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Eugene Weekly : News : 02.09.06

Whole Foods

Subsidy for corporate market threatens local natural foods stores.


Eugene city staff's proposal to give $9 million in taxpayer subsidies to a Texas corporation for a huge new downtown natural foods grocery could decimate Eugene's homegrown natural food stores, critics say.

"To subsidize a corporate chain to go against local businesses just seems very wrong," said Gavin McComas, proprietor of Sundance Natural Foods. McComas calls the city subsidies for the Whole Foods development "intrinsically unfair."

City staff have proposed giving Whole Foods and the local Giustina lumber and land speculation family who's working as the developer for the project an $8 million parking garage plus $1 million in land for a downtown store near the onramp to the Ferry Street Bridge viaduct.

Whole Foods is a huge corporation with 38,000 employees, 175 stores and $4.7 billion in sales last year. The world's largest natural foods retailer, the corporation is adding a dozen stores a year and predicts it will more than double in size in the next four years, according to its annual report.

McComas said the 50,000 square foot Whole Foods store plans to sell more than all of the six other local natural foods stores in Eugene combined. It's unlikely people will buy that much more natural food or shift from shopping that much from Safeway and Albertson's, he said. Instead, McComas said those corporate sales will come out of local stores, threatening to bankrupt them.

Whole Foods report to shareholders says maximizing investor returns is a major objective. The corporation lists "smaller specialty stores" as among its competitors in the "intensely competitive" business and said its advantage is using its large size to generate $537,000 in sales per store per week.

Sundance has been in Eugene since 1971 and like other local natural foods stores is part of the local culture, "part of what Eugene is," McComas said. "It would be a great loss if we couldn't continue to have these local natural food stores here."

Eugene shouldn't become an "Anywhere, U.S.A.," a "clone town" of corporate chain stores, McComas said.

Paul Nicholson, a former Eugene city councilor and owner of the local Paul's Bikes chain, agrees that the city-subsidized Whole Foods project will kill some of the local stores. "There is no public interest in subsidizing one retailer at the expense of others," he said. "They're not creating jobs."

McComas points to studies that jobs in local stores are better than corporate chains since they return several times more money per sales dollar to the local economy by buying locally and keeping profits in town.

The Whole Foods and Connor/Woolley/Opus redevelopment proposals will convert downtown "from a public space to a corporate shopping mall" and "is a loss of Eugene's soul," Nicholson said.

The subsidized corporate development is a "betrayal" of Mayor Kitty Piercy's campaign promises to help sustainable local businesses, Nicholson said. "She's heavily subsidizing national retailers with money she's stealing from schoolchildren through tax-increment financing."

City staff propose that about $5.5 million of the subsidy will come from urban renewal, which diverts tax revenue from schools and other government services. In addition, about $2 million will come from money set aside for a new City Hall/police station and about $500,000 from diverting money from the downtown library.

The premise behind the city subsidy is that it will reduce traffic and enliven downtown with its central location. But McComas said he doubts it. The neighborhood natural food stores Whole Foods will displace also reduce traffic with convenient locations, he said. He said the big Whole Foods store will be a regional attraction that people will drive to and leave with their perishables in the car without walking around downtown.

The proposed project does appear very car-oriented, with more than 500 parking spaces. About half will be above the Whole Foods store in two levels and about half in the adjacent city garage. The garage will largely present a blank wall and driveways, one from a drive-through bank, to 8th Avenue, which the city's downtown plan envisions as a lively pedestrian "great street."

City staff said the new parking is needed despite surface parking lots across the street and two city parking garages two blocks away. Councilor Bonny Bettman questions whether the garage is needed for Whole Foods to locate downtown, noting the grocery's plans for parking above its store, and the fact that about half of city parking spaces downtown are vacant.

City staff praise Whole Foods for its good treatment of workers and commitment to sustainability. Fortune Magazine has listed the company as a good place to work and Whole Foods uses wind energy, recycles and donates to non-profits. But the corporation is also staunchly anti-union. A grocery union that tried to organize Whole Foods stores has filed unfair labor complaints.

City Councilor Betty Taylor said she thinks the Whole Foods store could help enliven downtown, but she doesn't think the benefit is worth the subsidy.

For years citizens have called for the city to capitalize on the success of the seasonal Saturday and Farmer's Markets and build a public indoor market downtown like in Seattle or Boston, but to little effect. Taylor said she'd also like to see the money go to a downtown park. "Fixing the roads would be better, lots of things would be better," she said.

City staff want the council to approve the Whole Foods subsidy by Feb. 22. But McComas said the city should hold a public hearing. "These decisions effect the whole community."