DOWNTOWN LOS ANGELES - To some Downtown stakeholders, the announcement that Wal-Mart will open a grocery store in a 33,000-square-foot space near Chinatown is just what they hoped to hear. Supporters instantly cheered the news that had been the source of months of rumors.
“This is a wonderful development for Chinatown,” said one of those supporters, George Yu, executive director of the Los Angeles Chinatown Business Council. “This space has been available for years and needs to be activated.”
However, it seems that for every person excited about the project at 701 W. Cesar Chavez Ave., just east of the Orsini apartment complex, there is someone opposed. Wal-Mart has long been criticized by unions for its labor practices. Additionally, many have complained that the Bentonville, Arkansas-based company’s massive stores allow it to offer low prices that competitors can’t match. The result, critics contend, is that nearby mom-and-pop shops are often forced out of business.
The announcement of the first Wal-Mart grocery store in Los Angeles County drew instant opposition from the Downtown-based Los Angeles Alliance for a New Economy. Members of the group said they “are preparing for a major battle.”
“We’re concerned about the quality of the jobs they’re bringing to this location and its impact on small business, since the majority nearby are local, family-owned businesses,” said Aiha Nguyen, senior research policy analyst for LAANE.
Nguyen said LAANE is currently unclear what form the battle will take — the situation is proceeding rapidly, as Wal-Mart only publicly revealed its intentions on Feb. 24. However, she said members of the organization are spreading the word about Wal-Mart’s plans to come Downtown, and they are meeting with other community groups.
Building With a History
Steven Restivo, a spokesman for the retail giant, said the company has signed a lease for the space at the corner of Cesar Chavez and Grand avenues. It is on the ground floor of Grand Plaza, a 302-unit senior housing complex that the Community Redevelopment Agency helped open in 1991.
Restivo said the company plans to open the business, which is being branded a Wal-Mart Neighborhood Market, by 2013.
The space was originally built to accommodate a grocery store. Just a few blocks west of Chinatown, and catty-corner from the Ramon C. Cortines School of Visual and Performing Arts, it includes 140 parking spaces and loading docks that can handle delivery trucks. Yu said it has never been occupied.
The store will employ 65 people and, in addition to groceries, it will include a pharmacy, said Restivo.
“This store is going to be part of the solution for folks who don’t have affordable grocery options close to home,” Restivo said. “Plus the opportunity to revive a vacant property is right in line with our sustainability goals and is going to help deliver an added economic boost to the area.”
Restivo said that since the space is fully entitled as a market, the project will not require any approvals from the City Council. That is key, because in 2004 the City Council passed an ordinance that discourages Wal-Mart and other retailers from opening superstores within city limits.
The ordinance allows the city to view factors such as job quality and the impact on traffic and other neighborhood businesses before approving stores larger than 100,000 square feet.
Although the council’s power over the project may be limited, that doesn’t mean elected officials are ignoring it. Councilman Ed Reyes, whose First District includes the site, said he has some concerns.
The issues, Reyes said in an email, relate to the original agreement between the city and the developer of the housing complex. He pointed out that the property opened more than two decades ago.
“The decision for a mixed-use residential market facility in Chinatown was made before a school was built there,” Reyes wrote, “and before traffic, public access and safety issues surfaced, especially given the seniors, students and other pedestrians nearby. Convenience must be balanced with the ability to promote public safety.”
LAANE officials are also questioning the history of the development deal. They claim the space that will house the Wal-Mart is part of a project that received city subsidies in exchange for creating 190 permanent jobs in the building.
“I think the city needs to make sure whatever store comes in fills these conditions,” Nguyen said.
The Wal-Mart neighborhood market concept was created in 1998 to offer mostly grocery items in spaces smaller than the typical Wal-Mart superstore, which average about 150,000 square feet.
There are 167 Wal-Mart Neighborhood Markets in the country, but this will be the first in Los Angeles County, Restivo said. There are currently 28 Wal-Marts superstores in the county and five in the city, he said. Four of those opened before the council’s 2004 legislation.
According to the trade publication Supermarket News, Wal-Mart is the nation’s top grocer and generates about $170 billion in grocery sales each year. Mark Hamstra, the journal’s retail editor, said that in keeping with the company’s overall focus, Wal-Mart’s smaller grocery outlets focus on having very low prices.
“I think you’ll see that prices at the neighborhood markets are comparable to what it has at its Wal-Mart super-centers,” he said. “What analysts have found is that in general Wal-Mart prices are about 15% below what you would find in traditional supermarkets.”
Hamstra said the smaller footprint allows Wal-Mart to get into areas where they are otherwise not able to open.
“They’ve run into problems all over the country with opposition to the super-center format, and this really is a traditional supermarket, so there really is no reason for people to object based on the size of the store,” he said.
Yu scoffed at the criticism of Wal-Mart, and predicted that many people in the community would welcome the store. Although Nguyen of LAANE worries that Wal-Mart would kill some of the small poultry and vegetable markets in Chinatown, Yu believes that customers will still shop at places such as the Ai Hoa Market on Hill Street and the Far East Supermarket on New High Street, which sell Asian products that Wal-Mart may not carry.
“It will create additional options here for our residents,” Yu said.
Yu said several efforts to attract a market to that location have failed. The most recent occurred in 2011, when Rio Ranch Market, which focuses on the Latino audience, was slated to occupy the space.
In offering groceries to Downtowners, Wal-Mart would follow Ralphs Fresh Fare, which opened in 2007 in South Park, and Target at Figat7th, which will open this fall and include an emphasis on food items. Nearby, there is also LAX-C, a business at 1100 N. Main St. which has been likened to a Thai Costco.
Unlike those stores, which appeal to a wide swath of Downtown residents, and were generally welcomed and even sought, Wal-Mart still has some minds to win over. That doesn’t phase Restivo, who said that if they build the store and no one comes, then they will have learned a lesson about Downtown.
“We just don’t think that’s going to happen, and quite frankly our critics don’t think that’s going to happen either,” he said. “The day that store opens, there’s going to be thousands of Downtown residents that shop the store. Again, I don’t think our critics will disagree.”
Contact Richard Guzmán at email@example.com.
©Los Angeles Downtown News.