Thursday, July 13, 2006

Target halts expansion, citing wage measure

This proposal seemed to be targeted (pardon the pun?) at Wal-Mart but since this also affect other big box stores. It appears that this proposal for a living wage may help to prevent other establishments from opening up new stores in the city. I think such a proposal will just as easily hurt those struggling areas which could use jobs from big box retailers.

Four years ago Target opened a store at 87th and Cottage Grove and it appears that they might be building a store off I-57 near Morgan Park according to this Crain's article. It would be unfortunate if this falls through. Check this out...
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.
I hope this doesn't get passed though this will make for an interesting discussion.

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