Grocery Stores in City Neighborhoods:

Supporting access to food choices, livable neighborhoods, and entrepreneurial opportunities in Madison, Wisconsin

Heather Stouder, Author and Intern

Office of the Mayor Madison, Wisconsin Mayor David J. Cieslewicz May, 2004

Table of Contents
Acknowledgements ---------------------------------------------------------------------------------------------------------Executive Summary --------------------------------------------------------------------------------------------------------Introduction -------------------------------------------------------------------------------------------------------------------Food retail as a public issue ---------------------------------------------------------------------------------------------Access to food choices ----------------------------------------------------------------------------------------------Livable and walkable neighborhoods ----------------------------------------------------------------------------Food-related entrepreneurial opportunities ---------------------------------------------------------------------Overview of trends in the food retail industry ------------------------------------------------------------------------Trends in consumer purchasing habits --------------------------------------------------------------------------Food retailing trends: Consolidation & standardization ------------------------------------------------------Food distribution -------------------------------------------------------------------------------------------------------Efforts by other cities to attract grocery stores in other cities ----------------------------------------------------Description of the diversity of existing grocery stores in Madison ----------------------------------------------Historical city intervention with grocery stores in Madison -------------------------------------------------------Updates on three recently closed sites --------------------------------------------------------------------------------Kohls Food Emporium, 2525 E. Washington Ave. -----------------------------------------------------------Kohls Food Emporium, Sherman Plaza, 2921 N. Sherman -----------------------------------------------Ken Kopps, 1864 Monroe St. --------------------------------------------------------------------------------------Goals and policy options for the city to preserve and encourage neighborhood grocery stores -------Potential partners -----------------------------------------------------------------------------------------------------------Conclusion --------------------------------------------------------------------------------------------------------------------Bibliography ------------------------------------------------------------------------------------------------------------------By Late May, 2004, this report will also be available on-line at: http://www.cityofmadison.com and http://businessmadison.com 3 4 8 9 9 11 13 14 14 14 15 16 18 22 24 24 25 27 28 33 35 36

Acknowledgements
In the ways it affects individuals, cities, and the fabric of communities, food retailing is an extremely complicated issue. Determining appropriate and feasible ways for the City of Madison to support and encourage neighborhood grocery stores is an on-going, collective effort. Hopefully, this document provides a point from which City staff and citizens can move forward in support of equitable access to food choices and neighborhood grocery stores. Thank you to the many individuals that contributed their time, insights, and expertise to this report specifically, and thank you to those who will continue to shape it in the future. City of Madison Mayors Office David J. Cieslewicz, Mayor Jeanne Hoffman, Assistant to the Mayor City of Madison Department of Planning & Development Michael Gay Joe Gromacki Hickory Hurie Don Marx Brad Murphy Katherine Naherny Mark Olinger Peggy Yessa Other Contributors Susan Hill, Northside Planning Council Matthew Kures, UW Extension Community Economic Development Bill Lanier, Madison Metropolitan Planning Organization Todd McGrath, McGrath & Associates Steve McKenzie, Jenifer St. Market Lynn Pitman, Monroe St. Co-op Jim Powell, Northside Planning Council Brad Ricker, Monroe St. Co-op Mary Rouse, Regent St. Co-op Barbara Smith, Focus on Energy, Wisconsin Department of Administration Tim Sobota, Metro Transit, City of Madison Eric Stonebraker, Previous Intern, City of Madison

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Executive Summary
Guiding the decisions of food retailers- and providing support for them- in order to ensure equitable access to food and promote livable, walkable neighborhoods is a difficult task faced by non-profit organizations and local governments in cities across the nation. Since all people require food on a daily basis and shop for it frequently, food retailers should be recognized as far more than simply another retail establishment. However, even as many municipal governments realize this, there are limited ways for cities to intervene in support for grocery stores when particular parcels of land are owned and controlled in the private realm. Market forces and consumer behavior all too often work against the success and proliferation of small grocery stores distributed equitably across the City. We currently enjoy a diversity of food choices across our city, though some are far less accessible to citizens without vehicles, or those living in neighborhoods without grocery stores. Recent closures across the city have sparked significant concern and interest among citizens and City leaders. Ensuring equitable access to food, promoting livable and walkable neighborhoods, and cultivating entrepreneurial opportunities are important long-term objectives for the City of Madison to consider in the context of preserving and supporting grocery stores across the city. For the benefit of the Madison Neighborhood Grocery Store Advisory Group convened by the Mayor in Summer 2003, this report has been prepared to provide a starting point from which the City of Madison can work to preserve and encourage grocery stores as important components of healthy neighborhoods across the city. After reviewing past city interventions with grocery stores and providing updates on recently closed sites, the general goals and policy framework suggested in this report are as follows:

General Goals

1) Retain a diversity of food buying options and preserve maximum access to nutritious, affordable, and culturally appropriate food choices for all Madison residents.

2) Encourage the development of small and medium sized grocery stores in developing and re-developing neighborhoods to provide food-purchasing options within proximity to residents in neighborhoods across the City of Madison.

3) Encourage food related entrepreneurial & employment opportunities that support one or both of the above goals.

4) Support Madison-owned grocery stores to the extent possible.

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High-Priority Policies
1) Redevelopment Strategy: Where severe need for a grocery store is shown outside of existing redevelopment districts, assessments of blight in the area may be undertaken to determine whether or not the creation of a Redevelopment District is an appropriate way to initiate City involvement. 2) Financial Assistance: As food retailers operate on an extremely tight margin, the City should pursue ways to support food retail within the Capital Revolving Loan Program, Tax Increment Financing, and other grants and loans. 3) Food Distribution: As small and independent grocers often face difficulties accessing economical food distribution networks, the City should examine ways to support food distribution networks that prioritize area food producers and local food retailers simultaneously.

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Policy Framework
(Please see pp. 27-30 for more detailed discussion about the following suggestions)

Comprehensive Plan Process Where possible, specific language should be included in the Comprehensive Plan to identify grocery stores as important considerations for developing and redeveloping neighborhoods.

Land Use Regulation During the review and negotiation process for Planned Unit Developments and mixed-use development proposals within commercial zones, possibilities for including food retail should be considered and analyzed (see page 4 for examples). When possible, planning staff and property owners should initiate Shared Parking negotiations between potential grocers and nearby businesses in order to minimize the need for new surface parking.

Financial Assistance While essentially operating in the same way, CDBG and the Capital Revolving Loan Program could set-aside a percentage of their funds each year for food retail businesses, to ensure that among all small businesses, applicants from food retail businesses providing entrepreneurial and employment opportunities are identified and supported in Madison neighborhoods. Within the Capital Revolving Loan Program, funds could be dedicated for equipment upgrades and facade improvements for existing grocery stores. When proposed TIF districts are reviewed, considerations should be made regarding grocery store access and the need in and surrounding the proposed district. Within existing TIF districts, where a grocery store would be appropriate, recruitment of and financial assistance for grocery stores should be a priority. Within existing TIF districts, where a grocery store (alone or within a mixed-use development) would be appropriate, but lack of adequate parking prevents a major barrier, the financial feasibility of providing support for parking infrastructure with Tax Increment should be assessed. Through Neighborhood Planning Grant programs, neighborhood associations should be able to gain financial support for administering market surveys to aide in recruitment of grocery stores appropriate to serve neighborhood needs. Further, City staff could perform outreach to encourage neighborhood groups to apply for grants for this purpose.

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Real Estate Strategy Within existing Redevelopment Districts, City staff may assess the need for neighborhood grocery stores and the suitability of blighted parcels. If both inadequate food retail access and suitable sites are discovered, discussions could be initiated with landowners and developers to determine the feasibility of locating a grocer in the district. Depending on the level of need for a grocery, and the suitability of parcels, municipal bonds and or condemnation should be considered as methods by which the City can support improvements on the blighted sites to attract grocery stores. Where severe need for a grocery store is shown outside of existing redevelopment districts, assessments of blight in the area may be undertaken to determine whether or not the creation of a Redevelopment District is an appropriate way to initiate City involvement.

