Wal-Mart Goliath Meets David -- Twice

While Americans' personal income and the US economy as a whole continued to flounder this summer, Wal-Mart Stores, Inc. &endash; the world's largest corporation &endash; saw earnings close to $18 billion in July. That same month, Wal-Mart opened 19 new stores across the US for a total of 2,150 stores nationwide. Add to that figure Wal-Mart's 1,199 international stores in nine foreign countries and it's clear that Goliath is doing quite well.

But here in the sultry, humid heartland, Wal-Mart recently met a couple of Davids.

For the little northeast Iowa town of Decorah, population 8,000, the Iowa Court of Appeals ruled in June that a divided Decorah city council acted illegally when it gave Wal-Mart permission to build a 184,000-square-foot store in a flood plain along the Upper Iowa River. Under this ruling, it may be that Wal-Mart will have to tear down the building already under construction.

"That is the normal remedy, the usual remedy whether it's a garage or a big building," said Karl Knudson, as quoted in an Aug. 1 article in the Des Moines Register. Knudson, an attorney representing Decorah residents trying to block the store, went on to point out that "Sometimes big corporations make big mistakes."

(Sometimes? That may be the understatement of the century. I'm thinking of Enron, WorldCom, Tyco, etc. ... but that's another story.)

Unfortunately, the matter is far from settled. Wal-Mart may file an appeal. The city council could appoint a new member to the board of adjustments who would be favorable to Wal-Mart. In short, it is too early to tell whether or not Decorah's David will come out on top.

Meanwhile, 75 miles to the west in Black Hawk County, residents of Cedar Falls scored a slam dunk over the retail giant. The site chosen by Wal-Mart for a super center had been zoned for mixed-use residential and light commercial development in 1998. The city council wanted to change the zoning to allow Wal-Mart to move in. However, the city planning and zoning commission went along with residents, voting unanimously in June against changing the zoning.

The final show-down came in a meeting on July 23. Residents packed the city council chambers, spilling over into the hallway and a nearby room. In order to overrule the planning and zoning commission, the proposed zoning change would require a 5&endash;1 vote of the city council. After three hours of deliberation, the council mustered only 4 votes in favor of the rezoning, thus marking a rare defeat for Wal-Mart.

After the vote, a Wal-Mart spokesman had the audacity to insist that if other locations were to be considered, taxpayer subsidies would be necessary. In a July 24 article, the Waterloo-Cedar Falls Courier noted, "Roy Covert of Wal-Mart's real estate division said other locations may require taxpayer assistance."

Which brings us to the recently opened Mason City Wal-Mart super center in north-central Iowa. The store's arrival last year in the town of 29,000 people has created major traffic problems, and the city council plans to discuss possible solutions. Incredibly, all proposed options put the cost of fixing the problem on the backs of Mason City taxpayers, not the developer, not Wal-Mart. This, despite the fact that developers promised the project would involve no taxpayer money.

Ah, the free market! If we actually had one, as opposed to the current corporate-socialism that many city council and legislative chambers try to pass off as economic development, small businesses would thrive and the Wal-Marts of the world would go the way of the dinosaurs. Yet since such a policy shift appears slow in coming, we can only hope that more Davids continue to rise to challenge the greedy Goliaths of the world.

Ed Fallon is a state representative and executive director of 1000 Friends of Iowa, a group that promotes responsible land use. Email ed.fallon@legis.state.ia.us or phone 515-288-5364.

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