Aggressive efforts by supermarket operators to help revitalize dilapidated inner-city neighborhoods will move forward in the next few weeks as three major projects get under way in Chicago, New York and New Haven, Conn.
In all three instances, retailers are joining with locally based redevelopment agencies to open shopping centers anchored by supermarkets in formerly run-down neighborhoods. The three projects set to get under way shortly are as follows:
In Harlem, N.Y., Pathmark Stores, Woodbridge, N.J., said it expects to begin construction in August on a 50,000-square-foot store scheduled to open next summer. Pathmark is leasing the site from the East Harlem Abyssinian Triangle.
In Chicago, the Hyde Park Cooperative Society, Chicago, said it will break ground in October (following a ceremonial ground-breaking ceremony later this week) for a 41,800-square-foot store in the city's Kenwood section. Hyde Park will lease the store from its supplier, Certified Grocers Midwest, Hodgkins, Ill., which is building the store in conjunction with the Fund for Redevelopment and Revitalization.
In New Haven, Conn., Shaw's Supermarkets, East Bridgewater, Mass., is expected to break ground next month on a 53,000-square-foot store in the city's Dwight section. Shaw's community-based partner in the project is the Greater Dwight Development Corp.
All three stores are being built with support from The Retail Initiative, a New York-based equity fund created in 1994 to stimulate commercial development in inner cities. TRI -- created by the Local Initiatives Support Corp., New York -- controls investments totalling $24 million from 10 companies.
According to Harvey Gutman, Pathmark's senior vice president for retail development, "We believe there are no overriding economic or operating reasons why consumers in inner-city locations should be less well served by modern supermarkets than residents of the suburbs.
"There are certainly some greater challenges in urban areas, including higher land costs, higher construction costs and higher expenses, but we also see great opportunities in such areas."
Celia Slater, manager of community relations for the Food Marketing Institute, Washington, said that, while some supermarkets have never left the inner city, "more companies today are moving back into these urban locations, and we've seen a lot of interest by developers, community groups and local governments to get supermarkets into underserved communities."
Kerri Rogers, vice president at TRI, said future projects involving a Star Market in Boston and an unspecified retail customer of Fleming Cos., Oklahoma City, in Philadelphia are expected to get under way later in the year. She also said TRI is evaluating inner-city locations in Los Angeles; Seattle; Fort Myers, Fla.; and other cities for future development. "While it is true that the inner cities have been shunned in the past by retailers for a myriad of reasons, the retail saturation of the suburbs is causing many retailers to embrace the inner city," Rogers told SN. "Supermarkets in particular have strategically scoped out the urban market for sites that will service a burgeoning consumer market [that is] seeking access to low-cost quality food in full-service facilities."
The 10 corporations investing in the equity fund are The Prudential Insurance Co. of America, Metropolitan Life Foundation, General Electric Capital Corp., J.P. Morgan & Co., Bankers Trust New York Corp., Bank of America, First Interstate Bank of California, Home Savings of America, City of Philadelphia Board of Pensions and Retirement and Great Western Affordable Housing Corp.
According to LISC -- an intermediary between nonprofit groups and the corporations created to redevelop urban sites -- the $24 million in equity investments are funneled through community redevelopment corporations, thereby creating sufficient economic security for national investors to make long-term commitments to inner-city neighborhoods and ensuring that the communities will own and benefit from the shopping centers.
Gutman said Pathmark already operates approximately 25 stores in inner-city locations of New York, New Jersey and Pennsylvania, and plans to begin construction within a year for a new store in Springfield Gardens, Queens. The company is also looking for additional inner-city sites in Philadelphia, he said.
"Many supermarket chains and other retailers have looked at inner-city locations like Harlem and seen only the downside. We are well aware of the realities of Harlem, but we know what we must do to run an excellent store with adequate safety precautions for our customers and employees."
To attain that knowledge, Gutman said Pathmark has worked for several years with the East Harlem Abyssinian Triangle "to understand the opportunities available in the community and to help us run and operate a store that's responsive to the community's needs."
Gutman said the store will be located on 125th Street -- "a major shopping street," he noted -- on a piece of land that had been empty for decades.
In Chicago Dick Fisk, general manager of Hyde Park, said the Kenwood area where the new store will be located "has been in decline for many years. But several dilapidated buildings have already been torn down and others have been rehabilitated, and the area is already being renovated, with people moving into new townhouses."
Hyde Park was familiar with the area, Fisk added, because it has a 36,000-square-foot store a mile away and a 10,000-square-foot store located close by. However, he said he believes the area's population is dense enough so that there will be enough business to support all three locations.
The new store will be 41,800 square feet, with a 13,000-square-foot mezzanine that will accommodate video rental, meeting rooms and offices and 2,000 square feet that will be leased out.