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Professor aids city planning in the Central Valley

August 30, 2005

Photo of Philip KingA little more than a year ago, Jim Watt, then a Save Mart Supermarkets vice president, was concerned about proposals to build Wal-Mart stores not far from his own stores in the Central Valley.

He suspected that the new stores would drive his and other existing stores out of business, leaving behind empty strip malls. Watt looked to Philip King, an associate professor and chair of SF State's Economics Department, for a clear assessment of the potential impact.

For the past two years, King, who commutes to SFSU from his home in Davis, has researched the implications of regional Wal-Mart store proposals as a paid consultant for cities and towns throughout the Central Valley. He interviews local business owners and residents and analyzes environmental impact reports, which provide a detailed review of a proposed project, including its potential adverse environmental effects. King then presents his findings at city council meetings.

Watt, who has since retired from Save Mart, still aids King in his work as a watchdog for community development.

"He has better credentials than I do, but I know more about the industry," Watt said. "Put the two together, and we've got a credible report to give to community leaders."

To date, King has reviewed and critiqued plans for about a dozen Central Valley Wal-Marts, including proposals in Chico, Bakersfield, Lodi, Stockton, and Tracy. While no plans have officially been halted, several are on hold pending litigation, King said.

In his research King determines how much sales tax revenue could be generated by a new Wal-Mart store and how much of that money would benefit a local community. Cities and towns that allow a Wal-Mart to come in and build a store stand to receive an average of $500,000 to $600,000 in annual sales tax revenue, money that can be spent on hiring more police officers, and improving roads or public parks.

King also evaluates the likelihood that these new stores might cause smaller businesses to close and leave vacant buildings or strip malls, and whether such closures could cause physical deterioration and urban decay. A Bakersfield court -- using California Environmental Quality Act guidelines -- determined recently that physical deterioration and urban decay is an environmental impact that needs to be assessed, King said.

After researching a Wal-Mart Supercenter proposal in Stockton, King concluded that the new store could cause as many as five supermarket closures. The stores were already performing poorly, and the competition would be too much for them to keep up with, King concluded.

During his research into a store proposal in the Lodi area, King learned that many downtown businesses, including grocery stores and a pharmacy, were already struggling to stay in business. King estimated that a new Wal-Mart Supercenter would likely close many of those stores. Too many existing store closures can leave behind empty buildings, and those empty buildings can contribute to physical deterioration and urban decay, King argued in both cases. Both cases are pending litigation, King said.

King said that his consulting work on Wal-Mart cases has changed his approach to teaching at State. In the classroom he focuses more on how economic changes affect people's daily lives.

"[My work as a consultant] has increased my awareness of how critical it is to collect and analyze even the very basic data," he said.

-- Student Writer Gary Moskowitz with Adrianne Bee


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Last modified August 30, 2005 by University Communications