Some residents say a superstore in the Lower Garden District has displaced families, will harm local businesses, and won't fit into the historic area.

Story by Lisa Selin Davis / Mar. 19, 2004

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A Wal-Mart superstore is coming to New Orleans' historic Lower Garden District—unless a lawsuit stops construction. (Mary Fitzpatrick)

In New Orleans last November, workers broke ground for a new building, preparing the way for an "architecturally contextual" corniced building wrapped in red brick, like the old cotton warehouses in the neighborhood, the Lower Garden District. When finished, the building could create 500 jobs, generate millions of dollars, and enliven a previously broken neighborhood.

But more than 1,500 historic housing units were razed to clear the site, displacing 845 low-income families, and this five-acre store may harm small businesses when construction is complete.

It might look different in the blueprints, but it's a Wal-Mart superstore, and it's part of a neighborhood redevelopment plan that has some New Orleans residents in an uproar.

"It's a scandal of national proportions," says William Borah, a land-use attorney for Smart Growth of Louisiana, one of the five nonprofits behind a lawsuit to halt construction.

Built in 1941, the 50-acre St. Thomas Housing Project, just two miles down-river from Bourbon Street, contained 167 two- and three-story brick duplexes with hipped roofs—not your typical tower-in-the-park projects. "These were National Register-eligible buildings," Borah says.

According to the developer overseeing construction of the new Wal-Mart, Pres Kabacoff, CEO of New Orleans-based Historic Restoration, Inc. (HRI), though, the buildings couldn't be reused, due to both their dilapidated condition and their violent history. Eighteen murders occurred there between 1992 and 1995, and the majority of residents were single mothers with annual salaries of less than $5,000. "It was a plague on the area," Kabacoff says. "People were afraid."

St. Thomas Housing Project (HUD)

Eight years ago, the department of Housing and Urban Development gave the city of New Orleans a $25 million Housing Opportunities for People Everywhere (HOPE) VI grant, a program for transforming "severely distressed" public housing and "improving the living environment for public housing residents." By 2001, all but five of the buildings had been demolished to make way for an integrated community with roughly 25 percent low-income units and 75 percent market-rate. The plan called for a mixed-income population as well as resident-owned commercial development.

Razing the buildings was only the first in a series of moves that upset preservationists, environmentalists, and some residents. "Those buildings were perfectly adaptable," says Meg Lousteau, executive director of the Lousiana Landmarks Society. "We could have had a great HOPE VI project without demolishing everything."

The Wal-Mart plan, approved by the New Orleans City Council on Apr. 18, 2002, turned the original ratio upside down, leaving only 25 percent of the housing affordable and substituting luxury condos for subsidized housing. And the "resident-owned" retail development is a 200,000-square-foot Wal-Mart superstore.

A Magazine Street storefront near the Wal-Mart site (www.neworleansonline.com)

Kabacoff, whose company won a National Preservation Honor Award from the National Trust in 1999 for its many renovations, says that the grant as it was written was unrealistic, resulting in the dismissal of the first two developers. The development plan has changed, after countless meetings with city officials and community groups, between 10 and 20 times. (No environmental-impact study was conducted, a key point of the pending lawsuit, partly because the original proposal didn't warrant one.)

The shift from low-income to luxury housing and small-scale retail to big-box superstore worries critics. "This is a moving target," Borah says. "Every time you turn around, they say it's changing. How can you assess the impact if they're pulling the old bait-and-switch?"

HRI's plan envisions a safer, more profitable area, but should redeveloping a neighborhood mean displacing its residents? "Out of 800 families, only about 70 of them will have a chance to come back in," Borah says. "This displacement of low-income African Americans was allegedly to build mixed-income housing. In reality, it's a way to get a lot of money for high-income housing," he says.

Segregation of the poor into housing projects is a notorious failure, Kabacoff says, and demolition is sometimes the only way to right that wrong. The plan, he says, was to build mixed-income housing, not to recreate the projects. "The goal of HOPE VI is to de-concentrate public housing and poverty," Kabacoff says. "The concentration of poverty is what creates 18 murders a year." He says his development has always been for a "mixed income, mixed-race, mixed-age, mixed-use community."

Yet the current proposal segregates renters from owners with separate sections for low-income elderly housing and luxury condominiums. And what of the former residents? "They're now in neighborhoods that are better," Kabacoff says, though, he admits, "It's not Nirvana. New Orleans is very poor. We didn't send them to Shangri-la." (HUD and the Housing Authority of New Orleans paid for residents' moving costs.)

