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Wal-Mart, open to adapting formats, sets sights on four D.C. locations

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Nov. 16 (Bloomberg) -- Daniel Binder, an analyst at Jefferies & Co., discusses the outlook for Wal-Mart Stores Inc. and Home Depot Inc. Wal-Mart reported a 9.3 percent gain in third-quarter profit as growth abroad helped make up for sales declines at U.S. stores. Home Depot posted a 21 percent gain in third-quarter profit that beat analysts' estimates. Binder speaks with Mark Crumpton on Bloomberg Television's "Bottom Line." (Source: Bloomberg)

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By Jonathan O'Connell
Capital Business Staff Writer
Sunday, November 21, 2010; 10:36 PM

The four sites that Wal-Mart identified when it announced its plans to enter the District for the first time last week are a former car dealership, a parking lot leased by a congressman's wife, a onetime public housing complex in the midst of redevelopment and a strip of auto repair shops.

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To make its stores fit on each of the varying properties, the company has agreed to consider an array of layouts, designs and parking arrangements, a reflection of the chain's new willingness to adapt its model to enter urban markets.

None of the planned stores better exhibits Wal-Mart's new approach than 801 New Jersey Ave. NW, where the company plans a store of between 75,000 and 80,000 square feet on the ground floor of a five-story mixed-use building featuring 315 apartments, underground parking and space for smaller retailers to locate next door. The property, currently a parking lot, is owned by the city and leased to a joint venture between developer JBG and the Bennett Group, a firm owned LuAnn L. Bennett, wife of Rep. James P. Moran Jr. (D-Va.).

Grant Ehat, principal of JBG Rosenfeld Retail, said he had been courting Wal-Mart for nearly 10 years but had failed to identify a site that fit the bill for a company known for stand-alone big-box stores and large surface parking lots.

"Really what happened is Wal-Mart had a change in its focus," he said, relaxing its store requirements to enter the markets it coveted and planning for 40 to 50 percent of its offerings to be groceries. "We are unaware of any other stores like this," Ehat said.

On Georgia Avenue NW, developer Foulger-Pratt plans to tear down the former Curtis Chevrolet dealership in a partnership with the family that used to sell cars there. They plan a 102,000-square-foot Wal-Mart with one level of underground parking, replacing previous plans to build 399 housing units - a proposal that collapsed after the recession began.

"We saw a new, progressive Wal-Mart with an innovative urban format," said Dick Knapp, senior vice president of Foulger-Pratt.

Where there are now auto repair shops on New York Avenue NE, developers Rick Walker and Miroslav Vlcko, who built the shopping center on Rhode Island Avenue NE that brought Washington its first Home Depot, are planning a 120,000-square-foot Wal-Mart that would sit atop another anchor as part of a major new retail center containing more than 350,000 square feet of shops and a two-story parking garage. Walker would not name the other anchor, but he plans a similar development in Baltimore, pairing a Wal-Mart with a Lowe's home-improvement store.

Locations in neighborhoods in need of fresh groceries and jobs made the sites stand out during the selection process, according to Wal-Mart spokesman Steven Restivo. He said the company will seek further opportunities to expand in the city and tailor its stores to fit the space and character of the areas it is looking to serve.

"We'll continue to evaluate additional opportunities across the District and will be flexible in our approach so that the final size, look and format of our stores is a reflection of the neighborhood where it's located," he said.

Should it overcome opposition from labor leaders and build the four stores by the end of 2012, as it plans, Wal-Mart would enter the market more aggressively than Target, which opened one store, in Columbia Heights, in 2008 but has not expanded.

Restivo says Wal-Mart will be asking for no public subsidies on any of its four sites, although at least two of the planned stores require approval from the city. Wal-Mart has not yet signed a lease for any D.C. store.

On the north side of East Capitol Street, near the border with Prince George's County, Wal-Mart plans a store of about 100,000 square feet on the site of a former public housing complex. Adrianne Todman, interim executive director of the D.C. Housing Authority, which owns the property, is hoping the company will agree to certain hiring provisions during lease negotiations, similar to the way it did in making a pact on wages with the Chicago City Council for stores there.

"We're all watching the Chicago model in terms of how that turned out, and we are going to work with all of our stakeholders to make sure we get the best deal possible in terms of the city," Todman said.


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