Wal-Mart Stores Inc. yesterday said it would scrap plans to build its first District store in Northeast after senior executives at the company visited the proposed site in the Brentwood neighborhood and found it did not meet their requirements.
The decision, which executives made late yesterday at Wal-Mart's Bentonville, Ark., headquarters, stunned city leaders and developers, who had courted the retailer for years and hoped its arrival in Northeast would spark an economic revival in the neighborhood.
Wal-Mart had reached the final stages of negotiations to build a 100,000-square-foot store at the Rhode Island Place shopping center. All that remained was final approval from top company executives, who flew into the District this week to review the site, people familiar with the talks said.
"It floors me. We had almost everyone on board," said one developer involved in the deal, who spoke on condition of anonymity because he is not authorized to discuss the negotiations.
Wal-Mart gave no detailed explanation of why it rejected the site, but two people with direct knowledge of the talks said the small size of the site and parking lot in the Rhode Island Place shopping center were two major factors.
Mia T. Masten, a Wal-Mart spokeswoman, said that "after reviewing the site and evaluating our operational needs, we decided the site does not meet the requirements to best serve our customers." For now, she said, the chain has no alternative location in the District in mind.
Masten said the chain, which has 27 stores in the region but none inside the Capital Beltway, will work with the mayor and the city council to find a new site. "Wal-Mart remains very interested in the Washington, D.C., market," she said.
Executives with the project's two private developers, Graimark/Walker Urban Development LLC and MidCity Urban LLC, did not return phone messages last night.
Chris Bender, a spokesman for the city's office of planning and economic development, said the company's decision is "disappointing."
At-large D.C. Council member Harold Brazil urged developers to find a replacement for Wal-Mart. "There is real demand for discount goods in the city," he said.
The District originally owned the Brentwood property, at one point using it as a lot for impounded cars. But it sold the property to developers in 2001. Still, city leaders repeatedly met with retailers to encourage development on the site.
Kmart planned to move into the 23-acre site, but that project failed when the retailer filed for Chapter 11 protection from its creditors in 2002. But because of Kmart's efforts, the site is already zoned for retail and is physically prepared for construction, which would have made it possible for Wal-Mart to move quickly.
Still, the proposed site, near the Rhode Island Avenue Metro stop, would have been an unusual one for Wal-Mart.
A relatively small space, it already contains a Giant Food and Home Depot, and Wal-Mart would have been forced to squeeze into a 100,000-square-foot space. The chain typically builds stores with about 130,000 square feet. What's more, the parcel of land is raised, making it difficult to expand parking, which was limited.
"The site was tight to begin with," said a developer who worked on the deal. "Wal-Mart always wanted a bigger store."
The decision to jettison plans for the Brentwood site heads off a growing confrontation between Wal-Mart and several neighborhood groups, activist organizations, and unions trying to block or slow the deal.
The groups range in size from a two-week-old neighborhood organization of 15 residents calling itself DC Citizens for Responsible Growth to the 150,000-member Metropolitan Washington Council of the AFL-CIO, which represents 180 local unions.
In letters to council members and the mayor, activist and resident organizations have demanded negotiations be halted until city leaders hold public hearings on the potential impact of a Wal-Mart store in the city.
"I am thrilled," said Heather Phipps, one the founders of DC Citizens for Responsible Growth. "Whether it was a small parking lot or activists that made this happen, I am glad we no longer have to fight off Wal-Mart."