Market Analysis The Department of Planning and Development should assess the need for upgrades of market analysis software to more efficiently and accurately capture neighborhood food needs. As market analyses for food retail are completed, procedures and findings can be shared and utilized as educational tools for citizens

Other Options and Related Opportunities Pursue funding for the creation of a Food Policy Council, possibly as a partnership with Dane County Support a focused campaign to inform citizens of existing Metro transit options to and from grocery stores Evaluate the transportation needs of senior citizens in Madison, and expand public transportation options to grocery stores or support food delivery programs accordingly Evaluate transportation needs in areas with a high concentration of residents without vehicles, and provide more frequent and/or more direct public transportation routes to and from grocery stores Explore opportunities to work with and subsidize taxi companies to provide free or reduced rates to full-service grocery stores for those that meet a particular set of criteria, such as participants in the Women, Infants, and Children (WIC) program or food stamp recipients The Citys Energy Task Force, MG&E, and the Neighborhood Grocery Store Advisory Group could initiate a joint research effort to document current energy use in Madisons grocery stores, compile information on state and federal support programs supporting energy efficiency, and distribute this information to business owners Provide support for the Centralized Agriculture and Food Facility (CAFF) project as a means to support area farmers and scale up the distribution of fresh and local foods to grocery stores of all sizes, foodservice institutions, and restaurants

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Introduction
Guiding the decisions of food retailers- and providing support for them- in order to ensure equitable access to food and promote livable, walkable neighborhoods is a difficult task faced by non-profit organizations and local governments in cities across the nation. Tight profit margins in the food retail industry make it difficult for businesses to survive without efficient distribution networks and large stores, which are often seen as challenging to locate in established urban neighborhoods. This leads to several trends, included but not limited to the following: Large, full-service supermarkets have tended to move to the urban periphery, where less expensive parcels of land become big box retail spaces and surface parking lots. The average supermarket size is 54,000 square feet (Pothukuchi, 2004). Small neighborhood grocery stores with high quality or specialty foods often struggle, but tend to persist in middle to high-income areas where consumer dollars provide sufficient revenue to pay the high rent. In low-income urban neighborhoods, there are few full-service grocery stores, and convenience stores offering foods of lower quality and less nutritional value (often at higher prices) are frequently the most viable options for those without access to a vehicle. Since all people require food on a daily basis and shop for it frequently, food retailers should be recognized as far more than simply another retail establishment. However, even as many municipal governments realize this, there are limited ways for cities to intervene in support for grocery stores when particular parcels of land are owned and controlled in the private realm. Market forces and consumer behavior all too often work against the success and proliferation of small grocery stores distributed equitably across the City. Though Madison is not a city plagued by vast food deserts (large areas of primarily low-income residents without access to grocery stores), recent closures across the city have sparked significant concern and interest among citizens and City leaders. Ensuring equitable access to food, promoting livable and walkable neighborhoods, and cultivating entrepreneurial opportunities are important long-term objectives for the City of Madison to consider in the context of preserving and supporting grocery stores across the city. How might the City of Madison take a proactive, policy-oriented approach to maintain and encourage grocery stores in city neighborhoods? For the benefit of the Madison Neighborhood Grocery Store Advisory Group convened by the Mayor in Summer 2003, this report has been prepared to provide a starting point from which the City of Madison can work to preserve and encourage grocery stores as important components of healthy neighborhoods across the city.

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Food Retail as a Public Issue

Is food retail an issue that should be included in the public agenda? Doesnt the free market dictate the most efficient number and ideal locations of food retailers across U.S. cities? Why should a city pay specific attention to grocery stores, and what policy tools might be used to support small neighborhood food retailers in the face of widespread trends of corporate consolidation, super-sized stores, and onestop shopping? In cities across the U.S., there are a variety of ways to frame food retail as an issue in the public domain. Following are three ways in which food retail might be framed and addressed in the City of Madison, WI: access to food choices, livable and walkable neighborhoods, and support for entrepreneurship. It is important to note that while they are integrally related, pursuit of each of these goals might require a unique combination of strategies. Access to Food Choices First, and perhaps most importantly, the importance of access to healthy affordable food for all citizens in Madison must be considered (see Bolen and Hecht, 2003.) Regardless of age, income level, or location, every person needs to purchase or otherwise obtain food on a regular basis. With a quick trip to a grocery, (or increasingly, a giant super center), many U.S. citizens have easy, consistent access to affordable, colorfully packaged, fresh and processed food products sourced from around the world. In Madison, the majority of consumers relying on automobiles to make trips to a grocery may not consider the location of grocery stores a critical place for public concern, since a short drive can get them to a wide variety of stores in the region. However, the location of stores certainly affects the ability of those without automobiles (typically low-income and elderly citizens) to make a trip to the grocery of their choice feasible. As Madisons elderly population continues to increase, this will become more and more important. Getting to the Grocery
Importantly, the Madison Metro Public Transit Ride Guide includes routes to 20 area grocery stores among popular destinations, and has an arrangement with at least one grocer to drop-off and pickup customers right at the door. Yet if a customer is making a trip other than a small errand (for instance- to stock up on food for a large family) one can imagine the time and difficulty in planning and executing the trip, especially if young children are involved. Understandably, grocery carts are often left at bus stops and transfer stations (see photo). One grocer on Madisons East side reportedly collects grocery carts daily at the nearby East Transfer Point Bus Station, where customers relying on buses have had to wheel their goods before getting back on the bus (Sobota, 2/04).

In a process that began decades ago, many food retailers have left urban neighborhoods for larger tracts of suburban land. This occurred (and continues to occur) for two primary reasons. First- food retailers simply follow customer dollars as suburbs grow, and second- undeveloped tracts of suburban land offer the space perceived as necessary for adequate square footage and parking. With costs and revenues spread throughout multi-state regions or even internationally, it is not at all rare for corporate grocery store chains to close less profitable stores and focus operation in higher profit areas. For independent stores facing low profit margins and difficulty accessing an economical food distribution system, closure may be imminent without assistance. Many residents must rely on public transportation or taxis to take them from underserved neighborhoods to a store with an adequate choice of affordable food. If long bus trips or expensive taxi rides are too inconvenient, many rely largely on corner convenience stores, which offer a much narrower range of (and

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often less nutritious) food products at higher prices than full-service supermarkets. Recent closures of grocery stores- and the concerted efforts of neighborhood residents to do something about it- have significantly raised the importance of the issue of access to food choices in Madison. In large cities across the U.S. such as Detroit, Los Angeles, and Philadelphia, statistical patterns and maps have shown significantly fewer supermarkets in areas with a high percentage of low-income and minority residents (Shaffer, 2002; UEPI, 2002; The Food Trust, 2003). Though such obvious gaps may not be as evident in Madison, similar patterns do exist, and can be clearly seen when looking grocery store locations and car ownership. The two recently closed Kohls Food Emporiums depicted by blue squares on the map below are immediately surrounded by census blocks with large numbers of households without cars. While a very large grocery store exists between the two sites, it is unlikely that former patrons of either of the closed grocery stores can feasibly walk the extra distance to this store.

Madisons downtown center and the UW Campus are also worth noticing. The census blocks nearest them contain hundreds (even thousands) of households without cars, and yet the area completely lacks a large grocery store. If large grocers were to locate in these areas, students and downtown area residents would benefit greatly from an additional walkable option. Further, residents across the entire city that rely on bus transportation for grocery shopping or commuting to work would have a convenient option near the most frequent and consistently used transit nodes in the City- UW Campus and the Capitol Square.

