Wal-Mart's Trojan Horse?

author : Trudy Springer topic : Olympia City Council | Wal~Mart

by Trudy Springer

So you think Olympia has a moratorium against large retail stores? Think again. Oh, they passed a moratorium alright, stating that no retail space could exceed 125,000 square feet, but on Wednesday, May 18th the Olympia City Council granted an exemption from the moratorium to Westfield in a 5 to 1 vote.

This exemption states that Westfield cannot exceed 125,000 square feet per floor. The council has, by this ridiculous caving into the demands of Westfield, effectively voided the moratorium.

Just who is Westfield? That's the question I asked myself while listening at a previous study session to one of Westfield's representatives respond to a council member's question with, "that would be getting into restraint of trade issues." Hmm, I thought, that sounded like a veiled threat to me; just who are these people?

Research quickly established that Westfield is to the mall industry, what Wal-Mart is to retail, in my humble opinion anyway.

We are all aware of the fact that Wal-Mart money flows back to Bentonville, Arkansas and in the case of Lowe's Home Centers, it flows back to North Carolina. Well, in the case of Westfield, it really travels - it flows to Sydney, Australia. That's correct: Westfield is an Australian company, owned by the second richest man in Australia, Mr. Frank Lowy, a close personal friend to the richest man in Australia, Rupert Murdoch.

How big is Westfield? As of mid 2003 they own 67 malls in America, 9 in Great Britain, 2 in Ireland, 11 in New Zealand and 40 in Australia. The owner, Frank Lowy, is estimated to be worth 4.2 billion dollars and his empire consists of: Westfield Holdings, Westfield Trust for Australia and New Zealand and Westfield America Trust.

I also discovered that in Connecticut, Westfield owns a mall called The Post in Milford, a neighboring community of New Haven. When the city of New Haven revealed plans to build a mall called the Long Wharf mall, near Yale University in 1998, Westfield immediately filed lawsuits to stop them. They also set up bogus community groups that opposed the New Haven mall. After years of legal costs and counter lawsuits, Westfield prevailed. New Haven gave up and cancelled the mall plans. In Michigan, Westfield in association with Simon Property Group attempted a hostile take-over of the Taubman Center, Inc.; fortunately for Taubman their connections in the state legislature succeeded in passing legislation that strengthened a bill called the "Control Share Acquisitions Act", which stopped the hostile take-over efforts by Westfield. In Sydney, Westfield was successful in stopping a planned competitive mall at a place called Orange Grove Road, which raises questions to this day about who in government was bought off to help Westfield kill their competitor's efforts.

No wonder, I thought, Westfield raised the 'restraint of trade' issue; they're very experienced in that arena.

My fears about Westfield requesting an exemption to the moratorium was that they could very likely put one of these big box monsters in the Capital Mall as an 'anchor' store. Sure enough, research confirmed my fears - in Sacramento, California, the council members and community were concerned that Westfield would put a Wal-Mart in the mall there. Westfield, at first, would only state that they were in negotiations with a possible 'anchor' tenant, but when a reporter researched and found out that it was Wal-Mart, Westfield admitted that their goal was to put a Wal-Mart in many of their malls. They succeeded in San Diego and are still working on getting Wal-Mart as a tenant in the Sacramento mall. I dutifully passed this research on to the Olympia City Council; I also testified during public comment what Westfield's record was regarding putting Wal-Mart stores in their malls, and I gave copies of this research to the council as well. The result of these efforts was evident in that 5 to 1 vote for Westfield, which did not surprise me based on reactions I received earlier in my research efforts.

When I approached a council member shortly after beginning my research and stated that "Westfield could be Wal-Marts' Trojan horse", it was as if I had tasered them! They immediately sputtered something about, we need that revenue to keep the roads paved etc., etc., etc. I knew then that Westfield would succeed in getting their exemption, as Bob Dylan wrote in one of his songs, "Money doesn't talk . . . .it screams."

In Westfield's case money screams around the world, from New South Wales, Auckland New Zealand, Sydney, Australia, Great Britain, Ireland and all across America you can hear the echoes of it. In Australia questions about Westfield lobbying the government and the government responding to Westfield's benefit caused a lot of concern. Here's a quote from an article written July 16, 2004 at Crikey.com in Australia by Bill Eclairs and Stephen Mayne, which will aid in creating a clearer picture of Westfield:

"Westfield has no qualms in paying whoever they like to get their shopping centres built and to prevent competitors from cropping up. Try this list for size:

Ken Hooper was paid more than $100,000 to create a bogus community group

CFMEU (Construction, Forest, Mining and Energy Union) got $80,000 for industrial piece on 3 Victorian sites

$750,000 for British Labor Party funds raiser and Blair mate Lord Levy

$100,000 to green groups opposing a rival shopping centre outside Sacramento

Millions each year in political donations around the world

$70,000 defamation settlement to a Gold Coast councilor who allegedly changed his stance on a planning approval

These scandals were serious enough to warrant these remarks from the Chairman's address at a meeting of members of Westfield Holdings, LTD, on Monday, April 29, 2002:

"I'd like to take this opportunity to talk to you about a few issues arising from recent media reports dealing with our business in the United Kingdom and United States . . . Firstly, I'd like to explain how we go about establishing ourselves in a new market. Entering a new market is a tough business. I don't simply arrive at Kennedy Airport in New York, or Heathrow in London or Amsterdam Airport, and hang out a sign saying: "We want to buy shopping centres" and sit back waiting to be bowled over with offers . . . We spend a long time-years-getting to know the market, who the key players are, forging relationships and potential associations, making ourselves known to people and institutions which might one day lead to an opportunity for Westfield. To undertake this task we retain a wide range of consultants, advisers, bankers-and not all of them work out. We invest considerable sums of money in this process that is commensurate with the scale of our business. Lord Levy was one such consultant and we asked him to explore business opportunities for us. Lord Levy undertook no political lobbying or government-related work on our behalf. To gain approvals in the UK, we deal with local councils, as we do here in Australia and elsewhere . . . "

"I come now to the second issue, which is about protecting and increasing asset value for shareholders . . . As part of the company's asset management responsibilities we monitor the market and assess the various opportunities and threats to our business, and sometimes this results in us opposing a rival development."

"Media reports last week dealt with our support of third parties that are opposing rival developments, in this case for community and environmental groups who shared a common interest with us in wanting to prevent a particular mall development from going ahead . . . Now please understand that I don't pretend we get it right every time. Sometimes we slip up and in this area we got it wrong at the Arnott's site here in Sydney a few years ago."

This is the company that members of the Olympia City Council exempted from the moratorium in order to 'build trust' and bring in $300 million in revenues, both staff and council members stating that there is very little risk that Westfield will bring in one of the big box retailers, such as Wal-Mart. Let us all hope that they are correct and that this does not turn out to be misplaced trust. I for one, feel that the risk of Capital Mall being a new location for a large Wal-Mart Supercenter is very high. I will be very happy if I am proven wrong.