Shoppers on Magazine Street (Mary Fitzpatrick)

To critics, a Wal-Mart certainly doesn't fulfill the original proposal to build resident-owned retail. The store, they say, will take business away from the small shops along nearby Magazine Street. "Magazine merchants are terrified of this," Borah says.

Daphne Moore, a community affairs liaison for Wal-Mart, says, "[Magazine Street] is all antiques stores and unique shops—nothing that's in competition with Wal-Mart."

Magazine merchants disagree. Even antiques stores and art galleries can lose shoppers to Wal-Mart, one-stop shopping for less expensive items. Camille Strachan, a lawyer with a storefront practice along historic Magazine Row, says, "Sixty percent of the items on Magazine Street are competitive with items in Wal-Mart. We really do think it will have an effect."

Inner-city shoppers spend over $100 million each year in suburban Wal-Marts near New Orleans, money that would stay inside the city with the new store. The suburbs are overbuilt, and their resources should be drawn back into the urban center, Kabacoff says. "That's what gave me the idea to bring in [a big-box store]," he says. "Wal-Mart was the only one even willing to look at the site."

Wal-Mart has turned its eye on inner cities across America, a market previously untapped by the big boxes. Says Moore, "Thirty years ago, Wal-Mart saw its stores reaching into rural areas that were underserved, where people were paying higher prices and traveling to get goods that were readily available in cities. The opposite is true for many urban markets today."

And while some object to using federal grant money to court the largest corporation in the world, Moore asserts that it's Wal-Mart that is making the investment. "There's a misconception that Wal-Mart is profiting from the HOPE VI funds, or receiving tax incentive funds," she says. "In fact, we paid several years of property taxes up front."

Some say the discount chain is getting a huge, and unfair, discount, but even if Wal-Mart is paying a fraction of the property tax that would be levied on small businesses, says Kabacoff, Wal-Mart's investment was integral to funding. The company's $7 million went straight into housing construction. Yet the houses constructed with that money were market-rate homes and luxury condos; grant money covered the low-income housing costs. If luxury housing were not being developed, HRI wouldn't need Wal-Mart to come to the financial rescue.

One of Magazine Street's shops (www.neworleansonline.com)

Wal-Mart in the inner city is not what upsets critics. The invasion of the big-box store may be inevitable, but a superstore in a historic location is the wrong development in the wrong place. "The underlying problem is not that Wal-Mart is ugly," Lousteau says. "It's that it's completely inappropriate for that location."

Bringing suburban amenities into the inner city lures the problems of suburbia, Borah says. "This is the worst aspect of suburban sprawl coming back into inner city," he says. "It's the kind of store that's being opposed in the suburbs now." Traffic, drainage, and vibration damage to historic properties are just a few of the potential problems, he says. The site has already flooded once.

Kabacoff counters that having Wal-Mart in town will prevent residents from driving across highways and byways to get to the suburbs and exurbs. "I thought we were doing the opposite of sprawl."

In fact, Wal-Mart is improving nearby roadways to ease traffic, Moore says. And its current proposal includes a smaller-scale parking lot, with a mere 825 spaces (as opposed to the 1,200-space lot Wal-Mart wanted), landscaping, and the preservation of an old water tower and the Amelia Cotton Press. "We took great pains to design a store that would complement the existing architecture. We designed it to look like the old warehouses in the area."

Yet, points out Strachan, "Those warehouses didn't have 825 parking spaces."

Lousteau of Louisiana Landmarks says the project is still too large. "To hear them tell it, they're building the Taj Mahal," she says. "They put in 100 less parking spots, paint it red, and put a cornice on it, as if that in any way could mitigate this enormous suburban site plan."

The irony, say both Borah and Lousteau, is that HOPE VI was designed on New Urbanist and smart growth principals, and that their city, built on a grid system connected by streetcars, is a model for both. National Register and National Historic Landmark Districts surround the Lower Garden District, where the superstore is rising.

"We feel [Wal-Mart] will have a disastrous impact," Borah says. "It's a big-box suburban sprawl store. It's got about as much urban design features as McDonald's," Borah says. "It's everything New Orleans is not. It's automobiles versus pedestrians, it's big-box versus small stores."

Some worry that this redevelopment in New Orleans will set a dangerous precedent. "If you can wrap an elephant in this kind of tissue paper, then it's a model for the future," Strachan says. "Any inner city that needs to be redeveloped is watching this very carefully."

Big-box retail is the key to economic improvement in cities, Kabacoff maintains. "America has chosen where it wants to shop," he says. "And you can't change America."

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