Here comes Wal-Mart–There goes the neighborhood

In recent years Greater New Haven has been birthing Wal-Marts like an Old Testament matriarch. By dint of its poverty wages in the United States and abroad, environmental destruction, penchant for illegally forcing workers to work overtime, and an insidious business plan that oversaturates a target market in order to drive local and smaller businesses into the ground, Wal-Mart — aka the ‘Beast from Bentonville’ — a.k.a. the largest corporation in the world — can prove a cancer of convenience to local economies and their denizens. There’s yet another Wal-Mart coming to the New Haven market, and it may be Yale’s.

The knocks on Sam Walton’s superstore come from every angle. Wal-Mart pays workers across the world (primarily in China) such low wages that its competitors must lower their pay to compete, and a company that powerful (its annual haul is higher that the GDP of Israel and Ireland combined) has the capacity to depress wages globally. An average full-time Wal-Mart employee makes $15,000 a year, and wages are regularly withheld so that workers remain part-time (and rarely cross 40 hours into the land of overtime). It is so vigorously anti-union that when workers in a small Wal-Mart butcher shop in Texas unionized, the store closed shop rather than deal with them and announced that it would henceforth buy only prepackaged meat. This summer, The New York Times exposed Wal-Mart for habitually forcing its employees to work unpaid overtime or risk losing their jobs.

Wal-Mart takes the gospel of capitalism to its extreme, wielding a business plan that ruthlessly destroys its competition, big or small. There are already three Wal-Marts within six miles of downtown New Haven. Why would the Waltons possibly want another? Al Norman of Sprawl Busters explains:

“That’s part of the Wal-Mart saturation strategy. They place their stores so close together that they become their own competition. Once everybody else is wiped out, then they’re free to thin out their stores. Wal-Mart has 390 empty stores on the market today. This is a company that has changed stores as casually as you and I change shoes.”

Another study of Wal-Mart’s business patterns found that approximately 75 percent of Wal-Mart sales come from existing stores in the area, and that the sales of small retailers dropped 47 percent in the decade after a ribbon-cutting. With its low low prices gained through exploitation of workers, small businesses are unable to compete.

The vultures (no, not eagles) are circling downtown New Haven, threatening Yale’s newest revitalization plan. Yale’s Office of New Haven and State Affairs says “Yale has invested in key properties on Broadway and the Chapel Street district. These investments create jobs and taxes and support local merchants.”

Consistent with its avowed goal, Yale should vigorously oppose the new Wal-Mart, no?

No. In fact, Yale invests with the development company that has purchased the lot and chosen Wal-Mart as one of its major tenants. In fact, it is quite possible that Yale has a financial interest in building the new North Haven store. The meat:

This summer the New Haven Register announced the sale of the former warehouse of American Sales Corp. at 2 Universal Drive to the National Realty & Development Corp. of Purchase, N.Y., which immediately listed Wal-Mart as a tenant on its Web site. In fact, a large picture of a Wal-Mart adorns the site’s front page, and the two have hooked up at more than a dozen sites. In these deals, the practice is for the buyer to be a separate corporation formed specifically for this property and comprised of various interests. Yale’s 1998 tax filing reveals that National Realty manages $4.5 million of Yale’s endowment in a fund called “Plaza 15-5″ (active in Connecticut since 1993). By mid-2000 Yale’s ownership dropped below 50 percent, and the fund disappeared below the radar.

The North Haven Wal-Mart deal was announced this summer, but no final deed of sale or plans have been submitted to North Haven’s clerk or Planning and Zoning Commission. Hence we don’t know for certain whether Yale’s endowment funds are being used directly to build the North Haven Wal-Mart. But at the very least, we do know that the North-East’s largest Wal-Mart developer has been managing a portion of Yale’s endowment.

So Yale’s money is tied up with the developer of North Haven’s embryonic Wal-Mart; yet Yale prides itself in its beneficence in “rebuilding” New Haven. What gives? Despite the best intentions of administrators, faculty, and students to improve New Haven, the vast investments of the Yale endowment potentially dwarf these gestures. This is certainly a powerful argument for economic transparency, proving that Yale’s investments could potentially injure those just outside its gates in addition to those in distant continents.

So why wait for the ink to dry? While hands have shook and headlines written, the sale of 2 Universal Drive to the National Realty & Development Corporation and the tenancy of yet another Wal-Mart have not yet become fact. If we are to grant Yale the benefit of the doubt and claim that they simply didn’t know that a real estate company they happen to invest with happens to be building a Wal-Mart that might injure their host city, now is the time for action. Michael Morand of the Office of New Haven and State Affairs claimed that New Haven’s “thriving arts scenes, restaurants, and clubs” will allow downtown to “hold its own” against the Wal-Marts and Targets of the suburban strips. But the real estate musical chairs of downtown might suggest otherwise, and experiences around the nation are telling: Wal-Mart purposefully runs local businesses into the ground and succeeds like no other company in the world, and New Haven is unexceptional. Yale is no longer a majority shareholder in Plaza 15-5, but a retraction of their sizable investment in that group and some lobbying to North Haven’s Planning and Zoning Commission could potentially stop Wal-Mart’s expansion in its tracks.

Perhaps the question boils down to whether Yale should turn a fast buck or improve New Haven (aka the Yale Investment Office vs. the Office of New Haven and State Affairs). Who wins that fight? Where does the center of the bureaucracy that is Yale lie? The University’s actions, not its rhetoric, will weigh the scale.



Matthew Schneider-Mayerson is a junior in Davenport College. His column appears regularly on alternate Tuesdays.


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