AFTER LOSS OF MARKETS, NY MAY BOOST GROCERIES

City Limits WEEKLY
Week of: April 21, 2008
Number: 636

AFTER LOSS OF MARKETS,
NY MAY BOOST GROCERIES
New York City has lost supermarkets as rents have risen, but the
demand for fresh food is high as ever. State officials are looking at
how to help. 

By Tracie McMillan

While the city's trying to increase the number of produce carts and
encourage bodegas to carry healthier food, state officials are angling
for bigger game: Supermarkets.

Agriculture officials said they're hoping to establish a program to
boost supermarket development in underserved communities, basing the
effort on a Pennsylvania program – the $120 million Fresh Food
Financing Initiative – that's been on the books since 2004. Widely
considered a national model, Pennsylvania's program has already helped
to renovate or build 50 food stores statewide, all in underserved
areas, since its inception.

The Penn program encourages supermarket development by coordinating an
array of funding sources, including the New Markets Tax Credit,
private foundation grants, and municipal and state development
funding. To receive funding assistance, stores must be located in low-
or moderate-income census tracts; provide a full selection of fresh
foods; and be located in areas where fresh food is lacking.

"I think we're on a track that will lead to better food access in
lower-income communities," said New York State Agriculture
Commissioner Patrick Hooker at an April 3 "listening session" of the
New York State Council on Food Policy. Founded last year to help
coordinate and set priorities for the state's food system, the council
will be holding similar sessions around the state, including one
slated for late May in Harlem (details below).

"We're familiar with [the effort in] Pennsylvania," said Hooker,
adding that he'd held agency-level meetings with Pennsylvania
officials, as well as supermarket industry leaders in New York. "I'm
looking forward to moving ahead with that." New York wouldn't be the
first to mimic the Keystone State's efforts: cities such as Baltimore,
Washington D.C. and Chicago have all put energy into fostering
supermarket development, and other cities like Detroit are exploring
their options.

In New York, the project is still in early discussion stages.
Nonetheless, the effort could find a welcoming home here. City
residents have lost one-third of their supermarkets in recent years,
dropping from 1,312 in 2002 to 877 in 2008, according to a market
analysis done by F&D Reports, a research group focused on food retail
and distribution. That loss, said F&D's Larry Sarf, is due to one
thing: Skyrocketing rents. Twenty years ago, the industry average here
was to pay 2 percent of gross sales in rent; today, the average is 12
percent. "Everything is driven by real estate values," Sarf said of
the trend. "That's what's hurting the supermarket operator ... they
can't make it work."

Losing markets can be more than just an inconvenience—it might well
worsen residents' health. For every additional supermarket in a census
tract, fruit and vegetable consumption increases by as much as 32
percent, according to an American Journal of Public Health study from
2002.

Bringing supermarkets into low-income neighborhoods certainly sounds
like a good idea to Cynthia Butts, a longtime Fort Greene resident and
a community organizer with Families United for Racial and Economic
Equality. When developer John Catsimatidis closed a low-rise shopping
center on Myrtle Avenue—and the Associated supermarket within it—in
2006, and later razed it to make way for a condominium development,
Butts and her neighbors were left without a convenient, high-quality
supermarket. (Catsimatidis, who owns the Gristede's supermarket chain,
has said he will include a new market in the commercial space of the
new building.)

With that in mind, said Butts, anything that makes it easier to get
markets into a neighborhood sounded good to her. "I think the proposal
is great if you want to fairly put a supermarket that's going to give
us straight-from-the-farm, fresh-picked food like you would do in any
other neighborhood," said Butts upon hearing of the Pennsylvania
program. "Just because we're low-income, that doesn't mean we don't
have the same needs. We do like vegetables around here."

It's a sentiment that F&D's Sarf agrees with. "The best area for a
supermarket operator would be in … the poor areas," said Sarf, citing
a demand for economical shopping and supermarkets' proficiency in
administering public benefits programs like food stamps and the Women,
Infants and Children program. "But they don't have the ability to pay
the rents."

- Tracie McMillan