Walmart vs. Festival Foods - David and Goliath?
Date of this version
Economic impact, discount store, supercenter, upscale store and customers, Tax Increment Financing (TIF), expert testimony
This case describes an actual situation in a suburban Minnesota Shopping Mall where a local mall tenant was forced to react to a proposed expansion of a Walmart store in an adjoining retail location. He needs to consider the possibility of persuading the local authorities to deny permission for the expansion, and if that should not be possible, he must develop a plan to effectively compete with the expanded Walmart supercenter.
Walmart and a local real estate developer have applied to the city council and the zoning authorities in Vadnais Heights, Minnesota, for permission to expand the current Walmart discount store to convert it into a supercenter offering groceries and liquor as well as general merchandise. In addition to competition with the grocery store, a liquor store and the shopping center immediately across the street will be impacted by the expansion. The development would complete the city’s central business district, add tax base and raise the city’s profile, but risk failure of some stores, undermine its Tax Increment Financing part of a shopping center and create more congestion. The city council, especially the mayor, must weigh the advantages and disadvantages of Walmart expansion against its impact on the other stakeholders. There are distinct trade-offs if they were to be allowed to do this.
Journal of Real Estate Practice & Education