Opponents David Catania (left), Muriel Bowser and Tommy Wells confer as… (Bill O'Leary/The Washington…)
D.C. lawmakers gave final approval Wednesday to a bill requiring some large retailers to pay their employees a 50 percent premium over the city’s minimum wage, a day after Wal-Mart warned that the law would jeopardize its plans in the city.
The retail giant had linked the future of at least three planned stores in the District to the proposal. But its ultimatum did not change any legislators’ minds. The 8 to 5 roll call matched the outcome of an earlier vote on the matter, taken before Wal-Mart’s warning.
“The question here is a living wage; it’s not whether Wal-Mart comes or stays,” said council member Vincent B. Orange (D-At Large), a lead backer of the legislation, who added that the city did not need to kowtow to threats. “We’re at a point where we don’t need retailers. Retailers need us.”
Whether or not Wal-Mart needs the District, it had spent the past three years wanting to enter the city in a way no other business had. Activists celebrated Wednesday’s vote, saying the company, which reported net income of $17 billion on sales of $470 billion in its most recent fiscal year, could afford to pay better wages. But the council action threatens to halt several developments anchored by Wal-Mart in neighborhoods long underserved.
“Nothing has changed from our perspective,” Wal-Mart spokesman Steven Restivo said in a statement after the vote, reiterating that the company will abandon plans for three unbuilt stores and “review the financial and legal implications” of not opening three others under construction.
The company’s strategy had to this point been calibrated to avoid political conflicts in a city of liberal sentiment, where the retailer’s earlier entreaties had been met with deep skepticism.
Well before it had any solid plans to open stores in the District, Wal-Mart joined the D.C. Chamber of Commerce and began making inroads with politicians, community groups and local charities that work on anti-hunger initiatives.
The campaign was matched with cash. Through its charitable foundation, Wal-Mart made $3.8 million in donations last year to city organizations including D.C. Central Kitchen and the Capitol Area Food Bank, according to a company spokesman. Meanwhile, it has kept a prominent local lobbyist, David W. Wilmot, on a $10,000-a-month retainer to smooth relations with elected officials.
The company has not disclosed what it has spent on plans and designs for its six D.C. stores, but development and retail experts say it is probably in the hundreds of thousands of dollars and possibly as high as $1 million per location. Some of the stores have undergone major design changes since they were first announced.
Should the bill be signed by Mayor Vincent C. Gray (D) and pass a congressional review period, retailers with corporate sales of $1 billion or more and operating in spaces 75,000 square feet or larger would be required to pay employees no less than $12.50 an hour. The city’s minimum wage is $8.25, a dollar higher than the federal minimum wage.
The vote sets up a high-profile veto decision for Gray, who has supported Wal-Mart’s entry into the city, arguing that the company would bring badly needed jobs and retail stores to neighborhoods in need of both. The three stores that the company has pledged definitively not to pursue are all in the city’s eastern half, in areas largely devoid of quality retail.
Gray made a particular push to have Wal-Mart anchor a development at Skyland Town Center, a site along Alabama Avenue SE near the mayor’s home that has long been eyed by city leaders for renewal.
Gary D. Rappaport, the project’s developer, has said Wal-Mart’s withdrawal would put those plans on ice. “If there’s not a Wal-Mart at Skyland, then Skyland is not able to go forward at this time,” he said late Tuesday.
The mayor initially called Wal-Mart’s announcement of its ultimatum “immensely discouraging” and said much the same in a letter to council members delivered Wednesday morning. “It is clear that numerous issues remain unclear about the impact of the bill on the District’s current economic development renaissance,” he wrote.
Gray, who has met recently with Wal-Mart representatives, reiterated “serious concerns over the lost jobs and retail opportunities for District residents that the bill will cause,” in a statement released after the council vote.
Before this week, Wal-Mart had made statements opposing the bill but had not directly threatened to withdraw from its plans.
Seven years ago, when the retailer moved to open its first store in Chicago and the City Council there passed a similar “living-wage” measure, the company indicated then that the bill would cause it to scale back or entirely scrap its plans to open several stores, Mayor Richard M. Daley vetoed the bill, and the council failed to override it.