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Livable and Walkable Neighborhoods As Madison continues to develop and redevelop, small and medium-sized grocery stores hold enormous potential as components of livable and walkable neighborhoods. Proximity of food retailers to residents can drastically reduce the number of vehicle trips used to fill the kitchens of Madison households. Certainly, many car-owners will still drive to grocery stores, and until major changes occur in U.S. lifestyles and landscapes, the provision of parking spaces for grocery stores is still important in order for them to remain economically viable. However, as full service grocery stores exist within walking distance of residential or mixed-use neighborhoods, frequent walking or biking trips are a far more viable option than the auto-dependent weekly stock-up. Further, the human scale associated with small and mediumsized grocers is well worth preserving. Whereas small grocery stores used to be popular community gathering spaces, typical big-box supermarkets are generally quite the opposite- largely devoid of interaction in the long bright aisles and sea of parking spaces that surround them. Over the past few decades, the market and particular zoning codes have Reducing energy use in grocery stores worked against these goals. Most food Beyond the way they affect energy use in the form of customer retailers- whether independent or vehicle trips, grocery stores themselves have a high metabolism. The use of energy for lights, appliances, air conditioning, and corporate owned, demand very large refrigeration (which alone accounts for 38% of the energy used in parking lots to accommodate grocery stores!) pose enormous costs for stores of all sizes. consumers driving to their stores from a Federal and state programs to encourage energy efficiency may help to significantly reduce long term energy costs for stores, broad region. Parking requirements are eventually leading to higher profit margins. In fact, a small family also enforced by zoning codes that set owned grocery store in Sacramento has saved an estimated $22,000 after installing new lighting, refrigeration, and air a minimum number of stalls per square conditioning equipment with assistance from the local utility district foot of retail space. Thus, it is often (Energy Star, 2003). difficult from a business perspective to Within its information for small businesses, the EPAs Energy Star work with small tracts of urban land and Program has dedicated a category for grocery & convenience make the neighborhood grocery store stores, which can be accessed on-line at: work. Further, even if parking was not http://www.energystar.gov/index.cfm?c=grocery.sb_grocery a significant issue and large grocery Recognizing the unique fiscal challenges and energy needs of stores did exist within primarily food retailers, Wisconsins Focus on Energy Program has also residential neighborhoods, early developed a special effort focused on supporting grocery stores including technical and financial assistance for monitoring energy morning noise from delivery trucks use and the installation of new equipment. Extensive information might pose significant problems. For on the program can be found on-line at: this reason and others, commercial and http://www.focusonenergy.com/page.jsp?pageId=1183 industrial land uses have historically been separated from residential areas by zoning codes. However, trends are changing as citizens, planners, and municipal leaders across the nation recognize the benefits of livable, walkable neighborhoods that include a variety of residential, employment, and retail amenities existing at a human scale. In dense, mixed-use neighborhoods, residents have increased transportation options that reduce the need for vehicles. In mixed-use developments that include grocery stores along with residential and/or office spaces, investments in below or above ground parking may be far more economically viable (see next page). Smaller full service food retailers can survive in these neighborhoods, and well-designed receiving docks can minimize noise from food delivery trucks. Developers, entrepreneurs, and grocery store chains are recognizing the true potential of dense, mixed use neighborhoods in areas underserved by grocery stores. How might the City of Madison encourage this trend?

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Livable Neighborhoods: Grocery Stores Within Mixed-Use Developments To fit into redeveloping urban neighborhoods without needing swaths of surface parking, many food retailers are finding success by locating in mixed-use developments in city centers or other areas surrounded by medium-to-high density residential use. Public-private partnerships to encourage grocery stores within attractive mixed-use developments might be an important strategy to consider both downtown and in Madisons neighborhoods. Following are four examples of such stores in the Pacific Northwest ranging in size from 15,000 to 50,000 square feet. Portland, Oregon Wtih approximately 20,000 square feet of retail space, Zupans Market anchors the retail portion of the mixed-use and mixed-income retail/residential Belmont Dairy Project on Portland, Oregons East Side (shown at right). The project has been recognized nationally for its excellence as a model of urban infill and mixed-use development.

In the rapidly densifying inner NW area of Portland, a 50,000 square foot Whole Foods Market utilizes two floors below office spaces within a mixed-use redevelopment project. The City of Portland helped to finance underground parking for the project. Subsequently, a Safeway Foods has opened within a similar project downtown, which includes both rental and owneroccupied housing. Importantly, each of these stores is accessible by car, bus, rail, bike, or foot. Seattle, Washington Puget Consumers Co-op, a regional natural food co-operative with 7 stores, recently became the anchor retail tenant in a mixed-use commercial/ residential development in Seattles Fremont neighborhood. Underground parking is available onsite, and 4 bus routes provide access to the store.

At 16th Avenue and East Madison Street, this mixed-use development- smaller than those mentioned before- may be a more appropriate prototype for some of Madisons neighborhoods beyond downtown. Madison Crossing (shown at left) includes 24 residential units, a 15,000 square foot grocery, and a second level shared parking garage.

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Food-related Entrepreneurial Opportunities By encouraging entrepreneurial efforts related to food retail and food distribution, the City of Madison can indirectly support the first two goals. Almost by nature, entrepreneurial businesses begin on a small scale and are thus able to fit in seamlessly within existing neighborhoods and provide diverse food purchasing options for residents across the city. Small and medium-sized stores provide important opportunities for entry-level workers and entrepreneurial small business owners within their own neighborhoods. They can provide important entry-level or management-level job opportunities accessible by people of a wide variety of ages and backgrounds. Madisons growing cultural diversity demands increased access to appropriate and familiar foods. Small entrepreneurial grocers may be better able to serve the specific food needs of their neighbors, and respond quickly to changing demands. Finally, grocery stores typically serve as important community spaces and anchor businesses to help to catalyze further economic development in neighborhoods. (This trend is certainly recognized and replicated beyond urban neighborhoods, as strips of small businesses line up alongside grocery stores in suburban strip malls across the country.) A local neighborhood example of this tendency was shown when the Regent St. Co-op briefly closed its doors in 1998. According to a member of the Co-ops Board, businesses adjacent to the grocery suffered significantly during those months, and were quite supportive of the reopening of the Co-op. Madisons Locally Owned Food Retailers * To be completed with input from Neighborhood Grocery Store Advisory Group*

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Overview of food retail industry trends

Trends in Consumer Purchasing Habits Consumer habits simultaneously depend on and dictate decisions by food retailers. First- people in the U.S. expect cheap food. Supported by tremendous federal subsidies for oil, water, and large-scale agricultural production, U.S. citizens pay far less for food compared to income levels than consumers elsewhere. Without even realizing it, many of us pay only a small portion of the true cost to produce, process, package, store, transport, and refrigerate the vast majority of foods. Further, most consumers in the U.S. are accustomed to the option of convenient one-stop shopping at supermarkets for a weekly stock-up. According to a 2002 survey, shoppers spend an average of 47 minutes per trip inside the grocery store, where most have access to a wide variety of food and non-food household items. However, evidence suggests that consumers will take more time to seek out value (which could mean lower prices or higher quality), and 60% make fill-in trips for less than 10 items on a weekly basis (Supermarket Guru, 2002). Instead of relying solely on a particular supermarket, the average shopper shops at 2.2 stores each week for food (Supermarket Guru, 2002). Thus, typical supermarkets are seeing increased competition from warehouse stores, natural food stores, and others. Food Retailing Trends: Consolidation & Standardization Operating with razor-thin profit margins, food retailing has quickly become more and more consolidated over the past few decades. A handful of corporations now operate the vast majority of the food retail market, and stores are super-sized at a national average of 54,000 square feet (Pothukuchi, 2004). In order to survive as a business, food retailers feel the pressure to get big, stocking their shelves with a wide variety of foods and a combination of other products to fulfill consumer food needs in one trip. It should come as no surprise that the largest food retailer in the U.S. is WalMart, which only began its food retail super-centers in the mid-1990s. Though not yet present in the Madison area, the presence of Wal-Mart Supercenters puts extreme pressure on food retailers of all sizes to either find niche markets or reduce labor costs and prices in order to remain in business. Madison area food retail history
Data obtained for Dane County shows that between 1977 and 2001, the number of establishments defined as food retailers (including supermarkets, small grocers, specialty food stores, and convenience stores) actually decreased from 228 to 209. The graph below shows this trend in relation to the County population.

