Wal-Mart wants to build a distribution center similar to this one outside Bentonville, Ark., in the town of Killingly.
A small town on the state’s eastern border is experiencing some growing pains as Wal-Mart has proposed construction of a distribution center just off Interstate 395.
The town of Killingly, which was once known for its textile mills, has been experiencing growth in its industrial sector during the last few years. Last year Wal-Mart approached the town looking to build a distribution center totaling more than 1 million square feet and costing upward of $60 million.
Not surprisingly, the project has run against opposition from residents of the town. The area, at the intersection of I-395 and Westcott Road, is zoned for a business park and requires a change in the ordinance in order for the project to go through.
Project opponents cite the fact that the 350-acre site is currently zoned for a business park. The Planning and Zoning Commission has held several public hearings about the issue, and will hold a vote later this month to decide whether to change the zone to industrial.
“No business parks are moving around – they’re in a slump,” said Elsie Bisset, the town’s economic development coordinator. “There’s so much office space in Connecticut that it’s highly unlikely that a business park, or one owner, is going to buy 350 acres in Killingly. The development costs are going to be huge.”
More than a dozen private owners pooled their smaller parcels together to create the large, 350-acre site.
The town of Killingly itself has been successful over the last few years, filling its industrial park to capacity. The town recently sold another 70 acres to expand the park. Staples has a distribution center in the town, as does Pepsi/Frito Lay.
Many of the developments are located within the Eastern Connecticut Enterprise Corridor that parallels I-395 from Thompson to Griswold. Economic incentives are given from the state to companies opening up shop in the corridor. Those include an 80 percent tax abatement for the first five years; the state and town contribute 40 percent apiece, leaving only 20 percent for the business to be concerned about.
According to Bisset, the affordability of the land along with access to the highway has made Killingly an attractive place for some businesses.
“It won’t be a small town anymore,” said Gail Crowley, who moved to Killingly a year ago. “We had wanted to move to a small town, and I feel that bringing in industry and large business is only going to take that away.”
‘A Tight Ship’
Colleen Sheridan, senior managing director of Insignia/ESG in Stamford, said the act of courting a small town with an industrial development can be difficult.
She explained that generally developers try to maximize the density they can put on a site while residents typically would like to see less density. That scenario often causes tension between the townspeople and the developers.
“With a new development comes a myriad of problems that impact surrounding neighborhoods, such as additional traffic, additional tax burden for police and infrastructure, sewage capacity, water delivery and so on. You have this dichotomy of interests of developer trying to maximize the site, the town calculating the tax generated from the development offset by cost of providing services and then the un-quantifiable issues of quality of life,” said Sheridan. “What does additional traffic and congestion do to the quality of life?”
“The town will have to absorb [the cost of] the extra policeman and services if Wal-Mart comes in,” said Crowley.
Opposition groups have been frequenting the planning and zoning public hearings. They have also placed ads in local papers and distributed signs throughout the town.
“That’s pretty much all we can do,” said Crowley. “We just have to sit and hope that somebody has a little common sense about this.”
Crowley said that with her husband nearing retirement age, they would think about moving from Killingly if the Wal-Mart center were to be built.
“We love our location. We love that it’s country, and it’s what we’ve always wanted. But we want a small town so if Wal-Mart comes in, we’ll probably move out.”
Sheridan noted as a general observation that developers “probably don’t engage the local community enough before they announce their plans.” Often developers are eager to secure the site before they announce any plans for development, leaving the town and its people out of the process.
Increasingly, residents have had greater say in developments, causing Sheridan to remark that the process has become “not just a two-way conversation, but a three-way between the community, the town and the developer.”
David Flanagan, a truck driver, is interested in bringing the Wal-Mart distribution center to his town. He offered a unique perspective, having driven through other Wal-Mart centers in the country.
“When I went there [a Wal-Mart distribution center] I was surprised at how clean it was. I pulled in there in the summer and left the truck running to stay cool. The workers came running out and told me to shut down. They don’t allow that type of stuff,” said Flanagan.
He said that compared to other distribution centers he’s frequented, “Wal-Mart runs a tight ship.”
Flanagan’s main concern is the unemployment level in Killingly. He would like to see jobs created and he would also like to see higher tax revenues.
“The town needs a school, and we’re looking at the possibility building a school with help from the state. People realize that we need a school but they don’t want to pay for it. I feel that getting Wal-Mart in here will not only help with taxes it will also cut down on the unemployment,” said Flanagan.
“I have searched and talked with people at Wal-Mart and I have not found one distribution center that has closed down in 40 years. I don’t see that this center will go anyplace. They’ll move in and that’ll be that,” Flanagan said. “It will not hurt this town whatsoever.”
Regarding the idea of waiting for a business park, Flanagan said he would welcome the idea but doesn’t feel that one will come.
“We don’t have too many business park people. Mills built this town, not business parks. It wouldn’t be cost-effective to do a business park,” he said. Flanagan added that there is a lot of site work to be done, including a significant amount of rock ledge that will need to be broken down.
Sheridan noted, “You don’t see a lot of industrial development in Connecticut because the cost of doing business is prohibitive. Everything from energy to workman’s compensation, to real estate taxes, to the cost of the land is expensive in the region, so industry is kind of a shrinking commodity in the Northeast.
“Litigation is also very costly, and the courts are littered with towns suing developers, and developers suing towns, and residents suing both. The best thing a developer can do is avoid that type of litigation, which is expensive not only in terms of actual dollars but in opportunity costs as well. Having your focus diverted for years through the court system is not a cost-effective way of doing business.”
Keith Morris, a spokesman for Wal-Mart, said one of the biggest reasons for choosing the site was that it was right off the highway and the town had been marketing it.
Of the 350 acres, Wal-Mart plans to only use 119 for the facility, using a natural rock buffer to screen the site from the road. Wal-Mart has no other options for sites, and Morris said that the company has invested all of its time and enegry in Killingly, working since October of 2002 on the project.
The distribution center is a standard design used by the more than 50 other centers throughout the country. The closet center is in Raymond, N.H., and was built roughly five years ago.
In order to gauge the level of opposition, Wal-Mart conducted a poll. Those surveyed were asked if they were familiar with the project, and, if they answered yes, they were asked if they were in favor of it. According to Morris, 60 percent were in favor of the center, 25 percent were opposed and 15 percent were undecided.
“You would think that a facilty this size would cause a lot of opposition, but typically with a distribution center is hasn’t been the case. The main reason has been that you can’t really locate it in a downtown location; it has to be along an Interstate corridor with access for the trucks. So usually a suitable site is already planned for that type of activity and designated for commercial or industrial space by the town,” said Morris. “It’s clearly the case here as Killingly has been been actively marketing the site and haven’t had any interest until now.”
In an unusual move, Wal-Mart has offered to pay for any new students that are a direct result from the distibution center.
“It’s something we’ve never done before,” said Morris, noting that the town had raised the issue of its already overcrowded schools and the concern that the facilty would bring in more students.
“Based on our experience there are not typically mass numbers of people that move into the town and start working with us,” added Morris, noting that the company is pledging to spend a total of $8,500 for each student who enters the school system as a direct result of someone moving into Killingly to work in the distribution center.
If all goes according to Wal-Mart’s plan, the distribution center would open in 2005 and initially would have 600 employees, working up to 1,000 in three years. Of those, 98 percent would be full-time employees making between $12 and $18 an hour.
