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Wal-Mart in Talks to Build D.C. Store

Discounter Negotiating for Space in Brentwood Shopping Center

By Michael Barbaro and Neil Irwin
Washington Post Staff Writers
Wednesday, August 11, 2004; Page E01

Wal-Mart Stores Inc. is close to a deal to build a store in the District, a transaction that would bring the world's largest -- and perhaps most controversial -- retailer into the nation's capital, people familiar with the talks said yesterday.

The Bentonville, Ark.-based chain is negotiating with developers to build a 100,000-square-foot store at the Rhode Island Place shopping center in the Brentwood neighborhood of Northeast Washington, these people said.

The Post's Michael Barbaro discusses negotiations to build a Wal-Mart store in the District.
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Proponents said the discount chain would create hundreds of jobs, generate higher tax revenue and provide residents with lower-priced merchandise that they already purchase outside the city. Critics, however, assail the chain, saying it pays low wages, hobbles its unionized competitors and destroys small businesses.

The proposed site, near the Rhode Island Avenue Metro stop, already contains a Giant Food supermarket and the District's only Home Depot hardware store. Wal-Mart would go on a site originally planned as a Kmart store, a project that was scuttled when the chain filed for bankruptcy in 2002.

Barry F. Scher, a vice president at Giant Food LLC, said the grocer has been notified by its landlords that they are "trying to finalize" a lease agreement with Wal-Mart. Two people with direct knowledge of the negotiations, who refused to be identified because the deal is not yet done, said an agreement could come within weeks but still faces several hurdles and could fall apart in final talks.

Senior executives of Wal-Mart have not yet given the project their final approval, and the company must obtain building permits from the city to build its store. If a lease is signed and permits issued, construction could move quickly because the land is already zoned for retail development and is physically prepared for construction.

The store would be a conventional Wal-Mart, not one of its supercenters -- the 145,000- to 210,000-square-foot stores that include full grocery operations and thus compete directly with unionized supermarkets like Giant and Safeway.

Mia T. Masten, a Wal-Mart spokeswoman, declined to comment on the negotiations. "Wal-Mart is interested in becoming part of the Washington market," she said.

Executives of Graimark/Walker Urban Development LLC and Mid-City Urban LLC, the developers that control the project, did not return calls yesterday seeking comment. A spokesman for the District's economic development office said the city has been marketing the site to retailers but declined to comment on the possibility of a Wal-Mart.

A store in the District would be the latest step in Wal-Mart's expansion into America's cities, which had largely been passed over in the company's remarkable growth from a small chain in Arkansas to an international retail behemoth. Urban locations, with their expensive real estate, complicated zoning restrictions and often strong labor unions, have been one of Wal-Mart's last frontiers as it seeks an ever larger share of America's shopping dollars.

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