Wal-Mart, Home Depot spark concerns among Juneau residents

Assembly to hold public hearing about Home Depot on Jan. 10

Posted: Sunday, January 02, 2005

Residents seem to agree that the cost of living in Juneau is high. But the prospect of international retailers coming to town with the promise of low prices has sparked debate.

Juneau Chamber of Commerce President David Summers said members he has talked to don't even feel the same way about big-box retailers The Home Depot and Wal-Mart.

The Home Depot, based in Georgia, hopes to open a Juneau store "as soon as possible" if it can acquire 10 acres near Costco, spokeswoman Kathryn Gallagher said earlier this month.

Arkansas-based Wal-Mart has inquired about the unused former Kmart building near Lemon Creek as a store site, said Eric Berger, Northwest community affairs manager for Wal-Mart in Seattle.

"Most of the (chamber members) I've talked to tend to like the idea of a Home Depot," Summers said. "Most people I've talked to don't like the idea of a Wal-Mart."

Summers stressed that the chamber hasn't taken a vote, and he doesn't know if the reactions he has heard reflect the prevailing views. The chamber hasn't taken a position on national chains in general.

Juneau's two current big-box retailers, Fred Meyer and membership wholesaler Costco, are chamber members, he said.

But Summers clearly hears more negatives about Wal-Mart, he said.

The suggestion of the two stores locating in Juneau came in the same month that the Juneau Economic Development Council confirmed what many people may have already felt. It found that Juneau had the highest cost of living among seven prominent Northwestern cities, including Seattle, Anchorage and Fairbanks.

So wouldn't lower prices be welcome?

Summers said he doesn't believe it would have an effect on the cost of living. He said some people have expressed concerns about what big-box national retailers would pay their employees.

Bruce Abel, president and chief operating officer for Don Abel Building Supply, said the community's experience with the discount department store Kmart, which closed in April 2003, shows that a large discount employer can affect wages in the community.

Kmart opened in Juneau in 1993. In 2001, it became a Super Kmart with the addition of a full-service grocery department. Abel said during the 10 years of its Juneau operation, he saw wages dropping.

"When Kmart opened, we had to compete for entry-level employees at $10 an hour," Abel said. "After it opened, we competed at $8 an hour."

Wal-Mart has been under some national scrutiny.

The University of California-Berkeley Labor Center determined that Wal-Mart employees in California sought $86 million in state aid to supplement their incomes, the Los Angeles Times reported. The researcher concluded that the company was shifting part of its labor costs to the public.

Wal-Mart said the chain employs more than 60,000 people in California, pays competitive wages and gives jobs to people who would otherwise be unemployed.

Gallagher, of The Home Depot, told the Empire that the store "provides excellent benefits to both full- and part-time associates." She said it creates 150 jobs when it comes into a community.

A list of its benefits includes medical, dental, vision and life insurance for full- and part-time employees. Eligible dependents, including same-sex domestic partners, may be covered under most plans.

At the Dec. 20 Juneau Assembly Lands Committee meeting, Murray Walsh of Walsh Planning and Development Services, charged that the city was giving The Home Depot special treatment. He said local businesses should have been given the opportunity to buy the city land, used as a gravel pit, that The Home Depot is considering.

"Home Depot is only 10 acres," Deputy City Manager Donna Pierce said Thursday. "There will be 20 acres that will be available for the public."

Community Development Director Dale Pernula said the land project will go through several public processes before it would be approved.

The Assembly is scheduled to have a public hearing Jan. 10 about whether to authorize City Manager Rod Swope to negotiate with The Home Depot.

"Once the land disposal is ready to go, Home Depot will need recommendations from the (Juneau) Planning Commission," Pernula said.

The Home Depot will need to apply for a conditional-use permit for its building and use, which the Juneau Planning Commission will review, he added. The company also will need to submit a subdivision plan for the property to the city, including street layout of the land.

Pernula couldn't say whether Wal-Mart will seek permits to renovate the former Kmart building anytime soon. Various groups have requested a plan of the Kmart building, he said, but he didn't know if any of them represented Wal-Mart.

"They haven't talked to me or my office yet," he said.

Abel said he is among the business people who oppose both Wal-Mart and The Home Depot coming to Juneau, although he added that people might look at his views the wrong way, considering he is a competitor.

His store has been in Juneau for 68 years, and while he said it certainly is no big box, it is one of the largest Ace affiliates in Alaska. Ace is a cooperative that buys $3 billion in hardware a year.

Abel said he believes he could survive The Home Depot coming to Juneau, but doesn't think all of the other current hardware stores could.

"I would not be the same operation," he added.

And because a minority of The Home Depot's business actually is hardware and building materials, the new store also would be competing with garden and landscaping centers, stores selling glass and floor covering, and even merchants selling home appliances.

For The Home Depot to be successful in a city of about 30,000 with no road access, it would have to take trade from existing businesses, Abel said.

"Just because Home Depot opens doesn't mean you and I are going to buy more light bulbs and two-by-fours," he said.

Abel doesn't want to see the "homogenization" of Juneau with a large business shutting down smaller local businesses that support the community.

"Who's going to pay for the softball teams?" he said. "It would displace existing full-time jobs."

Summers, who owns Alaska Knife Works downtown, said he knows competition from a large national retailer can affect the viability of a small business. But he said it is a free-market economy.

"I'm an entrepreneur," he said. "I could be big one day."

• Juneau Empire reporter I-Chun Che contributed to this report.

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