Wal-Mart in New Ulm draws concerns

By KURT NESBITT

Journal Staff Writer

NEW ULM -- A group of local business owners is calling for a grass-roots effort to study and promote greater awareness of the potential effects of a Wal-Mart store on New Ulm.

Wal-Mart, the country's largest retailer, announced in mid-July that it is interested in putting a store in New Ulm.

About 80 people -- including several local business owners, Chamber of Commerce representatives and New Ulm city officials -- gathered at Turner Hall on Tuesday night to talk about the announcement and what its ramifications for New Ulm and area towns as well as share information about Wal-Mart.

According to Renee Retzlaff, several phone calls were made to city officials after rumors surfaced that the New Ulm Economic Development Corporation was looking into selling some land to a "big box" retailer. About 20 downtown retailers signed a letter to NUEDC, urging the corporation to consider any such deal carefully.

Duane Lambrecht, a representative of the NUEDC, said the corporation had some questions about the possibility of a Wal-Mart regarding the size of the proposed store and whether it is appropriate to use the newly-zoned industrial park for commercial use. He said NUEDC decided to recommend not to rezone the park.

"We have no relationship with Wal-Mart at this point," he stated. "But that won't stop them if they want to come in."

A company representative has said that Wal-Mart plans to build a 203,000-square-foot store in New Ulm -- twice the size of either Kmart or Target.

The goal of the New Ulm store would be to relieve pressure on a Wal-Marts in Redwood Falls, Mankato and Hutchinson, according to Wal-Mart representative John Bisio.

The proposed market for the New Ulm store would be a parallelogram from Fairfax to Comfrey, from Fairfax to halfway between Winthrop and Gaylord and from that point southwards to Lake Crystal and from Lake Crystal to Comfrey.

"The money's going to come from the surrounding communities," Retzlaff said. "Basically, that's Sleepy Eye, New Ulm, Courtland, Searles, Hanska and Comfrey. This will have a major impact on the Sleepy Eye and New Ulm markets. We have verified that Wal-Mart won't go into a community unless it can make $800,000 a week."

Retzlaff also said that Wal-Mart expects to generate $75,000 in local sales tax and $2 million in state sales taxes.

"That's not new money," she said. "It'll just move it around."

New Ulm City Council President Dan Beranek repeated remarks made earlier, reiterating that "this is a time I've feared for 20 years, and I still fear Wal-Mart. Usually, when a new business comes to town, people are happy except when Wal-Mart comes. When Target came to town, there were other business owners who wanted Target and there have to be reasons for that."

Beranek said that he and City Councilor Clark Tuttle attended meetings with Bisio. He indicated to Bisio that they didn't feel there would be enough votes on the council to rezone the industrial park and so Wal-Mart may be looking farther west, possibly outside city limits.

"What do we say if landowners decide to annex? That puts us in a touchy spot because it's pretty hard to tell a landowner 'No, you can't come into this town,'" Beranek said. "I don't know if it would be wise to try and stop it and I'm uncertain of the legal maneuvers that could be made. I have not doubt that Wal-Mart has been in the courts before and they've won and lost. ... This is not going to be easy to get through and I don't know how long this will last."

Former New Ulm Middle School teacher and tennis coach Pat Reedy said, "I've never felt so heavy and important moment as this evening. I believe we can change people's opinions with new information. Everyone has a belief about Wal-Mart that comes from television. They're slashing prices, so why is that not a good deal? There's nothing wrong with that, there's just not enough information on the whole picture."

Reedy said he's concerned because a few of the non-profit groups he belongs to have cited Wal-Mart as a "horrendous corporate neighbor." He pointed to a 13-year study done on the effects of Wal-Mart in Mississippi that concluded that such a store will mean a considerable loss for other businesses. He noted another 10-year study done in Iowa that found massive closures of grocery stores and other businesses around Wal-Marts although two areas -- restaurants and furniture stores -- do well around Wal-Marts.

Reedy said since Wal-Mart's pay and benefits are so low, the public could end up picking up the tab. He noted a 2004 study done at the University of California-Berkeley that found that Wal-Mart employees' heavy reliance upon the welfare system amounted to a public subsidy to the company.

Reedy reiterated the need to do more research and said he doesn't think the Wal-Mart issue is a 'done deal'

Skillings Technology owner Bob Skillings said he doesn't think Wal-Mart will affect his business directly because his niche is service. However, he is most concerned Wal-Mart's effects a store will have on his retail customers, who could be going out of business. He said that the New Ulm Chamber of Commerce is forming a commission of retailers that will help ensure the vitality of downtown retail businesses.

Jackie Hutchens, owner of Lifetime Eyecare Center in Sleepy Eye, said that some people "need to realize they're not safe" and called Wal-Mart a 'juggernaut' to the applause of those who attended the meeting.

Tom Edwards, a New Ulm resident and college professor in Mankato, said that he has followed Wal-Mart ever since it moved into a small town outside Fort Knox in Kentucky, where he once served during his career in the military. He said the town near the Wal-Mart, Radcliff, lost its grocery stores, its pharmacies and most of its "mom-and-pop" businesses.

"Rural Minnesota is very over-built retail-wise. You all known that," he said. "But this can't just be New Ulm; it needs to be Brown County, Nicollet County and Watonwan County. There is too much evidence, too many studies to show this is just a fluke."

Retzlaff said that Wal-Mart sometimes underprices its competition until that competitor goes out of business and then raises its prices again.

New Ulm City Councilor and Valley Bank and Trust representative Sharon Weinkauf said that business failures affect an entire community.

"Try to share that with your neighbors who don't understand anything but low prices," she said.

New Ulm Chamber of Commerce Director Chris Hiller said the chamber "has probably the touchiest position in the community at this time." He said the chamber is trying to find as much information on Wal-Mart as possible and added that chamber members are on both sides of the Wal-Mart issue. He said the most defining comment of the evening was one that stated "We're not sure where we're at, but there are some facts that are not being addressed."

"We need to do careful research," Hiller said. "The (Chamber of Commerce) board's position is that we definitely need to be a clearinghouse even though the rumor mill is going to break in 900 different directions, particularly after tonight."

Donna Lambrecht, co-owner of Lambrecht's and the Christmas Haus, said business leaders should look to other communities like Redwood Falls for insight into the effects Wal-Mart can have. Her husband, Curt Lambrecht, later added that some communities have positive feelings towards Wal-Mart stores, but those tend to be communities that are trying to be regional service centers.

"If you're a Mankato or Owatonna, that's good for you," he said. "But with New Ulm's location, that's not possible when we have Wal-Marts all around us. The reality is that the people Wal-Mart brings to town already have one within 30 minutes of where they live. The money will come from within the area. I would challenge the Chamber to take a stand and as we gather information, the Sleepy Eye Chamber needs to do so as well."