and right now there's talk of substantially increasing our out-of-pocket health-care costs."

Codreanu joined Geiger at last month's rally outside the Bellevue Hyatt Regency, where a small group of labor activists held up a banner that said "Walmart's word cannot be trusted." Inside, a corporate official spoke at a Bellevue Chamber of Commerce luncheon.

Jennifer Spall, senior manager of public affairs and government relations for Walmart's Washington and Oregon operations, defended its labor practices, noting it pays an average hourly wage of $12.93 for full-time workers, excluding management. "We provide good, competitive jobs," she said.

(By comparison, Costco pays an average hourly wage of $21.36 for full-time and part-time workers in Washington, not counting management, said John McKay, chief operating officer of Costco's Northern division.)

Spall also made a case for why some specialty shops and restaurants will benefit from being near a new Walmart. Among the likely beneficiaries, she said, are child-care centers, hair salons, pet stores and banks.

"We're a very large company, but we don't sell everything," she said.

Regional reaction

Walmart's expansion has drawn opposition elsewhere in the region.

Tacoma's City Council tried to block a Walmart Supercenter last year by temporarily banning new stores over 65,000 square feet. Walmart won approval anyway because it submitted its application before the moratorium took effect, and the Supercenter is to be built in central Tacoma by fall 2013.

"Would people have had the same issues if this were Ikea? Probably not," said Tacoma City Council member David Boe. "We're surrounded by Walmarts, but Tacoma right now does not have a Walmart, and a lot of vocal opponents said, 'That's what we like about Tacoma.' "

In March, some Snohomish County residents took legal action to try to stop a new Supercenter in Monroe, saying it would interfere with the city's vision for a pedestrian-friendly development. The case is pending in state appeals court.

An expansion of Walmart's Renton store has been on hold because of a lawsuit, but the appeals court gave Walmart the go-ahead last month, and construction is likely to begin this fall.

"I think what gives us solace is that we know the reality of the turnout when one of our stores opens," said Restivo, predicting a large crowd at this week's East Bellevue opening.

He characterized Walmart's controversial reputation as the lingering result of public-relations battles lost some years ago.

"We didn't do a very good job of telling our own story, and we let others manage it," he said. "That's not undone overnight."

Message strikes chord

Last month, Walmart's U.S. division reported its third consecutive gain in sales at stores open more than a year, reversing nine straight quarters of negative sales trends. By many accounts, the chain's "Save Money. Live Better" message has struck a chord with today's post-recessionary shoppers.

"Walmart is expanding its appeal with upper-income shoppers," said analyst Robin Sherk of Kantar Retail. "If you ask them, they'll say they're concerned about serving everyone, and of course they're focused on their core customer, which is the low-income shopper. But if they're going to grow, they have to widen their appeal."

Walmart also faces competitive pressure from Amazon.com, Costco and other retailers that are doing well in a down economy.

Dollar General, Dollar Tree and Family Dollar opened more than 2,000 locations in the past two years. This summer, Target will open new City stores in downtown Seattle, Chicago and Los Angeles.

"Costco is in coastal blue-state cities, and Walmart needs those urban, affluent people. It can't just concede that territory to Costco," said Nelson Lichtenstein, a labor-history professor at the University of California at Santa Barbara. "The imperative to get into the city is tremendous."

To improve its public profile, Walmart has endorsed such popular causes as hunger relief and environmental sustainability. It also is a charitable player, giving more than $15.1 million in cash and in-kind donations to local organizations in Washington state last year. (Seattle-based Amazon, by contrast, does not disclose how much money it gives to local charities.)

Seattle store?

In April, union demonstrators gathered near City Hall in downtown Seattle, demanding to know if elected officials had met with Walmart to discuss a new store. The city replied that no such talks had taken place.

Spall dismissed the notion Walmart has its sights set on Seattle, citing a shortage of suitable space. "Look at the maps. Look at what's available," she said. "You're just not going to find 20 acres to build on in Seattle."

But the UFCW's Geiger remains wary. "I'd be very surprised if they didn't have plans to come to Seattle," he said. He argues that a continuing bribery scandal surrounding Walmart's Mexican business reinforces claims the company can't be trusted.

Siobhan Donohue, who helps run a family-owned German deli in East Bellevue, joined two dozen protesters at Kelsey Creek Center on May 30 to push for more corporate transparency.

She took issue with how Walmart announced its new store there in January. Not until word leaked out and protesters pressed Kelsey Creek's management for information did Walmart confirm its plans to be the anchor tenant.

"We just would have liked some warning," Donohue said. "As a small business, you have to brace yourself. You think of the traffic impact, or whether you need to change your inventory. If they sell something we sell, will people stop buying it? That sort of thing."

Neighborhood store

The store at Kelsey Creek Center is a different kind of Walmart, called Neighborhood Market. Painted green and yellow, it carries mostly groceries, including some local products, such as wines from Chateau Ste. Michelle in Woodinville and gluten-free breads from Zen Bakery in Bellevue.

Brian Franklin, executive vice president at PMF Investments, Walmart's landlord at Kelsey Creek Center, said the chain will breathe new life into a darkened storefront.

Kmart abandoned the site a decade ago, and deals with other potential tenants, including Costco, fell through before Walmart.

"When Walmart announced, that building filled up within a month," Franklin said, pointing to new space occupied by Little Caesars and Verizon Wireless.

"If you look at a picture of what we had before and what's here now, it's night and day," he said. "This is just absolutely gorgeous."

Franklin shrugged off complaints about Walmart's handling of the store announcement, again pointing to smaller tenants. "Nobody knew that was going to be a Little Caesars until they put up a sign," he said.

About four miles away, Walmart is building a store inside an old Meryvns at Marketplace @ Factoria, joining Safeway, Nordstrom Rack, TJ Maxx and Target. At 76,000 square feet, the Factoria Walmart will cover a bit more space than the Neighborhood Market and sell mostly general merchandise.

Andrea Martin, of Kirkland, who works near Factoria mall, said she looks forward to the new Walmart when it opens this fall.

"In Factoria, we only have Target. Having the two compete against each other will be better in terms of prices," she said.

But Martin does worry about one thing — more traffic on the roads.

"If it takes me 25 minutes to drive four blocks, I won't go," she said. "It's already very congested."

Amy Martinez: 206-464-2923 or amartinez@seattletimes.com

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