The Neighborhood Retail Alliance on Kingsbridge and a living wage

Over at The Neighborhood Retail Alliance, there's some discussion about the Kingsbridge Armory project and the coalition's demand for a living wage. They point out that this is not just about ensuring that local residents can get good jobs and benefit from the development; it's also about safeguarding the local economy and ensuring that taxpayer dollars aren't used to subsidize big business:

That being said, the demand for a living wage remains as a compelling component of any subsidized retail development. In our view, it is always problematic to use tax payer dollars to incentivize new retail projects; since the end result is usually the shifting of retail sales from existing mom and pop stores to national chains, And, as Stacy Mitchel's seminal work in this area underscores, this kind of policy results in a net loss to the locality.

Put simply, local dollars re-circulate at a much more productive rate that those of national chains headquartered elsewhere. Therefore, if we are going to subsidize chain stores that cannibalize existing neighborhood retailers, the least we can insist on is that these entering retail outlets pay the locals at a proper living wage. Anything less is simply cheating both the neighborhoods and the tax payers in general.

Appelbaum gets it right: "I don't buy that assumption," said Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union. "It's not a matter of whether it's going to be profitable, but the size of the profit they will make." Living wage advocates point to the $40 million in city taxpayer money subsidizing the armory project in the form of tax breaks and city-funded repairs. "If they are taking from government," said Appelbaum, "they have to give back to the community."

For more on Stacy Mitchell's research supporting local business, visit the New Rules.

Seattle's Dearborn Street Coalition for Livable Neighborhoods

The Dearborn Street Coalition was formed in 2006 to ensure that development in Seattle's Little Saigon area and neighboring areas will meet the needs of local residents, small business owners and other stakeholders. With over 40 members in the coalition, it has been seeking to negotiate a CBA involving a large-scale retail and housing complex proposed to be constructed at the intersection of Dearborn Street and Ranier Avenue. The development will encompass an old Goodwill building, and the proposal includes a new Goodwill facility, at least 500 units of affordable and market rate housing, and a significant amount of retail space, including two big box stores, restaurants, a grocery store and smaller retail stores (see here and here for details).

The Dearborn Street Coalition has concerns about a number of the project's likely impacts, such as traffic, parking and the effects of the project on unique local businesses, especially those located in the International District and in Little Saigon. Gentrification and the undermining of regional labor standards are also feared. The Dearborn Street Coalition has warned that the high rents likely to be sought by the regional mall will drive out the area's small ethnic businesses. It is also concerned that the retail jobs offered by the new development will be mostly low-paying and/or part time.

In order to address these impacts, the Dearborn Street Coalition and Puget Sound Sage have been seeking to reach a CBA for the community that will ensure the preservation of Little Saigon's character, provide for the development of adequate affordable housing and lead to the creation of accessible, quality jobs. Unfortunately, the developer has not been particularly interested in negotiating. Another organization, Go Dearborn Street!, has also been formed to support the project. It believes that the project, sans CBA, will provide sufficient affordable housing, create a compact, street-scaled urban area, and that "the project could improve the neighborhood's business climate." While this may be true, a CBA would ensure that the community could enforce the developer's promises.

In order to go forward, the project developers need to secure a rezoning to allow large-scale retail stores, in addition to design and environmental approvals. The Department of Planning recently recommended the rezoning from industrial to neighborhood commercial (with a number of conditions), and the City Council will vote on the matter after a public hearing, which will be held on June 9 (see the official notice here).

More information about the project is available here on the city's website, and the draft and final environmental impact statements are available for download here. For news about the Dearborn Street Coalition, make sure to check out their blog.

Update: Puget Sound Sage finalized a CBA for the Dearborn Street project on August 29, 2008. See here and here.

Update: The Dearborn Street project was cancelled in the spring of 2009 due to economic problems. The CBA nevertheless represents a watershed victory. See here.

Small businesses and CBAs

Small, locally-owned businesses can do a lot for local economies. They provide community ties, strenghten community character and keep locally spent money in the local economy. Some commentators believe that they tend to pay higher wages and devote more money to community investments than do larger corporations. Provisions aimed at encouraging small business growth have been included in a number of CBAs:

• LAX: requires the developer to set up a revolving loan program to benefit small businesses.


• Gates-Cherokee: the property may not be used for any commercial establishment larger than 75,000 square feet, effectively prohibiting most big box stores.


• Longfellow: no retail tenant may occupy more than 30,000 square feet, and at least 30% of the retail space must be set aside for local businesses.


• Shaw District: space set aside for local businesses


• Gateway Center: 18,000 square feet of space set aside for existing small local businesses;


• Atlantic Yards: sets aside 15% of gross retail leasing space for community-based business, with a preference given to minority- and women-owned businesses


• San Jose CIM Project: goals of 30% San Jose retailers and 30% regional retailers, with a set aside of 10% of the available retail space for existing small business in the downtown