The Walmart Struggle in Baltimore - An Organizer Reflects on Addressing Public Money Giveaways to Corporate Power

The Walmart Struggle in Baltimore - An Organizer Reflects on Addressing Public Money Giveaways to Corporate Power

Last summer and fall the Baltimore CAN Coalition publicly challenged the way economic development is done in Baltimore. Formed by Progressive Maryland, the Coalition had a membership of forty labor, community, and environmental groups. We focused on three things: we worked to raise the job quality standards for the 25th Street Station Development (to include a Walmart and Lowe’s), we fought for a Baltimore City Living Wage for retail companies grossing more than 10 million annually, and we wrote some community standards to insert in the rewrite of the Baltimore City Zoning Code.

The sign-on statement was very general. It said, in part: We call upon the Mayor, City Council, and other elected officials to stand up for Baltimore and expect more from developers, especially those receiving taxpayer subsidies. ... For too long, communities across Baltimore have stood alone against politically connected developers and big-box retailers that disregard the concerns of neighborhoods, workers, and nearby businesses as they apply suburban standards that threaten the urban fabric we value.

In insisting on higher standards from the Walmart-Lowe’s development, we joined with a mostly Hampden-based group, Bmore Local, which had collected petition signatures in support of 13 points for a community benefits agreement which included: a 60% local hire rate, businesses to pay a living wage with health care benefits, a minimum 60% of contractors, and sub-contractors, hired for the demolition, construction and infrastructure improvements and landscaping, be Baltimore City-based firms, 40% of which shall be minority-owned; that the development obtain a minimum of Silver LEED Certification from the US Green Building Council; the creation of public transit friendly facilities including deep curb cuts for bus stops; and that a minimum of 25% of all residential units at the site be designated specifically as affordable housing [NB: The City Housing Department ruled that this development was exempt from the inclusionary zoning law because there was “no city money” in the deal.]

For many, Walmart's abysmal record is well known-- low wages, meager health care benefits, viciously anti-union policies, wage theft, use of tax dodges and tax havens, fines for violating environmental standards, squeezing suppliers, discrimination against women, and many of its employees are forced to use public benefits to supplement their wages. Others, blinded by their attraction to the promise of low prices, rarely question what Walmart executives do to their suppliers, workers in China who make what Walmart sells, or workers who work in their stores.

What is not generally known, however, is how economic development decisions are
made in Baltimore. It was quickly apparent once we began our organizing that the
25th Street Development was pretty much a “done deal.” Negotiations on selling the site and greasing the pathway with City Council and the Planning Commission had been going on for over a year. It was clear that the Baltimore Development Corporation (BDC), the quasi-public body—public only when it wants taxpayer money and private when it comes to oversight and transparency—which promotes and makes economic development deals, was solidly behind the 25th Street Station Project. In addition, Rick Walker and his development team had been meeting with
neighborhood groups since late 2009—just after the site was approved by Baltimore City Council as a Focus Area under the Maryland Enterprise Zone legislation administered by the BDC. This designation gave the project an 80% state property tax credit for 10 years for any new improvements to the current site. Under this legislation, the development pays only 20% of the property tax and the state reimburses the city for approximately half of what it loses. We estimated the loss in property taxes to the state and the city would be a minimum of 10 million dollars over a ten year period.

The neighborhood groups, although sincere in their efforts and hard working, largely concerned themselves with issues of design and traffic. From our perspective, they did not advocate for job quality standards and, though the development would be close to the Jones Falls, they seemingly did not keep a close eye on environmental issues. For example, these neighborhood groups did nothing to oppose 25th Street Station request to be grandfathered in to the old (2000) Maryland storm-water management law. In February 2011, when the 25th Street Station Development, a so-called “green” development, filed a waiver to be exempt from the 2007 Maryland Storm-Water Management Law and instead use the minimal requirement of the old 2000 law, an outstanding environmental blogger writing under the name of Baltidome commented: "The planners made a conscious decision to shoot for grandfathering, rather than compliance, and with Jon Laria as their lawyer, top campaign contributor to Martin O’Malley’s campaign, and Maryland Sustainable Growth Chair, they appear to have an ace in their
pocket.”

Baltimore used to be a strong manufacturing city with many good union jobs. These jobs began moving out—down South first and then overseas—in the ‘60s and ‘70s. What has driven the economic development agenda in Baltimore since then is a combination of attracting tourists and conventions (the prime example being the development of the Inner Harbor and state-subsidized sports stadiums with restaurants and shops to complement the hotels), and a focus on luring mobile capital to a downtown “corporate center." ­­ These are mainly white-collar businesses, such as investment and banking, as well as high end services which cater to them. The other thrust of the development has been a push to increase the
residential tax base through the construction of expensive housing mainly around the water and in formerly working class areas near the Harbor—Fells Point, South Baltimore, Tide Point, the East Harbor and Canton coupled with a push to grow retail services in these gentrifying areas.

