Wal-Mart continues Los Angeles expansion in the wake of Burbank legal challenge

After three Burbank residents filed a lawsuit, a preliminary injunction issued by a Los Angeles Superior Court judge last week halted construction of a Wal-Mart Supercenter in the southern California city. The lawsuit could force Burbank to prove that the addition of a Wal-Mart will not cause substantial traffic concerns or harm local businesses, and has forced approval of Wal-Mart building permits to be suspended pending a trial. Prior to the lawsuit, Wal-Mart had been planning to renovate a closed Great Indoors home furnishings store at Burbank's Empire Center in time for a grand opening in mid- to late 2013. The addition of Wal-Mart stores to the network of retail establishments surrounding real estate in Los Angeles could potentially increase property values - although community groups have voiced opposition to the property renovation funded by the corporation.

Resident groups contend that traffic and noise caused by big box retailers offset the positive effects, including contributions to the local economy, new Wal-Mart locations could bring to surrounding communities. However, recently published research conducted by two business professors suggests that Wal-Mart stores can have a positive impact on the housing market. The study found that the value of real estate within half a mile of new stores increased by $7,000 on average, and went up by $4,000 for homes half a mile to a mile away from Wal-Mart locations. According to the professors, convenient access to lower retail prices offered by Wal-Mart is more important than any negative impact of Wal-Mart expansion. The study also pointed out that Wal-Mart often attracts new businesses to areas previously overlooked by commercial real estate investors.

Wal-Mart frequently faces opposition when expanding in Los Angeles, and organized labor and community groups continue to fight expansion proposals. Last year, the corporation shifted its focus to renovation of real estate in Los Angeles left vacant by other retailers since expansion into existing real estate that requires only routine permits and simplifies the process of development in accordance to city zoning ordinances.

As Wal-Mart prepares to fight the legal challenges to its proposed Burbank location, it confirmed reports that a new store is planned at the West Covina Mall.The West Covina Wal-Mart is replacing a vacant Mervyns at the Eastland Shopping Center, and the world's largest retailer began interviewing applicants in a nearby office building this week. The new Wal-Mart will eventually contribute 150 jobs to the local economy, and is taking over a two-story, 120,000 square foot space which has been vacant for more than three years.