Wal-Mart Headed to MH


A big-box giant with rock bottom prices and a flare for
attracting impassioned opposition is coming to Morgan Hill.
BY Cody McDevitt Special to the Dispatch

Morgan Hill – A big-box giant with rock bottom prices and a flare for attracting impassioned opposition is coming to Morgan Hill.

Wal-Mart plans to open a new store at 170 Cochrane Plaza by the fourth quarter of 2008, just 12 miles north of its Supercenter in Gilroy. Though a third the size of the Gilroy store, the future Morgan Hill location also will offer groceries in addition to the traditional menu of discount items.

Wal-Mart purchased the Morgan Hill site Sept. 21 for an unspecified amount and is spending $4- to $8-million to renovate the approximately 80,000-square-foot building, according to the company’s regional spokesman Kevin Loscotoff. In July, Target moved from that location on the west side of U.S. 101 to a new, 125,000-square-foot store on the opposite side of the highway.

Asked why the corporate juggernaut opened a store so close to Gilroy, Loscotoff said “we have customers in Morgan Hill that are driving to our Gilroy store. We’ve heard from the community the desire for a grocery store in (the Morgan Hill) center. So we have taken the opportunity to better serve our customers.”

The Wal-Mart could prove a touchpoint for debate in a community that has clamored for niche grocers such as Trader Joe’s and Whole Foods, and could eat into sales tax revenues in Gilroy. It’s a decision that’s excited some, angered others and left some in between.

“Wal-Mart is taking over the world,” said Wesley Buntman, an 18-year-old Morgan Hill resident. “I don’t mind it, though. There will be more jobs, and that gives people more opportunities.”

Morgan Hill Mayor Steve Tate welcomed the big-box retailer, often met by fierce opposition by those who say it undercuts local businesses and replaces livable-wage jobs with lower-paying work that offers fewer benefits.

“I do think that Wal-Mart does try to be good corporate citizens, and they do support the cities they move into,” Tate said.

Loscotoff also defended the company, saying “our associates are paid competitive wages. We’ve seen the demand for good quality jobs at Wal-Mart.”

The city also benefits by filling up vacant commercial space in Cochrane Plaza Shopping Center, Tate added.

“We had a long spell in Morgan Hill where one of our shopping centers had a lot of empty stores after some of the bigger stores moved out,” he said. “And that’s not good.”

The reaction was not as warm in Gilroy.

“What can I tell you? As far as the impact, I think the people who live there would go there,” Gilroy Mayor Al Pinheiro said. “I would think that it would have an impact on our Wal-Mart. It doesn’t make me happy. When we approved the Wal-Mart, we didn’t expect them to open a Wal-Mart up there.”

Unlike the city of Gilroy, Morgan Hill officials did not offer the corporation any financial incentives to move in.

“Nothing was offered to them. They worked with the property owner and then let us know,” said Garrett Toy, the director of Morgan Hill’s Department of Business Assistance and Housing Services.

The new store will have a fully stocked grocery section. Because the building is not as large as the one in Gilroy, there will be less retail.

“We just took ownership over of the building,” Loscotoff said. “We’re still developing plans for the interior and exterior. It’s real early in the process. We’re still evaluating the needs of the community to come up with the best fit of merchandise mix.

“Once the plans come in, we’ll review it and approve it,” Ken DeLuna, senior building inspector for Morgan Hill.

Wal-Mart will begin hiring in a few months, before the building is finished. Loscotoff could not say how many people would be hired or the hours of operation. In the run-up to its Sept. 2005 opening, Gilroy’s Wal-Mart Supercenter hired 650 people to staff the building 24 hours a day, seven days a week. Store officials initially predicted it would generate $100 million annually in revenue.