[COMM-ORG] query: getting a grocery store

Tue Jun 23 14:38:09 CDT 2009

[ed:  thanks to Shannah, Karen, Richard, Amy, Jacob, and Joshua/Mel for 
replying to Mike's query.]

From: Shannah Kurland <shannah_k at hotmail.com>

Providence did a $5 million TIF in about 2003 for a shopping plaza, the 
biggest piece of which was a large chain grocery store.  In this case, 
it was a gentrification project, and TIF's in general can be scary 
stuff, but it covers your main point - that public subsidies for grocery 
stores has lots of precedent.
(the grocery store later closed b/c it was too high end, and neighbors 
prefered to wait 20-30 minutes in line at the low price store, so not 
enough customers)
Another one in Providence got a loan from the city's low interest 
economic development loan fund, funded by CDBG.  Can't remember exactly 
when, late 90's i believe. 

**********************************

From: "Gray, Karen A." <karen.gray at ou.edu>

I think they did in Philadelphia. http://www.upenn.edu/ccp/index.php--- 
I'd contact someone at the Netter Center.
KG

*****************************

From:
Richard Layman <rlaymandc at yahoo.com>
Date:
Mon, 22 Jun 2009 08:45:25 -0700 (PDT)
To:
colist at comm-org.wisc.edu

There are various efforts.  The Food Trust in Philadelphia has an active 
program.  That program has been extended to other areas in Pennsylvania, 
with state support.  While a lot of programs that provide assistance 
have  existed/exist in various places, a lot of times they fail.  (I can 
think of stores/small chains in Richmond, Philadelphia, Washington and 
Boston that failed, despite public and private funding support.)

(Social objectives and business objectives don't often mix.)

There are some issues.  One is that the supermarket industry sector has 
suburbanized and has "supersized" stores into formats that aren't 
conducive to urban locations, and has a set of location decision 
heuristics that don't favor urban locales.  Another is that urban stores 
face other issues such as higher costs due to personnel issues as well 
as a higher rate of theft.

All of the incentives you mention are used in various ways.  If the 
proprietors aren't experienced and good managers (and even people with 
extensive industry experience have failed) they will fail.

Remember that a typical supermarket does $500,000 of sales in a week.  
So they need thousands of customers.

I do think there are a couple of models that can work.  First, the 
smaller format store.  Think of the old days through the 1950s, with 
smaller local or chain stores, like the A&P in the French Quarter in New 
Orleans, a store which still exists.

In the Mid-Atlantic there is a small company called Murry's that focuses 
on large package sizes, but has added produce sections to a number of 
their in-city stores, where previously they didn't sell produce.  Still, 
certain of these stores rely on food stamp purchases for a significant 
portion of their sales.

Another model would be to think of a public market but within a grocery 
store.  Whereas one person likely would have a difficult time funding a 
full service store, if you think of breaking up a store into at least 5 
departments (beverages/coffee/tea, meats, seafood, bakery, produce, 
nonperishables, frozen), it is possible to create a business model that 
can work.  An upscale version of this is present in the Belvedere Market 
in northeast Baltimore.

Another option is to contact IGA (a grocery store cooperative) and/or 
the National Grocers Assn. (the trade association for smaller 
supermarkets) and see if there are companies active in your region 
and/or do they have interested proprietors who may be interested in an 
urban location. In the DC region there are also small Hispanic/Lation 
and Asian companies that operate a few store locations.

There are a number of examples around the country of small and more 
upscale urban groceries in places like Cleveland, Portland, and Dallas.

The co-op model is another, although I am not personally familiar with 
any coops that function in lower income areas.  Maybe Glut in Mt. 
Rainier, Maryland, but it doesn't rely on low-income customers.  There 
is a trade association.  Plus, co-ops can get financing from the 
National Co-operative Bank.

Another is to develop a combination small (specialty) grocery + cafe.  
It could be a food service training facility as well.  So not just a 
retail business, but a job training facility and perhaps eligible for a 
variety of funding streams.

Also Supervalu (a major food wholesaler-distributor as well as the 
operator of a number of regional supermarket chains) has a division 
called Sav-a-Lot which is a limited assortment store focused on 
discounted pricing that is run on a franchise basis.

http://save-a-lot.com/about-save-a-lot/become-owner

I think there might be another company that does this too, although the 
name escapes me.