In the 1970s, when William Donald Schaefer was Mayor, he built an infrastructure for economic development that was essentially shielded from input by taxpayers, voters and the City Council, in the form of “quasi-public corporations,” a process which allows land and capital to be assembled without competitive bidding or public disclosure, of which BDC is one example. Mayor Schaefer established these bodies specifically to reduce citizen input. Although the business community has argued that to be successful,these economic deals have to be done in secrecy, the problem with this lack of transparency is that the public has neither the ability
to weigh in on the use of tax-payer dollars nor the ability to truly set the standards by which public dollars are used.

A report released in 2002 by a research team at Good Jobs First, states, in part: “An analysis of Baltimore’s economic development efforts reveals a recurring history of high costs, low benefits, and a lack of safeguards to ensure that taxpayer
investments really pay off in family-wage jobs and an enhanced tax base. Unlike most states and many big cities, Baltimore has no job quality standards, or laws
requiring subsidized companies to pay a certain wage or to provide healthcare. The pattern is especially troubling today, as the city increasingly employs local tax expenditures—foregone future revenues—instead of federal or state dollars to finance development deals." Things are no different now, almost 10 years later.

If we did an analysis today of where most of the special tax districts have been created or tax deals have been offered, we would conclude they are largely areas meant for gentrification and seldom support revitalization in our neighborhoods. The two largest TIF (Tax Increment Financing—a public financing method used to subsidize development) districts currently in the city are the Paterakis (H&S Bakery) development at Harbor Point and the Turner Development on the Westport waterfront. Another area receiving public dollars—a total of $212.6 million of
federal, state and city taxpayer funds, is the East Baltimore Development Inc (EBDI) project north of Johns Hopkins Medical Institutions.

As Baltimore CAN often said when demanding a guarantee of a certain percentage of full-time jobs with benefits and to raise the starting pay, we cannot grow our city on part-time minimum wage jobs. Too many of Baltimore’s working people are currently holding 2 and 3 part-time jobs just to make ends meet. The experience of the United Workers Association is instructive here. They have been organizing
workers at the Inner Harbor for three years and are making visible incredible worker abuse, including wage theft and sexual harassment.

At the July 22nd hearing on the Living Wage bill in front of the Council’s Labor Sub-commiittee, chaired by Warren Branch from the 13th District, the list of opponents read like a who’s who in business and commerce in our city, with the dominant argument being that the economy will not support raising worker’s
wages. Testimony against the bill included comments like “this bill is a holocaust to the retail industry,” “a living wage law would reduce job opportunities for low skilled workers,” “if we raised wages county people wouldcome in and take the jobs,” and “a living wage bill would imperil the future of the 25th Street Station project.” Over 80 supporters turned out for the hearing and dozens gave stirring
testimony about the need to raise the standards for Baltimore’s workers. Bishop Doug Miles, a leader in BUILD which had championed the first living wage law in the country (applying to city sub-contractors) put the debate into historical context of the 1994 Living Wage fight. Referring to the creation of retail jobs at the Harbor in the mid 1970s, he said: “But 20 years later, you had people showing up in soup kitchens who worked in the Inner Harbor. We were told nothing could be done to help such workers that would not hurt Baltimore’s economy. We did not believe it then and we do not believe it now.”

The bill died in the Labor Committee with vote of 1-1. [Branch voted no, Conaway yes with D'Adamo absent.] The champion of the bill, Councilwoman Mary Pat Clarke of the 14th District, has subsequently worked to get it out of committee, but is one vote short of having it considred by the full Council.

In our organizing to raise the standards for the 25th Street Station Development, we used a variety of tactics: rallies at the Planning Commission hearing and at City Hall, e-mails and phone calls to City Council, neighborhood canvassing, media op-eds, and press conferences. We lobbied hard for amendments to the Planned Unit Development (PUD) to include job quality and environmental standards but we were repeatedly told by city officials and its legal department that this was only a zoning issue and our concerns could not be addressed in this legislation. Our final rally included a “Waltopus,” replete with pictures of the four Walton family members who are on the 10 richest Americans list and their net worth, and the presentation of a one penny award to Baltimore City for being the “easiest city to come into.” We had learned that both the developer and Walmart operatives told city officials and a small businessman that we were the easiest city they had ever tried to come into.

