Walmart to close Raymondville store, lay off about 110 workers

RAYMONDVILLE — This city just can’t catch a break.

With an economy still reeling from the closure of the Willacy County Correctional Center last year, Walmart is closing its Raymondville store, laying off about 110 employees.

The store, one of Raymondville’s biggest sources of sales tax revenue since it opened in 2005, will close Jan. 28, Mayor Gilbert Gonzalez said yesterday.

“That’s going to hurt us a lot,” said Catalina Ozuna, executive director of the Raymondville Economic Development Corporation. “For us, it’s a big impact.”

Officials did not have information readily available on the amount of tax revenue the store generates.

But officials projected the store would bank about $400,000 in annual sales tax revenue when it opened.

The city collected $1.4 million in total sales tax revenue last year, state records show.

“It’s going to be a loss in much-needed sales tax dollars,” Gonzalez said.

He said the loss will force city budget cuts.

“Most certainly it will affect our budget,” he said.

Gonzalez said the store employs 110 people, about 55 of whom work full-time at the store.

Walmart officials are closing the Raymondville store because it is the least profitable in the Rio Grande Valley, Ozuna said.

“They’re targeting the least profitable stores,” she said.

Yesterday, Walmart announced plans to close 269 stores, more than half of them in the United States, including its Brownsville store on Padre Island Highway.

The company said more than 95 percent of the U.S. stores are located within 10 miles of other Walmart stores.

Walmart said it would give employees 60 days’ pay if they are unable to transfer to other stores and severance to those eligible.

In the U.S., most targeted locations are small format stores called Walmart Express, launched as a test program in 2011.

The remaining 115 stores are spread over Latin America, with most in Brazil.

Yesterday, Workforce Solutions met with Raymondville EDC officials to help employees facing layoffs, said Laura Cavazos, the agency’s spokeswoman.

“The unemployment rate was hit hard,” Cavazos said, citing the prison closure. “We want to make sure we give them the support they need.”

Next, Cavazos said, agency officials will meet with the store’s employees.

“We’ll give them all the tools they need to apply for unemployment benefits and apply for a new job,” Cavazos said. “Some may be willing to relocate, some not.”

Walmart has a long history with the city.

For years, the world’s largest retailer operated a store at the Raymondville Plaza, generating about $140,000 in annual sales tax revenue there.

In 2005, Walmart closed the store when it opened its Supercenter near the intersection of FM 490 and Interstate 69.

Walmart’s decision to close the store comes as Raymondville and Willacy County struggle in the wake of last March’s closure of the Willacy County Correctional Center.

The layoffs helped drive Willacy County’s unemployment rate to 12.8 percent in November, the Valley’s second-highest jobless rate behind Starr County’s 13.7 percent.

The so-called tent-city prison laid off 400 employees, about half of whom live in Willacy County, officials said.

The prison’s closure plunged Willacy County into a financial crisis, slashing $2.7 million from the county’s $8.1 million general fund budget.

As county commissioners tried to offset a monthly $220,000 shortfall, budget cuts eliminated about 25 jobs, forcing 16 layoffs.

In Raymondville, the closure of the 3,000-bed prison led officials to slash about $600,000 to offset a plunge in water sales.

Raymondville officials projected the prison’s closure would lead to annual losses of about $130,000 to $140,000 in sales tax revenue.