Food Retail Establishments per 10,000 Residents, Dane County, 1977-2001

# Est. per 10,000 Residents 8 7 6 5 4 3 2 1 0
1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001

Source: US Economic Census County Business Patterns

A closer look at the data shows that area food retailers have become larger over time. In 1977, only 9 food retail establishments in the county employed over 50 people, while in 2001, 30 such establishments existed. This is certainly in line with nationwide trends of consolidation in the food retail sector, though it tells us very little about where stores are located with respect to city residents.

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To increase shopping convenience, food retailers have diversified their product lines to include more nonfood items, yet at the same time, more and more food items are appearing on shelves at pharmacies and department stores, increasing competition, increasing competition to an even greater extent. Analogous to the trend in consolidation, food retailers have standardized store layouts, equipment, shelf patterns, and product offerings to make the distribution and stocking of products more efficient. Thus, food retailers often insist on a very specific store size and parking lot size in order to locate in a given area. This presents significant problems for developed urban neighborhoods, where large lot sizes may not be available, and truckloads of food may not be perceived as appropriate within the existing neighborhood framework. Food Distribution Closely tied to the food retail industry is the entire food distribution system on which retailers depend to ensure a consistent flow of products to keep shelves full. Not only is it important to consider the neighborhood effects of food distribution (early morning trucks, receiving docks, etc.), but also the implications of food distribution systems on the success of stores themselves. The scale of food distribution networks is a critical part of the decision-making process regarding size, location, and pricing for food retail businesses. As depicted in the photo at right, food retail chains with sufficient capital, such as Whole Foods, often own and control their own regional shipping and distribution systems to cut down on profit loss, and consequently may have less flexibility in the location and size of stores that fit within their established distribution system. Woodmans has a similar advantage in that they incorporate warehouses into their stores for increased storage space. On the other hand, small, independently-operated stores dealing with lower volumes of product experience difficulty tapping into the mainstream food distribution system, and often must purchase and sell things at higher rates than corporate chains. Thus, the issue of access to grocery stores by people is paralleled at the next level, when independently-owned stores cannot access food distribution systems. Central Agriculture and Food Facility (CAFF): missing piece of the local food puzzle?
In a city where locally produced food is visible in vibrant farmers markets, as well as a growing number of restaurants and grocery stores, the vast majority of institutional food service establishments still serve fresh produce and other foods originating on farms across the country or beyond the U.S. Has the time come to make fresh, nutritious, and locally produced foods more widely available? Envisioned by area farmers, University groups, and non-profit organizations initiatives, the feasibility for a CAFF is currently being studied. Ideas for the bricks and mortar facility include storage space for locally produced foods, a commercial kitchen, capacity for small-scale food processing, permanent space for an indoor winter farmers market, and office space for area non-profit organizations. Ideally, such a facility could greatly increase market opportunities for existing and new local farmers while providing a smaller scale food distribution network to cater to area grocery stores, restaurants, and institutions such as public schools, hospitals, government buildings, and the University. It could catalyze an increased flow of nutritious foods to Madison eaters while increasing the profitability and diversity of area farms. Importantly, it could provide a new food distribution mechanism for area grocery stores, and meaningful employment opportunities related to product development, marketing, and distribution. Though in very early stages, the project has gained significant attention from City staff and others who recognize it as a missing piece of the local food puzzle. (For more insight on food retailing and local foods, see Guptill & Wilkins, 2002.) Artwork by Mark Harmon

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Efforts by Other Cities to Attract Grocery Stores

Large Cities Larger cities across the U.S. have experienced gaps in food retailing that especially affect low income and inner city neighborhoods. Coordinated responses from local community development corporations, organized citizens, entrepreneurs, and in some cases, city governments have made positive changes in many cities, but the strong tides of the food retail industry are hard to turn. Examples of city government actions to attract and preserve food retailers in underserved areas are as follows: Dallas, TX and Rochester, NY After little success encouraging leading area food retailers to add new stores, these city governments compiled incentives to encourage outside chains to locate not one, but a package of five stores within each city. Incentives included proposed sites, tax abatements, and a reduction of permitting fees (Ferguson and Abell, 1998). Baltimore, MD A partnership between the Baltimore Dept. of Housing & Community Development, the Baltimore Development Corporation, the State of Maryland, and Save-A-Lot Foods brought a Save-A-Lot store to West Baltimore to fulfill a need for a supermarket and jobs for residents. A press release in June 2001 stated that 6 more locations in Baltimore were on the drawing board (Brown, 2001). Los Angeles In Los Angeles County, the gap in grocery store accessibility between lowincome and other communities has persisted over time. A 2002 study comparing the number of supermarkets in various zip codes found that in areas where only 10-20% of the households earn less than the $35,000/yr, there are over 3 times as many supermarkets as in those where 60-70% of the households earn less than $35,000/yr. The city has not yet taken a proactive stance towards grocery stores, but recommendations within a report prepared by the Urban and Environmental Policy Institute call for the following: a City-wide ordinance on supermarket access in low-income communities, city assistance with land identification, environmental remediation, market feasibility studies, tax breaks, and other incentives to encourage grocery stores (Shaffer, 2002).

Peer Cities Review of on-line documents and/or telephone calls to planning and community development departments in a handful of Madisons peer cities1 revealed that while grocery stores have been recognized as unique and valuable pieces of the neighborhood fabric, proactive policy measures to specifically encourage neighborhood grocery stores are rare. Of course, the way issues are framed and addressed across cities varies tremendously. The following examples provide only a glimpse at how peer cities have been involved in similar efforts. Further research may be necessary to find models relevant to Madison, and yet even if such examples are difficult to find, Madison could certainly become a leader in taking proactive policy measures to support a diversity of food purchasing options. Lansing, MI A Project Coordinator with the Lansing, Michigan Economic Development Corporation reported that the city tried to encourage neighborhood grocery stores in 1998 by paying for an economic analysis, but nothing resulted from it. Currently, access to a variety of grocery stores in Lansing is sufficient, as most residents have automobiles or access to public transportation lines.

i.e. Lincoln, NE; Lansing, MI; Portland, OR; Sacramento, CA; Des Moines, IA; Austin, TX; St. Paul, MN

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St. Paul, MN In St. Paul, Minnesota, planners are involved in site-by site negotiations and plans involving groceries, yet no formal plans, policies, or incentives are in place with regard to food retail in the city. Perceived needs for parking have presented significant difficulties. For instance, in order to locate a 60,000 square foot store in the city, Cub Foods required 5 acres of parking and was unwilling to negotiate shared parking arrangements- nearly an impossible request in a built-out city such as St. Paul. The city is currently involved in a unique project to redevelop a contaminated industrial site, and plans include a medium-sized Super Saver store with adequate- not excess- space for parking. Finally, entrepreneurial Asian-owned food stores (10,000-15,000 square feet) have boomed recently, and play an important role in the St. Paul food retail landscape. In a unique East side store, the current owner took over when a national chain went out of business, and currently stocks culturally appropriate foods for ethnically diverse area residents, including those of Asian, Hispanic, and Irish descent. Portland, OR The City of Portland is one exception to the otherwise reactive stance most city governments take with regard to grocery stores and other food-related issues. With staffing resources from the City of Portlands Office of Sustainable Development, Multnomah Countys Dept. of Health and Dept. of Business & Community Services, a Food Policy Council created in the Spring of 2002 began to take a comprehensive look at food issues as they relate to hunger, diet-related illness, and supporting local agriculture. In its October 2003 report, one of 6 major goals expressed was to develop community-based solutions for areas with inadequate food access, (whether the need be for a full service grocery store, a community garden, or a farmers market). When possible, the policies suggested by the Food Policy Council make linkages between regional agricultural production and ensuring access to food for area residents (City of Portland Office of Sustainable Development, 2003). Austin, TX With a focus on getting people to grocery stores as an interim solution to a lack of grocery stores in low-income neighborhoods, the Austin Food Policy Council, no longer in existence, worked with the Austin Transit Authority to create more frequent circulation routes between public housing developments, low-income neighborhoods, and supermarkets.

