A Wal-Mart Beachhead Close to New York City
By ELSA BRENNER
WHITE PLAINS, July 24 In the resurgent central business district here, amid new upscale construction that includes a luxury Trump condominium tower and a 123-room Ritz-Carlton Hotel, a Wal-Mart has opened it doors.
The store in central Westchester, 25 miles north of New York City, is one of the first of a new group of multilevel Wal-Marts that the company, the nation’s largest retailer, has planned for cities in the coming months.
Until several years ago, Wal-Mart, which is known for its rock-bottom pricing strategies, has built single-story outlets in rural and suburban locations surrounded by sprawling parking lots. But for cities like White Plains that are undergoing economic revivals that can lure shoppers from a broad geographic area, Wal-Mart has expanded its signature format to include vertical shopping configurations especially in cities where land is scarce and development costs are high.
Of its 39,000 outlets nationwide, including general merchandise stores, supercenters, Sam’s Clubs and what it calls neighborhood markets, Wal-Mart operates roughly 20 multilevel stores.
Even though Wal-Mart has tried to penetrate the New York City market, it has encountered stiff resistance from local zoning boards and so far does not have a presence in the five boroughs. According to Steven Restivo, a regional director for corporate affairs, the company is continuing to pursue development in New York City, and in the meantime is opening Wal-Marts in places like White Plains, which are close enough for shoppers coming from, for example, the Bronx.
Last month, Wal-Mart opened a 142,566-square-foot two-floor store in a new structure in Kearny, N.J., seven miles from New York City, in an urban enterprise zone, where the sales tax has been reduced to 3 percent. Wal-Mart expects to announce the opening of more stores in the area surrounding New York City in coming months, Mr. Restivo said.
In White Plains, no zoning changes were required, since Wal-Mart leased a building that was previously used by a retailer. But in Queens, for example, it encountered stiff resistance from zoning board members and other officials who were worried that the giant retailer would, among other things, overwhelm smaller struggling businesses.
The two-story 180,000-square-foot store in White Plains, which is on the first and second floors of a nine-story building occupied by Sears for 37 years, and the newly built Kearny store are introducing features that will be limited to Wal-Mart’s urban outlets, Mr. Restivo said.
For example, the new White Plains store has four side-by-side escalators for passengers and their carts; it is one of the first of the chain’s stores to have this feature. While customers move between floors on the first and the fourth escalators, the two escalators in the middle move the shopping carts along rails, within view of the customers but sealed off by plexiglass dividers for safety reasons.
Shoppers on opening day of the White Plains store last Wednesday seemed pleased with the new double-functioning escalators. Kaye Smythe, a retired bartender from Yonkers who walks with a cane, said the escalators made chasing bargains that much easier for her. “Usually, I have to find an elevator and wait,” Ms. Smythe said. “Now I can get from one floor to another right in the middle of the store along with everyone else. I was a little nervous at first, but it really works.”
None of the mishaps that sometimes occur on similar dual-functioning escalators in other large stores like carts going awry or slipping backward occurred on opening day here, according to Tina Frank, an assistant manager.
The complex escalator system and the oversize elevators that Wal-Mart required to transport passengers from parking areas on the fifth and sixth floors to the store itself, had to be made to order. This delayed the store’s opening by about 10 weeks, said Anthony DiTommaso, the chief executive of Ivy Equities, the building’s landlord and manager in Montvale, N.J.
“The whole thing required a massive amount of cutting-edge technology in vertical transportation,” Mr. DiTommaso explained. The new store has eight oversize elevators for passengers with carts, two freight elevators and another elevator that Mr. DiTommaso called a “cartalator,” which brings carts from the parking area back to the store.
Ivy Equities and Barrow Street Capital, a pension fund adviser in New York, bought Sears’s lease for the building, which includes six floors of parking, from MetLife in 2003 in a 66-year-old leasehold agreement for $13.75 million. Sears moved to a nearby mall.
Mr. DiTommaso would not disclose how much Wal-Mart is paying for the space, although he conceded that Wal-Mart was a tough client to bargain with. “Millions of consumers get merchandise for less at Wal-Mart,” he said, “but they certainly don’t give anything away to their landlords.”
As part of Wal-Mart’s rollout in urban markets, the White Plains and Kearny stores have wider aisles and use wood and earth-tone flooring to delineate merchandise areas, Mr. Restivo said.
Both are considered general merchandise stores, which are somewhat smaller than the superstores. The White Plains store has a smaller garden center and sells smaller kitchen appliances than most Wal-Mart stores, to accommodate the needs of residents living in the many condos going up in the downtown around it.
In particular, the exterior of the White Plains store presented new architectural challenges that the chain may well encounter again as it enters other city markets and renovates older structures, said Steve Mitchael, director of design for Wal-Mart’s north central division.
“In architecture, it’s often difficult to fit into a city’s design, because such areas have evolved over the years with different architectural styles,” Mr. Mitchael said. “Also, over time, building materials change and so does the community leadership, and that all influences the look of a place.”
In White Plains, that was especially true, he said, because the city has a large assortment of older structures and is going through a major transition.
The newly renovated main entrance to the White Plains Wal-Mart incorporates Art Deco-style elements with glass blocks and light-colored bricks, and a curving sail-shaped roof line.
“This store represents an excellent example of how well the Wal-Mart concept can fit into an urban setting,” Mr. Mitchael said.
Indeed, Paul Wood, the city’s executive officer, said White Plains was happy to have Wal-Mart in the mix, even though its presence is in sharp contrast to the development of luxury buildings around it. “It’s part of our economic development strategy to have a variety in the downtown,” Mr. Wood said.