Egg Harbor, N.J. Township Offers Wal-Mart A $4.5 Million Bailout Suing His City Over Wal-Mart Approval

Sprawl-Busters Newsflash Blog, November 15, 2010
It’s not fair to make Wal-Mart pay its full property tax bill-so officials in one New Jersey township have decided that its reasonable to give Wal-Mart a multi-million welfare subsidy to build a superstore. To make matters worse, the bailout comes at the expense of their local school children.
On November 15, 2009 Sprawl-Busters reported that Wal-Mart was trying to crack into Egg Harbor, New Jersey, population roughly 40,000 people.
Located in Atlantic County, Egg Harbor is approximately 7 miles from Atlantic City. According to The Press of Atlantic City, Wal-Mart has been trying to break into Egg Harbor since 2004. The site that Wal-Mart wants in Egg Harbor is the former home of the Atlantic Electric Company. A 188,759 s.f. Wal-Mart superstore was submitted by the retailer. A spokesman for Wal-Mart told the Press that Wal-Mart planned to use the 35 acres for a superstore.
Local officials see the proposed store as part of their economic future. “Any new development that happens in the area is a major plus,” said the chairman of the Atlantic County Economic Development Council. “We haven’t seen anything like that in a few years.” The utility company has a buy/sell agreement with Wal-Mart, which has been in place for five years, when the township’s Planning Board approved Wal-Mart’s plan.
But the project came to a halt when the New Jersey Department of Transportation (DOT) wanted some major roadway changes made, including creating a new public access road to the store. In August of 2009, the state DOT gave the Wal-Mart plan conceptual approval. The developer has resubmitted new plans for a project called the Oak Tree Plaza, and added a new public access road.
In addition to the Wal-Mart supercenter, the plan called for two other retail buildings at 18,000 s.f. each, a 4,000 s.f. bank, three fast food restaurants and one sit-down restaurant. The lawyer for the developer said the project “will provide a vibrant commercial center which will create new jobs and add to the tax ratable base.” When the plan came before the township’s Technical Review Committee in 2009, the project was deemed incomplete. The committee asked the developer to create more of a buffer zone for the residential property that abuts the project, the London Court Condominiums.
This week, almost exactly a year later, the project was back in the headlines. A revised plan for the Wal-Mart Supercenter was submitted to the Egg Harbor Township Planning Board—only seven miles from another planned Wal-Mart Supercenter on the Black Horse Pike in Hamilton Township, which is an expansion of a Wal-Mart discount store into a supercenter.
The Hamilton Township store was the subject of lawsuit by opponents, which ended this year when a judge ruled in favor of the township’s Planning Board. “Having the stores so close to each other might be a bit overkill, but it’s better than not having one at all,” one customer told The Press of Atlantic City. “It’s going to make things a lot more convenient and, quite honestly, having a Super Walmart here could also cause some of the other stores nearby to start being more competitive with their prices.”
Six years ago, Egg Harbor township approved a Wal-Mart at this site, but the retailer needed state approval from the New Jersey Department of Transportation for a traffic signal on the Black Horse Pike, and Wal-Mart also would have been required to construct a public access road connecting to Old Egg Harbor Road-and maintain that road at company expense. State approval dragged on for 4 years, and Wal-Mart ended up have to shrink the size of its store.
The Mayor of Egg Harbor, James “Sonny” McCullough, is welcoming Wal-Mart to his community—mostly for financial reasons. He believes that Wal-Mart will generate $1.3 million in property taxes, of which $226,000 will go to the township, and the rest to the school district, according to the newspaper. But that figure clearly is a gross figure, and includes none of the offsetting costs of police, fire and other municipal services, plus the lost ratable from other area business that will close or curtail their business.
“It becomes a new ratable,” the Mayor told The Press. “It was the site of Atlantic Electric, which because of the way the state now handles the utility tax, we did not get full funding on the ratable. When Wal-Mart comes in, as a private company we’ll at least get a full tax benefit, which will certainly help out with our budgetary problems.”
Not only is the Mayor ignoring the cost side to the township of this equation, he’s also going along with a public bailout for the world’s largest retailer. The township is planning to give Wal-Mart a 5 year tax abatement. In year one, Wal-Mart pays no property taxes, and the following 4 years, Wal-Mart pays all the taxes to the township, and none to the school district, which is more than $3.2 million in lost revenue for the schools. In total, Wal-Mart gets at least $4.5 million in public welfare—most of it at the expense of the school system.
