Minimum Wage, part 2: Exhibit A
One of my researchers brought this article to my attention. If you don't have time to read it, let me bottom line it for you: Chicago is trying to pass an ordinace that big-box retailers must pay hourly workers 10.00 plus benefits. Target, whose plans to build there was going to bring rampant growth and jobs to downtrodden parts of Chicago--has put their plans on hold to see if this ordinace passes. Read on:
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Target halts expansion, citing wage measure
(Crain's) — Target Corp. is halting plans for new stores in Chicago in response to a proposed city law that would set minimum wage and benefit levels for employees of big-box retailers.
The decision by the Minneapolis-based discount chain represents a setback for at least two high-profile retail projects in the city that were to be anchored by a Target, one on the Wilson Yard site in Uptown and another next to Interstate 57 in Morgan Park. Target told the developers of both projects last week that it won’t open stores if the law passes.
If Target pulls out, “we’d be at ground zero,” says Arturo Sneider, a partner at California-based Primestor Development Inc., which is building the 443,000-square-foot Morgan Park project. “I don't even want to think about it.”
Target has largely avoided criticism of its wage and benefit policies in the debate over the big-box ordinance as supporters of the measure have focused their ire on Wal-Mart Stores Inc. Both chains aim to expand in cities like Chicago, but union and community activists have made an example of Bentonville, Ark.-based Wal-Mart, which will open its first store here this summer. The city has been more welcoming to Target, which has six stores here and one under construction.
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Target representatives didn’t return several phone calls for comment. A Wal-Mart executive has said the company would drop its plan to open as many as 20 stores in Chicago if the proposed ordinance passes.
The measure would require that retailers with stores of 90,000 square feet or more pay employees who work there at least $10 an hour and provide minimum benefits of $3 an hour. The city council’s finance committee passed the measure June 21 and the full council is expected to vote on it July 26.
Mayor Richard M. Daley has criticized the proposal, but sponsor Alderman Joe Moore (49th) says he has enough votes to pass it and, if necessary, override a mayoral veto. He dismissed Target’s decision to suspend new development in Chicago as an idle threat.
“They obviously couldn’t win the argument on the merits so now they’re resorting to threats and scare tactics,” the alderman says. “Chicken Little is alive and well in the city of Chicago.”
Yet if Target follows through with its threat, it could hamper retail development in neighborhoods that have been largely ignored by retailers. A shopping center is hard to pull off without a large anchor tenant to bring in traffic—and attract smaller retailers.
“If Target goes, the whole thing falls apart because a lot of these tenants are contingent upon Target,” Mr. Sneider says. “It’s kind of like a house of cards.”
For Target, added costs created by the measure “would be sufficient to where this project wouldn’t work out for them financially,” he says.
The city has approved $22 million in tax-increment financing (TIF) for the Primestor project at 119th Street and I-57. Called Marshfield Plaza, the shopping center also would include a Home Depot. The home-improvement chain plans to push ahead with new stores in Chicago despite the proposed wage ordinance, a spokesman says.
Losing Target would be a big blow to the Wilson Yard project, which was supposed to include a 12-screen movie theater until Kerasotes ShowPlace Theatres LLC pulled out earlier this year. The city approved $35 million in TIF subsidies for the project, which will sit next to the Wilson Avenue elevated train station and include an Aldi grocery store and 177 affordable apartments.
“We’re just hoping that some kind of compromise can be worked out,” says Peter Holsten, developer of the Wilson Yard project.
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Target halts expansion, citing wage measure
(Crain's) — Target Corp. is halting plans for new stores in Chicago in response to a proposed city law that would set minimum wage and benefit levels for employees of big-box retailers.
The decision by the Minneapolis-based discount chain represents a setback for at least two high-profile retail projects in the city that were to be anchored by a Target, one on the Wilson Yard site in Uptown and another next to Interstate 57 in Morgan Park. Target told the developers of both projects last week that it won’t open stores if the law passes.
If Target pulls out, “we’d be at ground zero,” says Arturo Sneider, a partner at California-based Primestor Development Inc., which is building the 443,000-square-foot Morgan Park project. “I don't even want to think about it.”
Target has largely avoided criticism of its wage and benefit policies in the debate over the big-box ordinance as supporters of the measure have focused their ire on Wal-Mart Stores Inc. Both chains aim to expand in cities like Chicago, but union and community activists have made an example of Bentonville, Ark.-based Wal-Mart, which will open its first store here this summer. The city has been more welcoming to Target, which has six stores here and one under construction.
Advertisement
Related Article Topics | Related Industry News
Target representatives didn’t return several phone calls for comment. A Wal-Mart executive has said the company would drop its plan to open as many as 20 stores in Chicago if the proposed ordinance passes.
The measure would require that retailers with stores of 90,000 square feet or more pay employees who work there at least $10 an hour and provide minimum benefits of $3 an hour. The city council’s finance committee passed the measure June 21 and the full council is expected to vote on it July 26.
Mayor Richard M. Daley has criticized the proposal, but sponsor Alderman Joe Moore (49th) says he has enough votes to pass it and, if necessary, override a mayoral veto. He dismissed Target’s decision to suspend new development in Chicago as an idle threat.
“They obviously couldn’t win the argument on the merits so now they’re resorting to threats and scare tactics,” the alderman says. “Chicken Little is alive and well in the city of Chicago.”
Yet if Target follows through with its threat, it could hamper retail development in neighborhoods that have been largely ignored by retailers. A shopping center is hard to pull off without a large anchor tenant to bring in traffic—and attract smaller retailers.
“If Target goes, the whole thing falls apart because a lot of these tenants are contingent upon Target,” Mr. Sneider says. “It’s kind of like a house of cards.”
For Target, added costs created by the measure “would be sufficient to where this project wouldn’t work out for them financially,” he says.
The city has approved $22 million in tax-increment financing (TIF) for the Primestor project at 119th Street and I-57. Called Marshfield Plaza, the shopping center also would include a Home Depot. The home-improvement chain plans to push ahead with new stores in Chicago despite the proposed wage ordinance, a spokesman says.
Losing Target would be a big blow to the Wilson Yard project, which was supposed to include a 12-screen movie theater until Kerasotes ShowPlace Theatres LLC pulled out earlier this year. The city approved $35 million in TIF subsidies for the project, which will sit next to the Wilson Avenue elevated train station and include an Aldi grocery store and 177 affordable apartments.
“We’re just hoping that some kind of compromise can be worked out,” says Peter Holsten, developer of the Wilson Yard project.