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Small businesses protest proposed Sam's Club tax break

ST. PETERSBURG — Despite mounting criticism of a proposed tax break for a Sam's Club that is nearing completion along 34th Street, there is strong support for the perk among City Council members and Mayor Bill Foster.

The eight-member board will vote during an 8:30 a.m. meeting today at City Hall on whether Sam's Club's corporate parent, Wal-Mart Stores Inc., is eligible for the $240,000 tax credit.

"There's no reason to deny them," said Foster. "This is a good project."

Council members would need to classify the 14-acre site on 34th Street as a "brownfield" area, an official designation that means the land is so contaminated — or is at least perceived that way — that tax incentives are needed to entice development. This particular incentive would provide developers up to a $2,500 tax refund for each job created.

But many small business owners are rallying against the proposed break. During a May 17 meeting at the St. Petersburg Main Library, more than 25 residents discussed the project at 1725 34th St. N with city officials and representatives for Wal-Mart Stores Inc. Most of those who attended opposed the break.

"It's unfair," said Catherine Weaver, who owns an art gallery in Gulfport. "This is a multibillion dollar corporation, and it's easy for them to come into town and get this tax break. I'm local, I teach youth, I work hard running a small business, I struggle to maintain what I got, and I can't get this."

Weaver runs a center that teaches young people how to start a business. She said it has been struggling, partly because large chain stores like Walmart and Sam's Club make the idea of entrepreneurship seem far-fetched.

"What good is it to start a business when Walmart can come in and compete against you?" Weaver said. "They dominate everything."

The benefits that Walmart and Sam's Club bring to a local economy are unclear, said Ester Venouziou, a former Tampa Bay Times employee who founded a network for independent small businesses called Local Shops 1.

"The city's providing incentives for any type of job rather than for one that provides a living wage," Venouziou said. "These jobs don't support a family."

She cited an April report by New York City's Public Advocate and the Center for Community Planning and Development at Hunter College that concluded Walmart has a net negative effect on job creation while driving down wages and benefits for workers.

But Walmart spokesman Bill Wertz said the company's stores improve the local economy and are worthy of tax breaks.

"If you look at existing Walmarts and Sam's Clubs, you'll see businesses flourishing in those areas," Wertz said. "Walmart provides good jobs, competitive jobs, that offers benefits to associates."

Developers say the Sam's Club will create 120 jobs, but it's unclear how many of those are full time. Wertz said he didn't know, but said the average wage for a regular full-time associate in Florida is $12.50 an hour.

Walmart is claiming that after it began construction last year, contaminated ground water was discovered. Representatives for the company said chlorinated pollutants came from a nearby dry cleaner.

The Tampa Bay Times sold a portion of that property in December for about $1 million. That land was a grassy field and had never been used for any structure, said Times spokeswoman Jounice Nealy-Brown.

Walmart often builds in areas that get a brownfield incentive. It has been awarded $18 million in state incentives since 2000, mostly for building in brownfield areas, or areas where they later get that particular designation, according to Integrity Florida, a nonpartisan research institute.

But while the state awards the money, it's up to local governments like St. Petersburg to decide if the projects qualify. In 2008, under then-Mayor Rick Baker, the City Council approved expanding a brownfield area so it included a Walmart Supercenter at 34th Street and First Avenue N. As with the current Sam's Club, Walmart officials said the site had polluted groundwater.

That 2008 vote will reap the company a $312,000 refund later this year, according to state officials.

Council member Wengay Newton said he has no problem with approving the break for the Sam's Club.

"Unemployment is so high, this will bring in more than 100 jobs, and that's my rationale for supporting it," Newton said. "They are a good neighborhood partner."

But his colleague, Karl Nurse, said the city shouldn't approve the break because Walmart doesn't need it.

"It requires a company with very deep pockets to do something like this," Nurse said. "It's a scam and Walmart has done this repeatedly across the country. You don't bring in more jobs because other stores get cut back. It doesn't help the city."

Small businesses protest proposed Sam's Club tax break 06/06/12 [Last modified: Wednesday, June 6, 2012 11:46pm]
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