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The Diversity of Existing Food Retailers in Madison

Despite the prevailing currents of corporate consolidation, large-scale food distribution, and consumer desires for convenient one-stop shopping, a substantial diversity of food retail businesses remains successful in Madison. It is important to appreciate the various sizes, ownership structures, and specialties among grocers that can and will continue to thrive in Madison, serving different consumer needs and providing access to a variety of food and employment opportunities throughout the city. Each must work within the prevailing global trends and maintain a dedicated customer base to exist. Following are five examples chosen simply to illustrate this diversity. Large Supermarkets: Woodmans Food Stores, 3817 Milwaukee St. & 725 S. Gammon Rd. With large stores on Madisons East and West sides, Janesville, WI-based Woodmans is an employee-owned cooperative with nearly 410,000 square feet of combined space between the two stores. With its own on-site warehouses, Woodmans has the capacity to purchase extremely large quantities of food and other products from a variety of distributors and offer customers a variety of affordable products. Located on the east and west sides on very large parcels of land (total lot sizes are 13.6 and 17.2 acres, respectively), Woodmans is a regional store and does not consider neighborhood grocery stores as competition. Rather, Woodmans caters to customers across and beyond Dane County who stock up on products for the week, or even the month. Aside from offering a wide variety of affordable foods, Woodmans is an important employer in Madison. Its 500600 employees, 35% of whom are minorities, earn $14/hr on average. All employees begin earning $8.75-$9.00/hr plus health insurance, with significant opportunities for advancement within the company and access to stock options after three years. Copps Food Stores One of the major food retail chains with stores in Madison, Copps Food Stores currently have four locations in Madison with 267 full-time and 341 part-time employees. Copps offers a wide array of food choices in their mediumto-large stores. Three of the sites have between 50,000 and 70,000 square feet of retail space, while the fourth is smaller at just over 25,000 square feet (see right). Roundys Corporation, which owns and operates Copps, recently purchased three Kohls Food Emporiums in Madison as they went out of business. The corporation then closed the sites on East Washington Avenue and North Sherman Avenue (see pp. 22-24.)

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Small Groceries: Jenifer Street Market, 2038 Jenifer St. In a near-East side neighborhood, the independentlyowned Jenifer Street Market comprises just under 10,000 square feet of retail space on a half-acre parcel of land owned by the adjacent Schoeps Ice Creamery. As one of Madisons key supermarkets over fifty years ago, it has been owned and operated by Steve McKenzie since 1979. Despite its small size, Jenifer Street Market offers a wide variety of both organic and conventional products, including fresh produce, prepared foods, high quality meats, alcoholic beverages, and household products. With a customer base dedicated to fulfilling their weekly (even daily) shopping needs at the Market, costs for rent, building maintenance, and staffing needs are covered. McKenzie feels that people support the business for several reasons; it is close to home, they do not like Big Box retailers, and they identify the store as theirs. Support for the market is working, even against major trends in food retailing. In fact, Jenifer St. Market is the only full service grocery store in Madison not located on a high-traffic street.

Regent Street Food Cooperative: 2136 Regent St. A prime example of a very small neighborhood grocery store, the Regent Market Co-op has been a neighborhood grocery store since 1924, with the exception of a few months in 1998. The tiny store provides an impressive array of food choices- organic and conventional foods, as well as in-house custom butchering- to residents on the near West side of Madison. With only approximately 1,400 square feet of space, the store had approximately $1.2 M in sales in 2003. With a mission to serve neighborhood needs, the Co-op also provides food delivery service to neighborhood residents that are unable to walk to the store. With 20 employees (5 full-time), the Co-op provides great employment opportunities for area teens and others, though the Board wishes it could provide a stronger compensation package. Even with a relatively low rent, the small store struggles financially due to competition from larger supermarkets and difficulty accessing food distribution networks. However, with involvement and oversight from its board of directors, as well as 1000 member-owners and volunteers, the Co-op has remained a vital tenant in this near West neighborhood. As long as neighbors who value the ability to purchase foods nearby commit to keeping the store viable, it will surely continue. According to a Co-op Board Member, Regent St. is very thankful for the supportive relationships it has cultivated with other food cooperatives in Madison, as well as recent loans from MG&E and individual members to replace old equipment with energy efficient appliances. Since it operates with such tight profit margin, the Regent St. Co-op could use financial assistance for capital investments such as facade improvement and building purchase, should the current owner ever decide to sell the property.

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Ethnic Food Stores: Yue Wah Oriental Foods, 2328 S. Park St. Madison is the home of a wide variety of ethnic specialty food stores featuring, Italian, Mexican, and Asian foods. With an impressive array of Asian and Hispanic foods, Yue Wah Oriental Foods in the Villager Mall on South Park Street includes a produce counter, seafood, and nearly every spice, paste, and grain imaginable within its 6,000 square ft. space. Its location in Villager Mall is advantageous to area shoppers, as it is adjacent to many other neighborhood amenities such as Harrambee health and family center, a Madison public library, and a few other small retail stores.

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Other Food Purchasing Opportunities Of course, Madison residents have many other opportunities to purchase food besides those described above which were included simply to illustrate the diversity of existing retailers. Each retailer has a unique ownership and employment structure, and faces particular market circumstances due to its location, size, product offerings, and customer base.

Among the variety of remaining stores (some depicted in photos at right) are Whole Foods Market on the near West side, two other member owned food cooperatives, a wide variety of ethnic and specialty food stores, and a plethora of gas stations and pharmacies doubling as convenience/food stores.

In addition, the very successful farmers markets in Madison provide ample opportunity for city residents to purchase foods at affordable prices directly from area producers. With locations on the Capitol Square, near East side, near West side, and South side, Madisons weekly farmers markets offer an array of locally produced nutritious foods while in season.

The bottom line is that a diversity of food retailers is successfully co-existing in Madison. Ideally, this diversity will be maintained and enhanced so that residents of all income levels in neighborhoods across the City will have maximum opportunities to choose among various transportation options and ultimately have access to nutritious, affordable, and culturally appropriate food choices.

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Historical city intervention with food retail Though public intervention in the private food retail sector may not be recognized, subsequent examples demonstrate the public assistance provided to food retailers in the past. Considering this history, opportunities for the City to reaffirm its commitment to grocery stores may become more evident. Land Acquisition: Capitol Centre Foods, 111 N. Broom St. As the largest full-service grocery store in Madisons downtown, Capitol City Foods is easily accessible to UWstudents, downtown residents, and especially the elderly residents living in the adjacent subsidized housing development. Before the store existed, the site was part of a 7.3 acre publicly owned site slated by the city for mixed-use development including housing for the elderly, market rate housing, commercial property, a parking facility, and the Madison Senior Center. In 1981, the City transferred 2.65 acres of the property to the CDA and on to a private developer, Capitol Centre Housing Partners, who agreed to include 150 market rate residential units, 200 elderly housing units, and the 25,000 sq. ft commercial space for the supermarket in a $20.7 M development. In July 1981, a $2.5M federal grant was obtained by the City and awarded to Capitol Centre Housing Partners as a 42-year loan to assist with project expenses. Land Acquisition: Asian Midway Foods, 301 S. Park St. As one of several ethnic specialty stores in Madison, the 7,000 square ft. Asian Midway Foods is part of a larger mixed use project in the Triangle area, including townhouse apartments, high-rise apartments, and the store space. All were constructed in the late 1970s when urban redevelopment swept the country and drastically changed the Triangle area. One important component of the Triangle area plan was the requirement that a grocery store remain in the neighborhood. The first grocer to lease the space from the City of Madisons Community Development Authority (CDA) stocked the store with a traditional line of products, similar to other groceries, and left in the early 1980s due to lack of success. Asian Midway owners Mr. & Mrs. Peter Chow agreed to lease the space from the City of Madison in 1983, and it then became Asian Midway Foods, which stocks a portion of traditional grocery items on top of Asian specialty foods. The CDA still owns the land, and is able to continue to provide an affordable lease to the owners. The store serves not only neighborhood clientele, but also provides a large Asian specialty store to serve the Madison region.

