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Wal-Mart Regroups For Stores in Dallas

DALLAS — As the biggest company on the planet, Wal-Mart isn’t used to getting beat.<br><br>But, as reported last week, the megamerchant’s mighty muscles weren’t strong enough to power its bid to build an urban SuperCenter near...

DALLAS — As the biggest company on the planet, Wal-Mart isn’t used to getting beat.

But, as reported last week, the megamerchant’s mighty muscles weren’t strong enough to power its bid to build an urban SuperCenter near downtown Dallas, close to historic Love Field airport.

Wal-Mart suffered a TKO at the hands of the 15-member Dallas City Council, including Mayor Laura Miller, which rejected “with prejudice” the chain’s plans to open a radical — smaller-scale — new concept store in the Oak Lawn neighborhood here.

Having been defeated with prejudice means that Wal-Mart can’t go back to the council with plans for that site for at least two years.

It was the second time since June that the proposal has been rejected, first before the Dallas Plan Commission, which ruled that the 11-acre tract wasn’t zoned to accommodate the proposed 219,000-square-foot store. Wal-Mart then appealed the zoning law before the Dallas City Council last week, which sided with the Plan Commission.

Before last week’s vote, City Council members asked Wal-Mart to dramatically scale down the project to no more than 125,000 square feet, a size more amenable to the 11-acre tract on Mockingbird Lane. Wal-Mart rejected the suggestion, calling it financially unfeasible. Typical Wal-Mart SuperCenters occupy at least 22 acres of land. While the proposed store’s square footage would be consistent with other SuperCenters, its footprint would be more compact with a design that would include multiple levels.

The packed council chambers overflowed with more than 500 people, and Wal-Mart supporters as well as detractors went on public record in a bid to sway the outcome.

The two-story Spanish-facade store would have been demographically poised to capture dollars from the wealthy Greenway Park and Highland Park neighborhoods that adjoin Oak Lawn, which itself is a dense and trendy enclave that’s home to wealthy young professionals, including one of the nation’s largest gay populations.

Wal-Mart has made no secret of its desire to go after a more upscale customer, where possible (see related story, this page).

Members of the City Council, as well as Mayor Miller, went to great lengths during the vote, though, to let Wal-Mart know that its presence in Oak Lawn and in Dallas was highly prized and urged the chain to find an alternate and much bigger site to build the urban store.

This story first appeared in the November 21, 2002 issue of WWD.  Subscribe Today.

“City Councilwoman Valetta Lill [who represents Oak Lawn] will get in a bus with Wal-Mart officials and drive all over Oak Lawn to help them find a site that’s more suited to a project of this size,’’ said Mayor Miller. “I wish that we had a new shining Wal-Mart in the center city. We want very much for them to be here.’’

Miller has good reason for that sentiment: Dallas faces a $90 million budget shortfall and could use the revenue from sales tax.

As of Tuesday, Wal-Mart hasn’t taken up Miller on her invitation, though a company spokeswoman said the door was by no means closed.

“If there’s something they can produce for us to show us how it can work somewhere else, then certainly we’ll consider it,’’ said the spokeswoman in an interview Tuesday. “We’re obviously disappointed in the City Council’s decision. It had broad implications for the city of Dallas and a simple one, too: to serve a part of Dallas that’s not now served by a store such as Wal-Mart. The issue here is the three-mile radius surrounding the proposed store and the kind of consumers it would have drawn. We don’t think there’s another area that will work in Oak Lawn based on the economics of the project. But if the mayor can bring us something that might work, we’ll take a look. We went through an exhaustive search of properties both available and unavailable before presenting our initial proposal to the Plan Commission earlier this year.’’

Despite the Love Field defeat, Wal-Mart is currently planning to build at least three SuperCenters within the Dallas city limits, though none are close to downtown or close to particularly affluent neighborhoods.

Some observers have wondered if the council’s decision might send a negative message to other retailers considering opening stores in Oak Lawn or other urban Dallas neighborhoods.

“The denial was simply a zoning matter that dated back to 1986. Wal-Mart didn’t fit the requirements for the use of that small parcel of land,’’ said Danny Alan Scott, a commercial and residential real estate specialist with Master Realtors, one of the most prominent real estate agencies in Oak Lawn. “But I think all the council vote and all the negative response from neighbors sends a very strong and specific message to Wal-Mart. I think there might be some consumer mistrust of Wal-Mart and its historic practices and what they might bring to Dallas neighborhoods. Wal-Mart’s stewardship and ultimate good for the community is being questioned. In a less residential area, they’ll get less resistance.’’

Michael Singer, a resident of the tony Greenway Parks neighborhood and a proponent of the Love Field proposal, said: “We’re not antibusiness, antidevelopment or anti-Wal-Mart in Dallas. The proposal didn’t fit the property. It was just a question of proper land usage. There’s a 100,000-square-foot Home Depot right behind the proposed Wal-Mart. But it’s half the size and fits perfectly on the land that it occupies. We want Dallas to benefit from the right store in the right location. What disappointed me was that Wal-Mart sent a message to Dallas that we were inflexible business partners. They stated publicly that they weren’t willing to reduce the size of the store. In business, getting a good deal always means negotiation.”