Can the City’s Decision Makers Keep New York Wal-Mart-Free?

There’s been quite a bit of talk in New York recently about Wal-Mart – the big box retailer is resurrecting its bid to open its first New York City store.  Wal-Mart’s earlier attempts to open a Brooklyn or Queens location failed when the store came up against the city’s strong unions – who oppose Wal-Mart’s non-union approach – and a general concern about the effects of the retailer on wages and small businesses.  This time around, the City Council’s Committees on Community Development, Small Business and Economic Development plan to hold a joint oversight hearing on Wal-Mart (scheduled for this Wednesday), and Christine Quinn, the Council’s Speaker, has been quoted as saying, “Wal-Mart is something I am not supportive of.” But can the City Council, unions, or small businesses actually block the store from opening anywhere within the five boroughs?

Unlike some other cities in the US, NYC doesn’t have regulations that prohibit chains.  So why hasn’t Wal-Mart just opened here already, like Home Depot, Costco, Target and several other large chain retailers have before it?  Although these other stores have also faced barriers to entry, particular attention is paid to Wal-Mart, as they seem to rally opposition like no other store.  What’s the source of the legal barriers and the regulatory constraints – and can Wal-Mart be stopped?  The answers to these questions, like so many others, lie partially within the Zoning Resolution.

Much development in New York City is “as-of-right,” meaning that as long as a new building complies with the zoning and building code, it does not need site plan approval or have to go through any special public review process.   In this situation, once the Department of Buildings signs off on proposed plans, a developer is generally free to proceed.  Of course, there are many development projects that need special approvals such as rezonings and/or special permits, and large retail stores often fall into this category.  In many zoning districts, retail stores are only permitted as-of-right up to a size of 10,000 square feet, which is not very large by the standards of many chain retailers, and tiny by big box standards.  If a larger store is desired, a special permit or rezoning is required, which means that the project must go through ULURP – the city’s land use review process.  ULURP requires approval by the City Planning Commission and ultimately, the City Council.  (Special permits and rezonings also are reviewed by the local Community Board and Borough President, who issue recommendations.)  So, if the City Council is opposed to Wal-Mart, and Wal-Mart needs a rezoning or special permit, then what?

A similar issue arose in 2009, when the City Council rejected a proposal to build a mall inside the Bronx’s Kingsbridge Armory.  The Council wanted the Related Companies, who applied for a rezoning to a commercial district to permit the mall, to sign an agreement that would require all future retailers at the mall to pay their employees a “living wage” (defined in this instance as at least $10/hour). Related refused to enter into such an agreement, and the Council voted down the project, 45 to 1.  Although the creation of jobs that pay sufficient wages is a real concern, it’s not specifically a land use issue.  Should the Council have rejected the project on this basis?

The City Council, once they receive a project from the City Planning Commission, frequently addresses all sorts of issues during the land use review process that are not explicitly related to the use of land, since ULURP provides both a platform to raise a variety of issues and a mechanism for change — the Council can kill a project if the issue isn’t resolved, as they did with Kingsbridge.  Some of these issues (like affordable housing) are more directly linked to land use and planning than others.  When a project moves to the City Council during ULURP, is it appropriate for new issues to be considered?  Is the unions / living wage issue relevant enough to land use to be decided during this process, or should it be addressed by the Council or some other appropriate legislative body at another time?

There are a few zoning districts in the city that do permit large retail stores like Wal-Mart as-of-right, including C4, C5 and C6 districts.  In fact, several news sources have reported that Wal-Mart is looking to open its first store in the Gateway II retail complex in eastern Brooklyn, which was rezoned to a C4 district in 2009 in order to permit an expansion of the existing adjacent shopping center.  No additional land use approvals would be needed at this site.

Will this as-of-right location allow Wal-Mart to finally succeed in their bid for a New York City store? Crain’s reports that the City Council may consider implementing new regulations that will require large retail stores to obtain additional approvals, even in those zoning districts that today permit such uses as-of-right (a similar law exists in San Diego).  Such a regulation could require all large retail stores to go through ULURP, regardless of their location within the city.  If such a thing occurs, the shoppers of NYC may just have to use Wal-Mart.com forever.

See also:

NY Daily News:  Quinn tell Walmart it isn’t welcome in New York, cites history of underpaying employees

NYT:  Voting 45-1, Council Rejects $310 Million for Mall at Bronx Armory

Crain’s:  City Council to debate of Walmart in NYC

NY1: Walmart to City Council: Stop Picking on Us