Caught red-handed? Civil rights group charges Wal-Mart with retail redlining.

Consider it the corporate world's dirty little secret. Only the practice of corporate redlining really isn't that much of a secret. Business giants, usually saying they're fearful of high crime and insurance rates, often find a multitude of reasons not to set up shop in predominantly African American communities. But this institutionalized practice generally receives little public exposure--until now, that is.

Wal-Mart Stores Inc., a retailer with outlets across the country, is being hauled into court and sued for $150 million for rejecting a proposal to build a store in Pine Lawn, a predominantly black St. Louis suburb. The site was rejected, developers charge, despite a study indicating that Pine Lawn's economic demographics are superior to those of a nonblack area where Wal-Mart recently constructed a store. According to Eric Vickers, a St. Louis attorney handling the case, the suit is one of the first to present a legal challenge to retail redlining.

The industry practice of retail redlining has caused no small shortage of problems in black communities, says Vickers, declaring that it "takes jobs out of the black community, reduces the tax base and the property in the community." He adds: "Crime is high because there's no economic development in the area, but that's not a valid excuse not to build there. It's like saying the kids are stupid so let's not build a school. The rationale doesn't work."

The three plaintiffs in the case are the Washington-based Minority Business Enterprise Legal Defense and Education Fund; PLEA, a corporation designed to improve the quality of life in Pine Lawn; and King Management, a black-owned business that hoped to develop a major corner in Pine Lawn as an upscale retail shopping center for the community. But Mathew Foggy Jr., who owns King Management, says securing an anchor tenant for the project was crucial for developing the deal.

Foggy purchased the 7-acre center eight years ago for under $1 million. He's invested another $1.5 million in marketing and feasibility studies and additional land. But efforts, he says, have been hindered because he can't attract a big-name tenant to the site, despite the fact the area is part of a state Enterprise Zone, whose tenants would qualify for significant tax breaks.

"We compared our site with a site they currently have in Springfield, Mo.," says Foggy. "The demographics showed we have four times the number of people in a three-mile radius and a gross income of $1.9 billion. But when we sent in a request, we got a letter that essentially said thanks but no thanks."

Wal-Mart, however, says race plays no part in its decision on where to place a store. "Race is not an issue, and it's not a factor," says Jay Allen, Wal-Mart's vice president of public affairs, who says the company has approximately 20 stores in the St. Louis area. "We have hundreds of stores in towns and cities that have significant minority populations. But just because a developer thinks he has a great site for a store doesn't mean it's right for us."

The Minority Business Enterprise Legal Defense and Education Fund spearheaded a successful lawsuit against Burger King in 1988 for what it charged were discriminatory practices in awarding franchises. The suit was settled when Burger King agreed to award more franchises to minority owners.

"At the broad level, we hope that this case will lead to a public policy that prohibits commercial retail redlining in minority communities," says Anthony Robinson, president of the legal defense organization. "Many corporate giants don't feel the need to build in black communities because they know the business will come to them regardless. There's just not a return of jobs and economic development coming back."

If nothing else, corporations should be put on notice that the practice of retail redlining won't be ignored any longer, Vickers says. "The practice has to end. This has to send a signal to the rest of the corporate community that they can't discriminate on where they locate their stores."