Walmart, the world’s largest retailer, has agreed to pay the District $1.3 million after abruptly scrapping plans to open a store in one of Southeast Washington’s poorest neighborhoods.
The settlement, which the District’s attorney general announced Thursday, comes two years after Walmart backed out of plans to open two stores in under-served D.C. neighborhoods — one at the Skyland Town Center in Southeast Washington and the other at Capitol Gateway Marketplace in Northeast Washington.
[ Walmart is ending its Express concept and closing 269 stores ]
Both locations were in major developments considered crucial to the District’s efforts to bring groceries and amenities to under-served neighborhoods, and city officials say Walmart had agreed to open two stores in underserved neighborhoods as parts of its deal to set up shop in the District. The retailer had worked closely with the District in planning the stores and had already signed leases. After Walmart backed out, both projects were set back more than a year, since no major retailers have signed on to replace them.
The Skyland store was expected to bring 300 jobs to Ward 7, which has some of the District’s highest unemployment rates. City officials said they had also expected about $65 million in sales and property taxes from the store.
“When Walmart terminated its lease at Skyland, an underserved part of our community was deprived of jobs and retail options it had been promised,” Attorney General Karl A. Racine said in a statement. “My office took action on this matter because District residents expect corporations and developers to honor their commitments. Moving forward, we plan to take a closer look at financial incentives made by the city and work to ensure that benefits promised to our community are actually delivered, especially where residents need them most.”
Walmart did not immediately respond to requests for comment. In the settlement, the company says it denies any wrongdoing related to the lease’s termination and that its decision “was based purely on economic factors and unfavorable business conditions.”
[District leaders furious Walmart breaking promise to build stores in poor neighborhoods]
The retailer, which has more than 5,000 stores nationwide, announced plans to open its first District stores in 2010.
But in early 2016, Walmart canceled its plans for the two stores and announced it would close 269 stores worldwide, including 154 in the United States. Company officials said at the time that they had new concerns about the potential profitability of those stores. It now operates three D.C. locations, near Union Station, on Georgia Avenue and at Fort Totten.
The closures also became a political lightning rod, as former mayor and current council member Vincent C. Gray accused current mayor Muriel E. Bowser of failing to keep the deals in place.
“We have absolutely been shafted,” Gray said at the time. “They think they can do this to us and we will roll over. I bet you Walmart doesn’t do that everywhere.”
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