By Barbara Ross
September 21, 2011
A vacant Brooklyn lot that Walmart wants for its first New York City store will stay in state hands while the Cuomo administration makes sure taxpayers aren't getting ripped off.
Before the recession hit, the developer, The Related Companies, had agreed to pay the state $21 million for the property. After the economy tanked, Related's appraisers claimed the site was worth only $12 million.
A state-funded appraisal put it at $16.3 million, and a compromise sales price of $14 million was set.
But critics charged that the appraisals were flawed and taxpayers were getting a raw deal, and the News discovered that the appraiser hired by the state had done prior work for both Related and Walmart.
After the News revelations about the appraisal earlier this year, the state Office of General Services quietly ordered up new appraisals of the 14 acre lot.
"The new appraisals are to ensure that the value is reflective of current market conditions," said OGS spokeswoman Heather Groll. "We wanted to be sure that we are receiving the maximum value for the property on behalf of the taxpayers of New York state."
Groll said neither of the new appraisers has done work for Related or Walmart, unlike the state's last appraiser, Jerome Haims Realty Inc.
OGS' new review comes as a critic of the first deal, Josh Kellerman, an analyst with Alliance for the Greater New York, predicted Walmart plans not one or two big stores but over 100 small, medium and large stores around the city.
A study that Kellerman just finished with CUNY professor Stephanie Luce argues that Walmart will seek to mimic its 21% share of the national grocery market here in New York City.
To get that share of $9.3 billion city residents spend on groceries, they argue Walmart will need 159 local stores -- most of them a lot smaller than the big box planned for Brooklyn. They predict a net loss of 4,000 jobs as nearby neighborhood stores close in response.
Kellerman said Walmart's stock is losing luster on Wall Street because its sales are flat and it's already saturated suburban markets. To grow, Walmart must get into urban areas like New York and Chicago.
Walmart spokesman Steve Restivo dismissed the study as "gimmicky predictions that aren't based on any reality," but acknowledged that Walmart plans to open "dozens" of smaller 10,000 square foot Walmart Express stores in Chicago over the next five years.
As for New York, he said it's "too soon to tell."
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