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Loan for Expansion: Willy Street Co-op. 1221 Williamson St. In May of 1998, the Willy St. Co-op received a $200,000 loan from Madison Development Corporation (MDC), which is capitalized by the City of Madisons Community Development Block Grant Program. The loan, which was paid back by 2002, assisted in relocating the business to its current location, the fourth location the co-op has occupied along Williamson St. This allowed for significant expansion to its current size of 20,000 square feet (9,500 square feet of retail space)2 With over 10,000 member-owners and over 115 employees in 2004, the Willy Street Co-op is not only one of the most successful food cooperatives in the U.S., but acts as an important anchor amidst other small businesses in the east-side neighborhood. The co-op donates a portion of its profits to the community, and offers a living wage and healthcare benefits to employees. Further, Co-op staff members have provided significant time and technical assistance to other area food cooperatives. Finally, the co-op supports the area agricultural economy by featuring products from small local farmers when possible and providing organizational oversight for a weekly farmers market on the near East side of Madison.

http://www.willystreet.coop/About/history.html

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Updates on Recently Closed Sites Kohls Food Emporium: 2525 East Washington Avenue The vacant Kohls site at 2525 East Washington Ave., now owned by developer McGrath Associates of Madison, is destined for replacement by a new full service grocery store within the next few years. McGrath Associates purchased the Kohls site along with the large adjacent Rayovac site and others, and are one year into the planning process for the 12 acre Union Corners Redevelopment Project. Forecasted for construction from 2005-2008, the mixed-use redevelopment may include as many as 300-400 residential units and approximately 100,000 square feet of commercial space. The existing 23,700 sq. ft. Kohls building will be removed, and much of the surface parking on and around the site will be replaced with mixed income housing and mixed-use development. Residents strong desire and need for a grocery store has been heard from the beginning of a series of neighborhood meetings held to discuss the project (City of Madison Dept. of Planning and Development, 2004). Todd McGrath claims that the need for a grocery is one issue that has reached consensus among residents. McGrath anticipates no difficulties in recruiting a grocer, and has already been contacted by a handful of businesses (including the Willy St. Coop) interested in locating a new store within the site. The exact size and particular type of store remain undecided, though the store will likely have between 10,000 and 25,000 feet of retail space. Ideally, McGrath would like to see a store no smaller than 15,000 square feet to serve as the retail anchor for the site, yet with a small enough footprint to allow for ambitious mixed-use design on the property as a whole. Citizen input on the store has varied. Some strongly support the idea of a grocery cooperative, while others feel it may not be the right match. He envisions that the grocery would be supported primarily by the residents in the new residential development and adjacent neighborhoods, but also by those driving along East Washington Avenue to and from downtown. One advantage in the recruitment of a grocer for Union Corners is that the highdensity, pedestrian-friendly nature of the proposed development will likely reduce the need for surface parking. That said, McGrath plans to cover much of the surface parking within the development with a green roof, which will greatly reduce the storm water run-off typically associated with parking lots. McGrath Associates is currently working with City of Madison planners and traffic engineers, and others to determine vehicular access to the site, while also encouraging the City to create a Redevelopment District and Tax Incremental Financing (TIF) District to facilitate project implementation. All indications are that the district will gain City staff approval as a TIF district, but as of spring 2004, this remains unknown.

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Kohls Food Emporium, Sherman Plaza: 2921 N. Sherman Ave. Approximately one year after the closure of Kohl's Food Emporium in Sherman Plaza left a food retail gap in Madison's diverse north side neighborhoods, residents coming together in support of a new grocery store do not face a positive market situation with regard to recruiting a new occupant. In order to renovate Sherman Plaza in 2000, its owners signed a 20-year lease with Kohls (which is now owned by Roundys) with what has proved to be a very high rent. The high occupancy cost helped the owner secure a large loan to renovate the shopping center, but has proved to be a major hurdle in attracting another grocery store for the site. Though Roundy's Inc. CEO Robert Mariano has verbally expressed his support for allowing another grocer to take over the remainder of the lease, this would require the site's owners to refinance the mortgage for the site. For now, as residents food needs are underserved, the 44,000 square foot space with a newly renovated facade stands vacant and surrounded by underutilized surface parking. However, high occupancy in the remaining space at Sherman Plaza attracts good business, as this shopping center remains the downtown of the Northside Pressure from residents, city staff, and the Mayor has not yet produced a solution to this complicated problem, and citizens are taking the matter into their own hands. With technical assistance from the Northside Planning Council (NPC), the Williamson St. Grocery Co-op, and Northside residents rally to bring back a community grocery many volunteer hours, area residents have formed the store on July 29, 2003. NPC member Susan Hill talks with Northside Community Co-op in order to create a Madison Mayor Dave Cieslewicz about his just-concluded meeting with Roundy's Inc. CEO Robert Mariano. member-owned grocery cooperative to fulfill Photo by Abha Thakkar/ Northside News neighborhood food needs. At a March 21st, 2004 meeting attended by approximately 100 people, the seven-member steering committee garnered support from 57 citizens intending to buy a full $200 share and/or loan money for a total pledge of $24,000. A crucial point made at the meeting was that in the case of a member-owned cooperative, a store cannot simply close or move away at the whim of market forces, in contrast to the way Roundys decisions and the situation with the vacant site have affected the neighborhood. When governed by member-owners, a store can be stocked with a wide variety of products to serve area food needs, and remain in business as long as residents continue to support it. The cooperative is not tied to a particular location at this time, but once feasibility for the store is determined, a site of at least 10,000 square feet will likely be sought. A plea for support (memberships, loans and volunteer hours) has been made in the April/May issue of the Northside News, resulting in more pledges. In addition, a partnership of interested groups has applied for a $95,000 USDA grant to

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help the Northside Community Co-op conduct a feasibility study and market analysis, create a business plan, locate a site and needed capital and retain operations management. NPC members and volunteers are undertaking a "food basket study" to determine current food access opportunities and purchasing power on the north side at a finer level of detail than can be obtained by publicly available data 3. Subsequently, they hope to undertake a door-to-door survey to determine actual shopping patterns and food demands of area residents to deepen the market analysis. While supporting the effort of those involved in the Northside Community Co-op, the Northside Planning Council continues its effort to attract a food retailer or a mix of food retailers to move in to the vacant space at Sherman Plaza and fulfill the more general neighborhood demand for access to a full-service grocery store. Other innovative ideas for the space include a seasonal, outdoor farmers market and a foodbuying club.

For information on the shortcomings of market studies in underserved areas, see Pawasarat and Quinn, 2001, and Stewart and Morris, 2002).

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Ken Kopps: 1864 Monroe St. In one of Madisons near West, well-off neighborhoods, this former grocery store site has been vacant since Ken Kopps food store closed in 2001. Sold to Ft. Atkinson- based High Pointe Properties for $1.5 M in 2001, the 0.7-acre site in the midst of a high end retail and residential neighborhood is ripe for redevelopment. The Monroe Street Grocery Cooperative, which has 500 paid members and 200 pledged members, has expressed interest in leasing the space for a grocery store for over 3 years. Recently named as a Redevelopment District by the City of Madison, expectations are that something will soon occur at the site. Though the site and neighborhood context are quite different than those at East Washington Avenue and Sherman Plaza, one condition is similar. Input from citizens and City leaders is important, but can have only limited influence over the timing and decisions involving a privately held parcel of land. Since few or no other appropriate sites exist in the neighborhood, the Monroe Street Grocery Cooperative (MSGC) is continuing its efforts to design an economically feasible grocery store with this particular site in mind, though their discussions with the property owner have not indicated that plans for the site include a co-op. Aside from their primary goal of obtaining a site for the Cooperative, two leaders of the MSGC effort expressed support for another independently owned grocery store moving in to do business in the neighborhood. The bottom line is that area citizens want a small to medium-sized grocery store (approximately 10,000 square ft.) to serve their needs, and they want one that will stay for the long term. From the perspective of any food retail business, the location of the site is attractive, but it may be perceived to lack ample parking, and the building itself requires significant improvement. With the high cost of the site and the thin profit margins characteristic of food retailers, it seems as though the best chance for a grocer to succeed on the site may be as a part of a mixed-use development with either underground or rooftop parking provided. The costs of providing this kind of infrastructure are substantial, but the right public/private financing partnership could prove effective to ensure that a grocery store returns to the Monroe Street Neighborhood. Recent Developments In the first quarter of 2004, a new partnership entered into an agreement with High Pointe Properties to purchase the site from them. The Madison-based partnership has held discussions with a wide variety of food retailers, including the MSGC, to evaluate the feasibility of a grocery store returning to the site. They have also briefed area Alders about their concept plans for the site. Preliminary discussions between the City and the partnership have focused on the grocery store prospects, off-street parking, and the development of housing as part of the project. While no formal plans have been submitted to the City, the partnership is working to set up meetings with the neighbors and businesses in the area to discuss their plans and to respond to questions or concerns that they might have.

