Wal-Mart in a HOPE VI project stirs controversy

Arguments run hot in New Orleans over plans for a 200,000 sq. ft. supercenter in a public housing redevelopment.

Along-running dispute over whether a Wal-Mart store should be built as part of a 64-acre New Orleans HOPE VI project may soon be decided. As New Urban News went to press, developer Maurice Pres Kabacoff was expecting a ruling from the Louisiana Supreme Court on a suit brought by preservationists and other opponents of the Wal-Mart proposal.

Kabacoff, whose firm, Historic Restoration Inc., has previously carried out ambitious urban revitalization projects in New Orleans, organized plans with the city’s Housing Authority for a $315 million venture that involves development of 1,242 public, private, rental, and for-sale housing units in the Lower Garden District where the dilapidated St. Thomas public housing project housing had stood, plus construction of a 200,000 sq. ft. Wal-Mart store. “Merchants are terrified,” says William E. Borah, one of seven lawyers representing five nonprofit organizations in challenges to the HOPE VI project.

Kabacoff says the store, with an 820-car parking lot, would stand in an industrial area that has contained large blocks of old cotton warehouses, and would not threaten nearby smaller-scale historic residential and commercial areas. He says sales tax revenue from the Wal-Mart would enable his firm to “build nicer houses and discount the prices on them,” thus attracting middle-income people to the site of a housing project that had “19 murders the year before we took it over.” Opponents see a big-box “supercenter” receiving an ill-conceived public subsidy. The US Department of Housing & Urban Development has awarded the St. Thomas redevelopment $28.5 million.

“If Wal-Mart wanted to do a neighborhood-scale market, which they’re doing in six states, that would be fine,” Borah charges. Introducing automobile-oriented development to the city is, he contends, “like bringing in cancer.”

capturing suburban

retail spending?

Kabacoff estimates the Wal-Mart would achieve sales of $100 million a year. Eighty percent of that would be consumer spending that currently escapes New Orleans and its tax system, Kabacoff says. “People are driving to suburban areas and doing their shopping there.” He cites an economic study showing that just $14 million of Wal-Mart’s anticipated sales would come at the expense of large retailers in the city and only $6 million would come at the expense of the city’s small merchants. Besides, he says, customers going to the Wal-Mart would stop at other urban shops to buy things the big store doesn’t sell.

Opponents have lost in federal and state courts, but have appealed to have the decisions overturned. If Kabacoff wins in the Supreme Court, construction could begin in July.