‘Living wage’ impact could stretch beyond Wal-Mart, D.C. deputy mayor warns

The District’s top economic development official warned Friday that a “living wage” bill passed by the D.C. Council could reverberate well beyond Wal-Mart, threatening developments in which the retail giant is not taking part.

Victor L. Hoskins, deputy mayor for planning and economic development, would not say whether he would recommend that Mayor Vincent C. Gray veto the legislation, which would require some large retailers to provide minimum wages and benefits of $12.50 an hour.

But he said its passage into law would have a “chilling impact” on retail growth in the city, driving away not only Wal-Mart — which has said it will abandon three of six planned stores should the bill become law — but also other national retailers considered more desirable by residents and elected officials.

“What they’re doing is, they’re killing the golden goose,” Hoskins said of city lawmakers, citing figures of 3,000 permanent jobs, 1,000 construction jobs and untold tax revenue lost over the next 18 months should the bill pass and Wal-Mart follow through on its ultimatum. Although lawmakers may think they are targeting Wal-Mart, he added, other retailers are “concerned it may one day turn on them.”

Hoskins’s comments, made in an interview, add to mounting evidence that Gray (D) is likely to veto the measure, known as the Large Retailer Accountability Act.

Its wage and benefit provisions represent a 50 percent premium over the city’s minimum wage of $8.25. The requirement would be applicable to retailers with yearly corporate sales of at least $1 billion operating out of spaces of 75,000 square feet or more, with an exception for companies with unionized workforces.

The admonition from Hoskins was in line with the views of various groups, including the D.C. Republican Party, the National Retail Federation and the American Antitrust Institute, all of which released letters or statements urging Gray to exercise his veto.

But backers of the living-wage bill, including labor unions and advocates for low-income residents, urged Gray to sign the measure, which would raise the annual compensation of an entry-level worker from about $17,000 to $26,000.

The Rev. Graylan Hagler, pastor of Plymouth Congregational United Church of Christ and a leading living-wage proponent, said Gray has pledged to meet with his group, although no date has been set. Clergy, he said, are organizing to exert pressure on Gray, who is pondering whether to run for reelection.

“There is political hell the mayor’s going to face” should he veto the bill, Hagler added.

Hagler and the bill’s supporters on the D.C. Council have suggested that Wal-Mart’s ultimatum was a bluff and that, if the retail giant did make good on its threats, other companies would move in.

“That’s not true,” Hoskins said when presented with that argument. “No other folks are ready to come in. I’m the one talking to these folks. . . . The conversations are getting difficult, I have to say.”

At least one developer — Gary D. Rappaport, who is handling the Skyland Town Center site in Ward 7 — has said his project will stall without Wal-Mart as an anchor. Hoskins said the two other Wal-Mart sites where construction has yet to begin are doomed otherwise, and he raised the possibility that Wal-Mart may never open stores at three other sites where construction is underway. The company has said it is reviewing its “financial and legal options” for those locations.

Three other retailers, Hoskins said, have cited the living-wage bill in abandoning interest in District locations.

He declined to name specific companies, but he said the bill could arrest development at the former Walter Reed Army Hospital site in Northwest Washington and expansion of the Costco-anchored Shops at Dakota Crossing site on New York Avenue NE.

Wegmans, the New York-based mega-grocery, has been rumored for more than a year as a possible anchor for the Walter Reed site. Lowe’s, the home-improvement big-box store, has been in talks to locate at Dakota Crossing.

Gray has expressed deep reservations about the bill but has not said whether he will veto it. His chief of staff, Christopher L. Murphy, said Friday that the mayor has scheduled several meetings next week with various groups on both sides of the issue to discuss the legislation’s impact.

The bill passed Wednesday on an 8 to 5 vote. It would take nine votes to override a veto.

Council Chairman Phil Mendelson (D) has said it was unclear when the legislation would reach the mayor, who would then have 10 days to act on it .

Mike DeBonis covers local politics and government for The Washington Post. He also writes a blog and a political analysis column that runs on Fridays.
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