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Goals and Policy Options for the City of Madison As demonstrated in the updates on recently closed grocery store sites, many situations regarding food retail operate in the private realm at the whim of market pressures that the City of Madison has a limited capacity to alter. Essentially, as long as a particular parcel is owned by a private entity, the City as an entity faces significant limitations on what can be done to ensure that a particular use (a grocery store) occurs on site. The City has and will continue to support citizen-led initiatives and aid in negotiations to promote grocery stores on a site-by-site basis. At the most drastic level, the City could utilize eminent domain and condemn a parcel of land for the public good, acquire it, and prepare it for redevelopment with the hope of attracting a grocery store. To do this is extremely rare, and would require an unlikely set of circumstances. Even then, however, a grocer would not come about automatically. There are a few places within the existing policy and planning framework worthy of recognizing, and perhaps amending, in order for the City of Madison to take proactive measures to retain existing food retail businesses and encourage neighborhood grocery stores to locate in developing and re-developing neighborhoods. Recommendations for three general goals are outlined below, followed by a framework of realistic opportunities to work towards those goals within municipal policies and programs. General Goals 1) Retain a diversity of food buying options and preserve maximum access to nutritious, affordable, and culturally appropriate food choices for all Madison residents.

2) Encourage the development of small and medium sized grocery stores in developing and re-developing neighborhoods to provide food-purchasing options within proximity to residents in neighborhoods across the City of Madison.

3) Encourage food related entrepreneurial & employment opportunities that support one or both of the above goals.

4) Support Madison-owned grocery stores to the extent possible.

Since the four goals are so closely interrelated, it is difficult to pull apart and suggest policy options to work toward them separately. Further, significant input from the Neighborhood Grocery Store Committee and City of Madison staff in order to shape specific policies and determine specific triggers for action if necessary. Therefore, rather than breaking down each goal into specific objectives and recommendations, what follows is a policy framework within which specific language and/or programs could be added to explicitly include the importance of preserving and maintaining neighborhood grocery stores in the City of Madison.

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Comprehensive Plan Process Madisons comprehensive plan process is a crucial and very current place to include support for existing and new grocery stores. The land use and economic issues linked to grocery stores are relevant in both developed and undeveloped areas of the city. While grocery stores are recognized as key components of healthy neighborhoods in some existing plans, and are being planned for in undeveloped areas, no specific guidelines regarding grocery stores currently exist. As citizen groups and neighborhood associations meet to contribute to the planning process, grocery stores should be explicitly recognized as key components of healthy and livable neighborhoods. Where possible, specific language should be included in the Comprehensive Plan to identify grocery stores as important considerations for developing and redeveloping neighborhoods. Land Use Regulation In all existing commercial zoning districts in Madison, grocery stores are currently a permitted use, and are limited to 50,000 square feet unless a conditional use is provided. While grocery stores are widely allowed within the zoning code, perceived inadequacies in market demand and space for parking are often limiting factors in the business decisions of food retailers. These are more related to market factors than to specific regulatory barriers Importantly, mixed-use developments which could include grocery stores on ground floors- are allowed and encouraged in commercial zones. From a developers perspective, such developments may render grocery stores financially feasible in the long run, since the inclusion of other uses (second and third floor office or residential) could significantly offset the low rents food retailers can afford. Further, mixed-use developments may be better able to work out shared parking arrangements, and perhaps even include underground parking to minimize the need for large surface lots. Rather than specific changes to zoning policy to accommodate grocery stores, the following two recommendations may help to support neighborhood grocery stores in existing and developing neighborhoods: During the review and negotiation process for Planned Unit Developments and mixed-use development proposals within commercial zones, possibilities for including food retail should be considered and analyzed (see page 4 for examples). When possible, planning staff and property owners should initiate Shared Parking negotiations between potential grocers and nearby businesses in order to minimize the need for new surface parking. Financial Assistance Loans: There are two city financial resources in which existing loan programs could explicitly support grocery stores: The Community Development Block Grant (CDBG) program and Capital Revolving Funds. Through its Business Loan Program, the Madison Development Corporation (MDC) is able to obtain CDBG funds and provide loans for businesses that are creating new jobs in the City of Madison. Though it is certainly not specific to food retailers, MDC has assisted a handful of other food retailers in the past, and could certainly be considered as a future source of assistance.

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While essentially operating in the same way, CDBG and the Capital Revolving Loan Program could set-aside a percentage of their funds each year for food retail businesses, to ensure that among all small businesses, applicants from food retail businesses providing entrepreneurial and employment opportunities are identified and supported in Madison neighborhoods. Within the Capital Revolving Loan Program, funds could be dedicated for equipment upgrades and facade improvements for existing grocery stores. Tax Increment Financing (TIF): Put simply, TIF is an economic development tool that allows municipalities to invest in public improvements, attract private investment in an approved district, and utilize property tax from the increased tax base within that district (the tax increment) to pay back the loans needed for the initial public investment. When initial public costs are recovered, the district is terminated, and its increased value is returned to the general city tax base. According to Wisconsin legislation and City of Madison policies, TIF should primarily be used to encourage the redevelopment of blighted urban areas. Importantly, TIF should be limited to those areas where private investment would not otherwise occur without initial public expenditures. By itself the need for a grocery store will not likely be a catalyst for the formation of a new TIF district. However, financial assistance for businesses locating in existing TIF Districts is a strong possibility. Through TIF policies and procedures, there are a few ways for the City of Madison to support grocery stores, specifically. When proposed TIF districts are reviewed, considerations should be made regarding grocery store access and the need in and surrounding the proposed district. Within existing TIF districts, where a grocery store would be appropriate, recruitment of and financial assistance for grocery stores should be a priority. Within existing TIF districts, where a grocery store (alone or within a mixed-use development) would be appropriate, but lack of adequate parking prevents a major barrier, the financial feasibility of providing support for parking infrastructure with tax increment should be assessed. Neighborhood Planning Grants: Currently, Neighborhood Planning Grants are awarded to neighborhood and business associations to assist with strategic planning for the future. In 2004, a total of $20,000 will be divided among various applicants across the city. As neighborhood groups have taken the lead on organizing in support of grocery stores on Madisons North and West sides, this seems an appropriate way in which they could gain financial assistance from the city. Specifically, where cursory market studies have fallen short in illustrating the true need for grocery stores, citizens on the North side are sponsoring market basket analyses and door-to-door surveys to determine true food purchasing options and needs in the area. Through Neighborhood Planning Grant programs, neighborhood associations should be able to gain financial support for administering market surveys to aid in recruitment of grocery stores appropriate to serve neighborhood needs. Further, City staff could perform outreach to encourage neighborhood groups to apply for grants for this purpose.