A huge challenge we faced was the lack of information people had about how economic development is done in the city, how public dollars are used to grease these development deals, and how the city’s desperation for jobs leads to an “any job is just fine” mantra. Another hurdle we encountered was something called Councilmanic courtesy. This is the system where the Councilperson in whose district the development is located calls the shots once the “details of the deal” are revealed to them by the BDC. So in the case of 25th Street Station, everything went through District 7 Councilwoman Belinda Conaway. At one point she did try to get a wage deliverable from Walmart but they would only talk if she dropped her support for the living wage bill which she did not do. When the final vote on the Planned Unit Development (PUD) comes, the lead council person can “release” another council rep from having to vote yes. As it was explained, this procedure is necessary because this unwritten agreement by Council members to pledge support to each-other’s “projects” keeps the Mayor from treading on their district decisions.

Among the things we did accomplish:

* We shifted the public conversation from "what a wonderful development the 25th Street Station project would be" to "we need development that is better than part-time minimum wage jobs; jobs where people can fully support their families". We also raised awareness on how economic development plays-out in the city.

• We successfully countered the narrative—“there’s no city money in this development” —by publicizing the 10 year/10 million dollar property tax break and contending that the city will spend untold amounts on infrastructure improvements
(certainly beyond what the developers have pledged to pay the city).

• We won several very small amendments to the PUD: that the Department of Pub-
lic Works has to report to City Council on 25th Street Station’s storm-water management plan; similarly the Director of Housing must report on the green building requirements and the Department of Transportation must report to the City Council for five years on the cumulative costs of traffic mitigation (costs borne by the city and developer).

• We introduced testimony from Stacy Mitchell of the Institute for Local Self- Reliance which pointed out that the 25th Street Station economic impact study did
not discuss potential jobs lost due to local

• We raised awareness about initiatives in other cities—for example, in Southern California cities must engage impartial, outside, experts to report on the economic impact of large developments. In Chicago, a transparency law was passed in 2009 which requires the city to post economic development agreements on the city’s website. Many cities have “claw-back” provisions where public money must be paid back if the jobs promised are not created.

Interestingly, the only Council member to abstain on the final vote on the Planned Unit Development for the 25th Street Station project, Carl Stokes, announced he was creating a task force to study the process of economic development in the city. This Task Force has held four meetings and will soon publish a report with recommendations. Councilman Stokes held a hearing on March 30th to explore questions about the EBDI development raised by a series of articles in Daily Record. Our coalition believes that there should be additional public hearings held so that Baltimore residents and tax-payers can weigh in on what standards we expect from economic development deals in the future.

But the overall fight—to stop the use of tax-payer subsidies for big developers with-
out any accountability or strong job, environmental and community standards—will take an extended campaign with a strong organization which can do the research, develop the strategy (with a power analysis), conduct a far-reaching public education campaign and organize a solid base in Bal-
timore’s many constituencies. We need an organization in Baltimore that builds community power to put forward an economic development agenda with vision—an agenda which would include jobs with a family supporting wage, including union jobs, affordable housing, access to health care, quality public education, racial justice, immigrants’ rights and environmental stewardship for
Baltimore’s people. The organization, most likely a coalition of faith, labor, civil rights and community groups, would need a capacity for collective action in order to fight for this agenda.

Sources and links:
Baltimore CAN: baltimorecan.net
Bmore Local: bmorelocal.net/wp-content/uploads/2010/04/Proposed-CBA-List-
Items-for-PUD-Final.pdf

Baltidome: baltidome.wordpress.com/2011/02/03/green-walmart-project-represented-by-state-sustainable-growth-chair-seeks-stormwater-law-waiver/
Levine, Marc. “Downtown Redevelopment as an Urban Growth Strategy: A Critical Appraisal of the Baltimore Renaissance,” Journal of Urban Affairs, Vol. 9, #2, 1987.
Good Jobs First Report: Subsidizing the Low Road: Economic Development in Baltimore, October 2002 www.goodjobsfirst.org/sites/default/files/docs/pdf/balt.pdf
Daily Record EBDI series: thedailyrecord.
thedailyrecord.com/too-big-to-fail-betting-a-billion-on-
east-baltimore/

United Workers: www.unitedworkers.org

QUESTIONS TO CONSIDER

Would stronger investment targeted to human capital and transportation have changed the economic development landscape so that in 2011 we would not be selling out for just any jobs?
What if Baltimore pursued a light industry strategy—using our supply of vacant factory buildings—instead of focusing on tourism and gentrification?
If there were a city-wide citizen debate on the goals of economic development, could we set some real standards for the city’s growt