The Press of Atlantic City found one neighbor who complained about the enormous traffic that the store will create. “It would bring in way too much traffic,” the resident told the paper. “The traffic is bad enough by here already. And in the summer? Forget about it. And they can’t widen Fire Road any more in front (of Harbor Crossings) without it cutting into some of the homes. So I don’t think it’s the right place for a Wal-Mart at all.”
But township officials have definitely drunk the Wal-Mart Kool-Aid. “Anything that generates more jobs for this area is certainly welcome, and it will be a nice tax ratable for the township as well,” Deputy Mayor John W. Risley Jr. told the newspaper. “This has been talked about for a long time, and we’re hopeful that ground will be broken soon.”
What you can do: Egg Harbor Township encompasses 41,600 acres. It includes the villages of Bargaintown, English Creek, Scullville, Steelmanville, McKee City, Cardiff, Farmington and West Atlantic City.
Egg Harbor Mayor McCullough can’t say enough positive about Wal-Mart in his small town. McCullough is an institution in Egg Harbor. He’s currently serving his 20th term as Mayor of Egg Harbor Township, having first assumed office back in 1986.
The Mayor is excited by this plan because the former tenant, an electric company, did not pay business taxes to the township. McCullough believes that Wal-Mart will help the town’s property tax collections. The Press of Atlantic City cautions, however, that “While a Wal-Mart and the larger retail complex would create new jobs, its presence would almost certainly be felt by area businesses.”
A Genuardi’s supermarket is about a half-mile from the proposed superstore, and Bob’s Garden Center is about two miles away. These two businesses could be severely hurt by the Wal-Mart project. The owner of Bob’s Garden Center put on a brave front-typical of small business owners. “We’ve been in the area for over 40 years, when there was nothing in the area,” said the spokesman for Bob’s. “Competition is good. It keeps you on on your toes and makes you be a better business.” But after a year or two near a Wal-Mart, Bob’s Garden Center may have no toes left.
The irony is that there is no market need for another Wal-Mart superstore. The company already has a store 5 miles away on Black Horse Pike in May’s Landing. That store is not a supercenter, however, and it is very possible that the May’s Landing store would be shut down. Most of Wal-Mart’s sales at a superstore in Egg Harbor will come from their May’s Landing store, and from grocery stores and other retailers in Egg Harbor.
According to Egg Harbor’s Master Plan from 2002, “Egg Harbor Township has experienced an unprecedented level of growth over the past twenty years. The Township has had a 55% increase in population since 1980 with no end in the foreseeable future. Growth in the Township is projected to continue at a consistent pace through the next two decades so that growth management and fiscal stability have become the Township’s most pressing concerns.”
Traffic congestion and growth problems are so critical to the township, that the 2008 update to the Master Plan suggests that “The Township should continue to pursue the proposed Timed Growth Legislation. This legislation will provide for a phasing of growth or capital contributions from developers and could be an important component of the Township’s continued development.”
One of the goals of the updated Master Plan is “to create an atmosphere within the municipality which is conducive toward the retention of existing businesses.”
Readers are urged to email Egg Harbor Mayor Sonny McCollough at Jhughes@ehtgov.org with the following message:
“Dear Mayor McCollough, Your township has a Wal-Mart discount store 5 miles away in May’s Landing. I know you want more ratables in your township, and the Atlantic Electric Company site produces little revenue. But don’t confuse a Wal-Mart superstore with economic development. Wal-Mart is a form of economic transfer: it’s sales will come largely from its May’s Landing store, and area grocery and department stores/garden centers in Egg Harbor.
Your updated Master Plan talks about ‘creating an atmosphere which is conducive toward the retention of local businesses.’ Wal-Mart will cannibalize your existing businesses, and the net job impact will be almost negligible.
The Atlantic Electric site should be used for a higher purpose: office park, high tech industrial use, or even housing. There is residential property abutting this site, which will also be harmed by the proximity to an intense commercial use. Hold out for something better than 35 acres of concrete and asphalt retail. Don’t let Wal-Mart make an omelet of your small business class in Egg Harbor.
Finally, don’t sign any tax abatement deal with hurts Egg Harbor kids to give welfare to Wal-Mart. This company can afford to pay its full property taxes, and giving them a 5 year welfare deal is just a waste of public revenue that is desperately needed by the schools.”