Study Says Supercenter Would Benefit City

A study on the potential economic impact of a Wal-Mart Supercenter showed the City Council a glass half full in a report and presentation March 24.

The short conclusion from Vierbicher Community Planning manager Ken Maly and associate Paul Hampton was that a Wal-Mart Supercenter would be a positive economic investment for the Sturgeon Bay community. Vierbicher Associates, Inc. of Madison, began the study in 2008, gathering data from interviews, surveys and focus groups of city business owners, residents and government officials.

“The proposed Supercenter would be a major regional draw,” Hampton told the council. “The currently leaked sales total $48 million. If Wal-Mart can expand their trade area to capture Algoma, they could capture $19.5 million of new general retail spending potential.”

The proposed Supercenter would create a new store of 148,746 square feet, with 61,610 square feet of retail sales area and 22,420 square feet of new grocery area. The existing store is 67,357 square feet. Gathering of sales data about Wal-Mart was difficult for Vierbicher, according to city Community Development Director Marty Olejniczak.

“There were many times when Wal-Mart didn’t cooperate, and Vierbicher had to get data from other sources,” Olejniczak said. “Wal-Mart didn’t want to submit some of their sales data without confidentiality, which [Vierbicher] couldn’t do.”

New shoppers would come from an expanded trade area, which Maly and Hampton optimistically projected would stretch up to Egg Harbor and down to the county line for groceries, the whole peninsula for retail, as well as Kewaunee County with Algoma. Vierbicher said their study led them to conclude that the proposed Supercenter would draw a percentage of shoppers out of their Green Bay big box shopping habits because Sturgeon Bay is closer.

Alderman Jim Michaud, running for re-election in District 3 April 7 against John Lodl, said he thought it was a long shot for Wal-Mart to change shoppers’ habits. Michaud owns the Superior Resource Group, a company that does contract engineering. He expressed concerns about information in the study that relied on one percent annual housing growth in Door County.

“Are you really going to attract as many people as they predict from Algoma?” Michaud asked. “[Vierbicher] also relied on about 120 new homes per year being built in the market area for the next 20 years. Sturgeon Bay had no new growth last year, and I’m sure we won’t have very many this year, so it will be easy for the city to get behind on [Vierbicher’s] predictions.”

Lodl agreed with Michaud on the remote possibility that the proposed Supercenter would be able to draw as many new customers as the study predicted.

“I would guess that if people are leaving Algoma to do shopping, I would guess that they’re heading to Green Bay to hit it all in one trip,” he said. Lodl works as a letter carrier for the U.S. Postal Service in Sturgeon Bay. He said he was not impressed by Wal-Mart’s business philosophies and theories, but was torn on the potential tax revenue the Supercenter could bring to the city.

“Wal-Mart tends to do things that try to influence people to their philosophy of things,” Lodl said. “When they were lobbying to expand, they went through quite a bit of loading up the store, putting things in the aisles. The majority of people I’ve talked to on the campaign trail are in favor of having Wal-Mart expand. In that light, I am in favor, and wouldn’t oppose them expanding. It would benefit the city tax base.”

An expanded Wal-Mart may benefit the city tax base, but the much larger building would also necessitate utility and infrastructure upgrades, some of which were detailed in the Traffic Impact Analysis completed by Traffic Analysis & Design, Inc. in November 2008. In conjunction with building expansion, the traffic analysis projected that either a traffic light or roundabout be constructed at the intersection of Egg Harbor Road and Alabama Street. Sidewalks and bike lanes would also be required to and from the Supercenter and within the center lot. The study predicted that within five years, the city would need to add traffic signals or roundabouts at the intersections of Egg Harbor Road and Peterson Road/14th Avenue, Egg Harbor Road and Hwy 42/57, and Alabama Street and Hwy 42/57. The improvements at the highway and city intersections would most likely be completed by the Wisconsin Department of Transportation as part of the state’s planned improvement project of the highway.

In addition to street and traffic flow improvements, Sturgeon Bay Utilities (SBU) predicted that the proposed Wal-Mart Supercenter would be the final straw that would necessitate a new water tower on the northeastern side of Sturgeon Bay, an estimated $960,000 project.

The city could also lose one or both grocery stores and their jobs. Vierbicher predicted that either Econo Foods or Pick ‘N Save would go out of business with the addition of the Supercenter grocery. Wal-Mart representatives previously said the new store would employ 150 people. Accounting for the loss of at least one grocery store and other retail businesses, such as Bay Pharmacy, that could be heavily affected by the Supercenter, Vierbicher predicted a net of 20 to 50 jobs after five years.

Alderman Ben Meyer said one his most significant concerns with the Supercenter was the possibility of losing a grocery store. If Pick ‘N Save closed, it would leave the city with two large, empty buildings as a prominent eyesore.

“Vierbicher was showing that in the long term, the grocers can be re-developed into other needs, such as a senior center, which isn’t too far-fetched from the county’s standpoint,” Meyer said.

Meyer is employed by Bjorklunden. He also serves as county supervisor for District 7.

Opposing Meyer in the race for District 1 Alderman is Dan Wiegand, an employee of Witt Peninsula Ford. He said he was not surprised by the results of the Wal-Mart study.

“A grocery store will go out of business with the construction of a Supercenter, unless they come up with a niche-type sales effort,” Wiegand said. “What do we do?”

Maly and Hampton said their research determined that 69 percent of the goods sold by the proposed Wal-Mart Supercenter are already offered by existing Sturgeon Bay retailers. Their recommendation for Sturgeon Bay businesses was to find a revenue niche that Wal-Mart wouldn’t have and bank on that.

“We’re going to cannibalize a grocery store in order to make [a Wal-Mart Supercenter] work for them,” Michaud said. “I don’t like government being involved in telling a business what to do. But at the same time, this is a small town, and these are quality of life issues. I would like to see Wal-Mart scale down the project and cut down on the grocery store size.”

The next step in the process is up to Wal-Mart, according to Olejniczak. The retailer must first apply to change the zoning of the Georgenson property (behind the existing Wal-Mart) from agricultural to commercial. Then, Wal-Mart must apply for a conditional use permit for a large retail store. Both applications must go through the city Plan Commission; the rezoning must be reviewed by the Plan Commission, go through a public hearing and then on to the city council for approval or denial. After the property is rezoned, the conditional use permit for the building expansion is reviewed and decided on by the Plan Commission.

For the complete Economic Impact and Traffic Impact analyses, visit the City of Sturgeon Bay Web site at http://www.sturgeonbaywi.org.