ICSC 2013

Hitting a Wal: Walmart Still Quietly Searching in NYC

In what has become a parlor game for retail brokers, the attempt to predict what’s next for Walmart and its unsuccessful crusade to open in New York City continues.

It’s been mostly quiet on the Walmart front since plans for a Brooklyn behemoth collapsed last fall, but prominent New York brokers insist that the world’s largest retailer is in active negotiations for a spot in the five boroughs.

WEB-NY-Observer-Walmart-Gothic-finalWalmart announced in September that its quixotic quest for a New York City location had hit a wall. The company’s latest failed bid for a toehold here came at the Related Companies’ Gateway II project in East New York. A coalition of labor unions, community defenders and politicians (including Christine Quinn) had condemned the proposal. Its downfall was attributed mostly to the company’s employment practices and perennial spats with unions. A unionized ShopRite will rise on the Gateway II site.

The Gateway Walmart had been expected since 2010, though it was never confirmed by the retailer or Related. When the East New York prospect dimmed, Walmart seemed to retreat from its designs on New York.

But several brokers told The Commercial Observer that negotiations are currently underway. “I understand they’re looking at something on the Queens-Brooklyn border,” said Faith Hope Consolo, chairman of Douglas Elliman’s retail leasing and sales division. “There’s an old industrial building over there with vacant lots next to it.”

Another real estate industry source familiar with Walmart’s hunger for a New York location, wishing to remain anonymous, said the company was in active negotiations for a “very substantial,” roughly 300,000-square-foot as-of-right site in the outer boroughs.

Ms. Consolo could not confirm the 300,000-square-foot figure, but did not reject the possibility of a Walmart site in or near Ridgewood, the gentrifying neighborhood between Bushwick and Middle Village that has recently welcomed artists and Polish families priced out of Bushwick and Greepoint.

“They just want to be here,” Ms. Consolo said, adding that Walmart might shoehorn its way into New York City with a smaller format store. “They’ve done that with their express stores and locations near college towns.” In 2010, the Associated Press reported that Walmart was looking to enter urban markets like New York, San Francisco and Chicago with stores as small as 20,000 square feet. A typical supercenter has about 150,000 square feet of space.

“It’s not always obvious or on the radar screen,” Ms. Consolo said of prospective store locations. They’ll always have the community issue, which is so old hat at this point. There are a lot of stupid people here. New Yorkers should have access to products at good prices.”

Steven Restivo, Walmart’s senior director of communications, agreed with Ms. Consolo’s sentiment. He told The Commercial Observer in an email that there was “nothing new regarding Walmart in NYC.” But Mr. Restivo added that “Two things haven’t changed: New Yorkers want us here, and residents continue to go out of their way to shop at our stores outside of the city.”  He said that last year, city residents spent more than $215 million at area Walmarts beyond the five boroughs.

Mr. Restivo did not offer the specifics of Walmart’s plans, and Mary Rottler, Walmart’s “new store real estate director” for New York City, did not return requests for comment. But Ms. Consolo said the company is continuing conversations with familiar developers, including Related Companies and Vornado Realty Trust.

“They’re going back to the old well to try and sow new seeds,” she said. “They have their eyes on New York and aren’t blinking.”

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