Aug 3, 2006 11:06 pm US/Central
Target May Pull Out Of City Over Big Box Ordinance
Retailer Has Pulled Out Of Far South Side Mall Plan
CBS 2's Derrick Blakley also contributed to this report.
CHICAGO (CBS) ―
The fallout from Chicago's big box ordinance is hitting home in Morgan Park.
Target had threatened to stop opening stores in Chicago if the City Council passed a $10 minimum wage law.
CBS 2's Alita Guillen reports that threat has now become a reality.
A new Target store opened last month on Petersen Avenue, but it may be the last that Target opens in Chicago.
Next month, that mound of dirt at 119th and Marshfield was supposed to be one of two new Target stores in Chicago, but it appears that project is officially on hold.
A proposed Target store on the city's North Side at a former CTA rail yard on North Broadway is also in jeopardy, according to city Planning and Development Commissioner Lori Healey.
All eyes are on Mayor Daley.
"When you have a big box coming into a shopping area, they bring money. They bring customers. And from there, small businesses come around it," Daley said.
The Chicago City Council approved the big-box ordinance 35-14 last week, ignoring the protests of Daley and aldermen who represent some of the city's poorest neighborhoods, all who said the measure will drive businesses to surrounding suburbs.
Primestor's $90 million development was expected to produce 450 construction jobs and 750 retail jobs. On Thursday, the developer bringing Target to the North and South Sides officially ended the project, issuing a letter to the mayor and aldermen saying, in part: "The fundamental fact is that under this ordinance, wages will increase 40 percent to 60 percent, making future Chicago stores economically unviable."
"Their real estate committee is not interested in investing in a store that will lose money," said Chicago Planning Commissioner Lori Healey.
The ordinance mandates companies with $1 billion in annual sales and 90,000 square feet of retail space to pay workers $10 an hour plus $3 in benefits by July 2010.
Ald. Carrie Austin (34th) lamented Target's loss, saying the store was to anchor a 32-acre shopping mall in her district that has already secured $23 million in city funding.
"I'm depressed. Calumet Park has land right across the street they can develop," Austin said. "Our development will just sit there for another century."
"We would of had new life," Austin said.
Austin said 750 jobs were lost. They were jobs she worked 10 years to bring to the 34th Ward.
"Anywhere we go, we are just stuck. We have no where to grow. This was our opportunity and now we are just waiting," Austin said.
Until now, many thought Target wouldn't pull the plug on the project even if the city passed the ordinance. But now that Target appears to have called their bluff, the only way out is for the mayor to convince at least two aldermen to change their votes. That would allow Daley the opportunity to veto the ordinance.
"I can build in Cicero on 26th Street. I can build in Stickney, across from Ford City. They can build on the other side. And that's the issue," Daley said.
Daley hasn't said whether he plans to veto the ordinance at the next City Council meeting on Sept. 13. He would have to get two aldermen to change their votes in order to avoid an override.
Numerous phone messages left for Minneapolis-based Target Corp. on Thursday were not returned.
(© 2006 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
