Yakima County Development Association - Wal-Mart in Yakima

Wal-Mart

New Vision Helps Walmart Locate New Distribution Center in Grandview

It started with a mysterious phone called from Yeager Real Estate.  It turned into the biggest business recruitment success story in our Valley’s history.  New Vision saw the initial phone call turn into  numerous site visits.  Along the way our staff was quietly introduced to key executives with Walmart.  The company was searching for 120+ acre sites that could accommodate a new distribution center Walmart needed to serve its stores throughout the Pacific Northwest.   Even though the company was focused on Grandview, New Vision was able to rally all the communities in the  lower Yakima Valley to actively support the project.  According to company officials this teamwork  was one of the primary reasons why Walmart was sold on the area.

Fun Facts About Walmart's Facility:

  • The Walmart Distribution Center is 894,000 square feet, enough to fit 20 football fields;
  • It takes 9265 trailer loads (132 miles of trucks bumper to bumper) to fill the facility;
  • The facility ships 200,000-250,000 cases of food per day.

Walmart's Return on Investment for the Yakima Valley - The following information details the direct and multiplier benefits of Walmart's distribution center to Yakima County’s economy

Construction Phase. Investments made by Wal-Mart total approximately $42.0 million in building construction. Wal-Mart’s investment stimulated $18.9 million in additional related business revenue, including revenues from local employee spending. The total increase in local construction related business revenue about $60.9 million.

Figure 15.      Construction Phase Economic Contribution of Wal-Mart

 

Economic Benefits of Construction

Impact Category

Direct

Indirect

Total

Capital Investment

$42,000,000

– 

– 

New Building

$42,000,000

$18,900,000

$60,900,000

Construction Jobs

440

170

610

Construction Payroll

$22,440,000

$6,510,000

$28,950,000

Average Wage

$51,000

$38,300

$47,500

 Source:           Cascade Planning Group – based upon IMPLAN Input-Output model for Yakima County.

Construction and equipment procurement activity generated 440 jobs directly, and an additional 170 indirect and induced jobs due to economic multiplier effects. This employment generated a total of $29.0 million (in current economic values) in construction related wage income.

Annual Business Income. Wal-Mart produces an estimated $98.4 million of output in Yakima County. Wal-Mart and their employees also purchase goods and services from other businesses in the county. This additional activity represents the indirect multiplier (or spin-off) effect.[i] The dollar volume of the indirect business activity is estimated to be $37.4 million annually.

Annual Taxable Sales & Property Values.  An estimated $5.9 million of employee payroll is spent on local taxable goods and services. Employees also spend a portion of their income on housing. This analysis assumes employees spend one-third of their income on housing, which is estimated at a net present property value of $108.8 million.

Annual Employment & Income. Wal-Mart directly employs 600 workers. These workers are estimated to receive about $23.7 million in wages annually (not including benefits), for an average wage of about $39,500 per year.

This economic activity is estimated to support an additional 340 jobs throughout the economy countywide. The total employment impact is 940 jobs. Total annual wages, including economic multiplier effects, are estimated at $32.5 million.

Figure 16.      Annual Operational Economic Contributions of Wal-Mart

 

Annual Economic Benefits

Impact Category

Direct

Indirect

Total

Business Revenues

$98,400,000

$37,400,000

$135,800,000

Number of Jobs

600

340

940

Total Payroll

$23,712,000

$8,788,000

$32,500,000

– Average Wage

$39,500

$25,800

$34,600

Taxable Retail Purchases

$5,900,000

   
Supported Housing Values

$108,800,000

   

Source:            Cascade Planning Group – based upon IMPLAN Input-Output model for Yakima County.

Tax Benefits. In addition to the private sector economic benefits, the expanded business activity also generates increased taxes for state and local government.

Wal-Mart directly invested $42.0 million in business capital. In addition, income spent on housing from employees equates to an estimated $108.8 million in property values. Taken together, these activities support approximately $1.8 million in property tax revenues to state and local government.

Retail spending by employees also generates sales taxes. As noted above, an estimated $5.9 million is spent annually at local retail stores. This retail spending is estimated to generate $94,400 per year for local governments and $383,500 annually to the state – for a combined total of $477,900 in annual state and local sales tax revenue. Wal-Mart owed no sales tax as they received the exemption on their entire $42 million investment

Figure 17.      Fiscal Benefits Associated with Wal-Mart

Tax Generated

Construction

Operations

Property Taxes:    
Business Capital Investment  

$42,000,000

Employee Housing Values  

$108,800,000

Supported Assessed Value  

$150,800,000

Average Property Tax Rate  

$11.78

Property Taxes  

$1,776,424

Retail Sales Tax:    
Business Capital Investment

$0

 
Employee Taxable Retail Purchases  

$5,900,000

Sales Tax Rate

8.1%

8.1%

State & Local Sales Taxes

$0

$477,900

Source:            Cascade Planning Group.



[i]       Multiplier effects with this analysis include what are technically termed as indirect effects (from added business spending) and induced effects (from added household spending).


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