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Real Estate Strategy If a grocery store is much needed in a particular neighborhood, yet simply not being provided by the market, it is possible for the City to invoke its authority to condemn, purchase, and resell land at a belowmarket rate for the specified development of a grocery store. This particular scenario is rare because of the great expense incurred to the City, yet procedures for condemnation are important to clarify. The City has broad discretion for condemning properties in order to eliminate blight or to serve a public purpose. The most likely way for condemnation to occur to make way for a neighborhood grocery store would be in conjunction with the elimination of blight. Before condemnation can occur for this purpose, a particular parcel or group of parcels must be declared a Redevelopment District, which requires a period of 90 days and a public hearing. After a Redevelopment District is created, it can take several months to relocate existing tenants (if applicable), before the City or the Community Development Authority (CDA) can condemn and acquire control of the property. If this were to occur, the next step would be for the City to complete any necessary demolition, environmental remediation, or infrastructure improvements before releasing a Request for Proposals (RFP) for a specific type of development. Importantly, within an RFP, the City or CDA could certainly specify that a grocery store of a particular size must be included in a proposed development. The creation of a Redevelopment District not only authorizes the City to condemn land, but also to bond for necessary improvements- a much less expensive scenario. Thus, if a current private landowner wishes to make necessary improvements to locate a grocery store within a Redevelopment District, but demonstrates need for financial assistance to do so, the City may issue bonds to assist with improvements rather than condemn the property. Within existing Redevelopment Districts, City staff may assess the need for neighborhood grocery stores and the suitability of blighted parcels. If both inadequate food retail access and suitable sites are discovered, discussions could be initiated with landowners and developers to determine the feasibility of locating a grocer in the district. Depending on the level of need for a grocery, and the suitability of parcels, municipal bonds and or condemnation should be considered as methods by which the City can support improvements on the blighted sites to attract grocery stores. Where severe need for a grocery store is shown outside of existing redevelopment districts, assessments of blight in the area may be undertaken to determine whether or not the creation of a Redevelopment District is an appropriate way to initiate City involvement. Market Analysis Within the City of Madison Department of Planning and Development, market studies are often completed to assist the private sector in making business location decisions, or to recruit particular types of businesses. As an item within the capital budget, Preliminary Planning Grants are the major source of funds for these studies, which focus primarily on redeveloping areas. The Department of Planning and Development should assess the need for upgrades of market analysis software to more efficiently and accurately capture neighborhood food needs. As market analyses for food retail are completed, procedures and findings can be shared and utilized as educational tools for citizens on the City of Madison website.

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Other Options / Related Opportunities

1) Create a Food Policy Council Rather than considering the formation of a completely new committee requiring support from City staff, a Food Policy Council could be created to better coordinate and prioritize proactive measures to address the following issues, each of which already receive attention from City staff in some form: Hunger Prevention, Nutrition & Health, Grocery Stores, Community Gardens, and Farmers Markets. Successful Food Policy Councils with City (and often County) support have been created in many North American cities, and are important to consider as ways to better understand and prioritize responses to the many ways people, cities, and landscapes are affected by food (Borron, 2003; Portland-Multnomah Food Policy Council, 2003.) Pursue funding for the creation of a Food Policy Council, possibly as a partnership with Dane County 2) Focus on a Transportation Strategy to Increase Access to Grocery Stores This report has focused primarily on municipal land use and economic development strategies to encourage grocery stores. However, an alternative strategy might focus on providing more convenient transportation options for seniors and others without vehicle access to existing full-service grocery stores. Importantly, the Metro Transit Ride Guide already identifies grocery stores as popular destinations along bus routes, but perhaps transportation and food could be more closely linked as a short term strategy to increase access to a variety of food choices Support a focused campaign to inform citizens of existing Metro transit options to and from grocery stores Evaluate the transportation needs of senior citizens and those without vehicles in Madison, and expand public transportation options to grocery stores or support food delivery programs accordingly Explore opportunities to work with taxi companies to provide free or reduced rates to full-service grocery stores for those that meet a particular set of criteria, such as participants in the Women, Infants, and Children (WIC) program or food stamp recipients 3) Promote Energy Conservation as an Opportunity for Food Retailers to Cut Costs With substantial energy needs for lighting and refrigeration, energy efficiency within the grocery store industry can have a significant impact on profit margins, and help to keep small, independent grocers profitable. Moreover, the concept of energy efficiency contributes to more ecologically sustainable businesses and neighborhoods. The Citys Energy Task Force, MG&E, and the Neighborhood Grocery Store Advisory Group could initiate a joint research effort to document current energy use in Madisons grocery stores, compile information on State and Federal support programs supporting energy efficiency, and distribute this information to business owners. 4) Assist Area Food Producers and Small Grocery Stores by Supporting Local Food Distribution Provide support for the Centralized Agriculture and Food Facility (CAFF) project as a means to support area farmers and scale up the distribution of fresh and local foods to grocery stores of all sizes, foodservice institutions, and restaurants

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Potential Partners/ Related Programs

The preceding recommendations omit- though hopefully support- the much needed parallel efforts undertaken by citizens, entrepreneurs, non-profit organizations, and the private sector to preserve and encourage neighborhood grocery stores in the City of Madison. In addition, many of the recommendations would require finding State, Federal, and private funding sources to leverage City support. As evident in the report, issues related to grocery stores are quite complex, and include food security and health, urban land economics, neighborhood livability, entrepreneurship and job training, and more. The following list illustrates both the sheer complexity of grocery store issues, as well as the immense potential for public, private, and non-profit entities to organize cooperative efforts to support the goals outlined in this report. City of Madison Departments Department of Planning & Development Office of Business Resources Community Development Block Grant Community & Economic Development Unit Planning Office of the Mayor Madison Metro Transit Traffic Engineering Department of Public Health State of Wisconsin Agencies, Programs, and Possible Funding WI Department of Administration: Focus on Energy Program WI Department of Health & Family Services WI Department of Commerce: Business Incentives WI Department of Agriculture and Consumer Protection WI Housing & Economic Development Authority (WHEDA): Small Business/Agriculture Financing Federal Funding Possibilities Dept. of Housing & Urban Development (HUD) Economic Development Initiative USDA Community Food Projects Grants http://www.csrees.usda.gov/fo/fundview.cfm?fonum=1080

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Area Nonprofit Organizations related to Food and Hunger Prevention Dane Cty Hunger Prevention Council http://www.madison.com/communities/hpcdc/index.php Community Action Coalition http://www.cacscw.org REAP (Research, Education, Action, and Policy) Food Group http://www.reapfoodgroup.org Friends of the Dane County Farmers Market Friends of Troy Gardens University of Wisconsin Entities UW Extension Center for Cooperatives Center for Integrated Agricultural Systems Department of Urban and Regional Planning Department of Consumer Science Community & Economic Development Organizations Madison Development Corporation
Commonwealth Development Wisconsin Women's Business Initiative Corporation Wisconsin Business Development Finance Corporation http://www.mdcorp.org/ http://www.cwd.org/ http://www.wwbic.com/ http://www.wbd.org/

Private industry leaders

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Conclusion
Grocery stores offering affordable, nutritious foods are a vital component of healthy lifestyles, healthy neighborhoods, and a healthy city. With regard to equitable access to food choices, sustainable neighborhood development, and support for food-related entrepreneurship, food retailing becomes a public issue. The prevailing trends of the food retail industry are a nearly impossible tide to turn in any city without strong public private partnerships, changes in consumer purchasing patterns, and transportation choices. That said, organized action on the part of City agencies can be an important part of a proactive effort to retain the diversity of existing food retailers and encourage the development of neighborhood grocery stores to better meet the needs of city residents. Within the existing framework of land use, financial assistance, and redevelopment policies, city agencies should explicitly recognize neighborhood grocery stores as a vital component of the city as a whole. Innovative partnerships with citizen groups, non-profit organizations, State and Federal agencies, private industry, and the University of Wisconsin are likely to significantly strengthen the effort and provide a model for other Wisconsin cities facing similar needs. However, In order to keep grocery stores in city neighborhoods, responsibility also rests on city residents, who must continue to recognize their many benefits and support them. Even for those with easy access to transportation, finances, and food choices throughout the City, the benefits of having entrepreneurial and employment opportunities and nutritious food choices within a short distance from home are wellworth supporting. For those without easy access to transportation, the benefits of having full-service neighborhood grocery stores may be even more important. Through consumer choices and input into neighborhood and comprehensive planning processes, each and every citizen can be a part of the effort to retain and encourage neighborhood businesses that offer nutritious, culturally-appropriate, and affordable food choices to all Madison residents.

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