DC has passed a law that all new supermarkets are eligible for property 
tax and other abatements.  (You can't do TIF financing for a grocery 
store in DC because nonprepared food sales are exempt from sales 
taxes.)  Not many stores have used this credit.  A number of stores have 
been placed in shopping centers/buildings that have been part of larger 
renewal efforts that have rec'd various forms of subsidy/govt. assistance.

Richard Layman
Citizens Planning Coalition, DC
and http://urbanplacesandspaces.blogspot.com
and board member, Eastern Market public market, DC
and commercial district revitalization consultant, Economic Development 
Visions, DC

***********************

From: "Amy S. Mondloch" <amy at grassrootsleadershipcollege.org>

Hello all--

In regards to Mike's question on organizing to get a grocery store, there
was a successful campaign a couple years ago on Madison's north side.  The
Roundy's store had left and the neighborhood was left without adequate
access to food.  The Northside Planning Council organized on several fronts,
the most interesting of which (to me) was putting together a survey that
proved the north side was a food desert.  They took that information to the
mayor and pressured him to help.  People on the street, the survey, and
negotiations with the city led to getting a new store, Pierces, which is
locally owned and designed with the community in mind. 

You can find out more about the campaign by checking out  
http://www.northsideplanningcouncil.org

They've gotten new staff since the campaign, but I am sure that Tim(their
current lead facilitator) can explain the campaign step by step.  If not,
let me know and I can check with the old staff on whether they are open to
being contacted on this.

Peace,
amy
Everyone A Learner, Everyone A Teacher, Everyone A Leader

You can help grow the grassroots by
making a donation at our website www.grassrootsleadershipcollege.org
or donating with every web search you do through www.goodsearch.com
It's easy.  Support the Grassroots!

Amy S Mondloch
Executive Director
Grassroots Leadership College
1321 E. Mifflin St. Suite 201
Madison, WI
53703
phone: 608-441-0085
fax:  608-204-0835
amy at grassrootsleadershipcollege.org
www.grassrootsleadershipcollege.org

*********************************

From: Jacob and Sarah Lesniewski <jshm at uchicago.edu>

You should check out the "fresh food financing intiative"
http://www.thefoodtrust.org/php/programs/super.market.campaig
n.php

That the food trust in Philly is invovled in.

Good luck
Jacob Lesniewski
University of Chicago

*******************************

From: Joshua Laskin <joshualaskin at yahoo.com>

--- On Mon, 6/22/09, Mel Braverman <melbrave at msn.com> wrote:

Mike:
The North Alabama Food Bank in Huntsville, Alabama
is involved in this process and pretty far along.
Contact Kathryn Strickland: 256 655 8585
Best of luck
Mel

On 6/21/2009 4:56 PM, Discussion list for COMM-ORG wrote:
> --------
> This is a COMM-ORG 'colist' message.
> All replies to this message come to COMM-ORG only.
> --------
>  
> From: Mike Hodge <mhodge at tnrc.net>
>
>
> Hi COMM-ORG,
>
> I am working with a neighborhood group here in Nashville, that has been 
> without a grocery store for many years.   
>
> Urban Renewal took out 10-15 "mom and pop" stores and built much public 
> housing in the area.  After about 15 years or so, and much work by 
> neighbors and a local church pastor, a mid-sized grocery store was built 
> in the area.   There are over 300 units of family public housing across 
> the street from the site, along with about 280 units of high-rise 
> housing for the elderly and handicapped.   More units of "publicly 
> assisted" housing are just down the street.
>
> The grocery store operated fairly well, although it changed hands 
> several times.   Then the property owner insisted on higher rents.   The 
> building has now been vacant for seven years -- due mainly to a crazy 
> property owner.  The neighborhood group has met with our city 
> development agency, as well as other agencies and elected officials.   
> In recent meetings, the development agency rep acted as though he had 
> never heard of public funds being used to assist in the acquisition or 
> support of a grocery store for an under-served low-income 
> neighborhood.   I had a small amount of info on the possible use of 
> stimulus funds for this -- a very small amount of info.
>
> SO ---- The question I am asking all of you is:   Do you know any 
> specific stories of municipalities assisting in the acquisition of 
> property or the operation of a grocery store through the use of public 
> funds such as CDBG, stimulus funds, tax increment financing, etc???   I 
> KNOW this has been done, but I'd like to be able to have some specific 
> stories -- and then be able to talk to the city agencies in whatever 
> city this took place and possibly with whatever grocery went in.
>
> Thanks in advance for any help you can provide!
>
> Mike Hodge
> Neighborhoods Resource Center
> Nashville, TN
>
>
>
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