TO: Mayor and Members of City Council
THRU: Kelly Olivera, Assistant City Manager
FROM: Christopher L. Cauley, MPA, Economic & Community Development Director
Derrick McArthur, Economic Development Manager
DATE: November 13, 2023
RE:
Title
Administrative Report - Feasibility of a Co-op on Murchison Road
end
COUNCIL DISTRICT(S):
Council District(s)
Districts 2, 3, and/or 4
b
Relationship To Strategic Plan:
Goal I - Safe & Secure Community
1.3: Ensure low incidents of property and violent crime.
Goal II - Responsive City Government Supporting a Diverse and Viable Economy
2.2: Community Revitalization - Invest in community places to ensure revitalization and increase quality of life.
2.3: Leverage partnerships for job creation and retention, with focus on local and regional workforce to increase per capita income.
2.4: Economic Development: Sustain a favorable development climate to encourage business growth.
Goal III - City Investment in Today & Tomorrow
3.2: Manage the City's future growth and strategic land use.
Goal IV - Desirable Place to Live, Work and Recreate
4.5: Neighborhood Vitality - Ensure a place for people to live in great neighborhoods.
Executive Summary:
City Council shall be briefed on information obtained by Economic & Community Development about the feasibility of a co-op grocery store being developed on the Murchison Road corridor.
Background:
Community economic development professionals routinely engage in retail recruitment efforts to address socioeconomic issues or increase economic activity. During the Murchison Choice Planning Grant, the community spoke of the need for healthy eating options. Food insecurity is closely correlated to obesity, mental health issues, high poverty, crime, and neighborhood security. Currently, grocery shopping along the Murchison Road corridor is limited to dollar stores and a local neighborhood store with meager food selections.
Issues/Analysis:
When considering actions to address food insecurity, there are several possibilities the City could explore: (1) Recruiting traditional grocery store models, (2) Assisting community-led efforts to create a grocery co-operative, or (3) Enhancing healthy food options at current retailers. A traditional grocery store is backed by a large company with marketing, distribution, and product selection, while a grocery co-op is locally owned by the members. Grocery co-ops are typically higher priced selections of locally sourced, organic, or niche food options, but there are models that serve to address food insecurity in lower income communities. These efforts are a product of community-led initiatives to develop, own, and operate a grocery store. When the community-led effort is helmed under a 501c3 (nonprofit) organization, they are sometimes supported by local governments.
|
Store Type |
Pro |
Con |
|
Traditional Grocery |
Corporate support |
Market driven |
|
(Implementation Timeline: 2-3 Years) |
Job opportunities |
Part time employment |
|
Co-Op Grocery |
Locally owned |
No established structure |
|
(Implementation Timeline: 7-10 Years) |
Not profit driven |
Cost of membership/food |
|
Existing Retail |
Faster changes |
Limited changes |
|
(Implementation Timeline: 1-2 Years) |
No land acquisition |
Current perception |
For each store type listed above, there are strategies the City could utilize to help mitigate food insecurity along Murchison Road. The City could engage a retail strategist to perform a market study, land analysis, and recruitment effort for a retail grocery store. The retail strategist would also help negotiate any incentives the City might provide a traditional grocer, including gap financing, zoning approvals, workforce recruitment, and training programs.
For a co-op grocery store, the City could contract with a consulting firm to assist community groups in the establishment of a co-op grocer. The City could also provide funding for land acquisition and operating expenses. In the examples reviewed by staff, cities typically funded consulting and land acquisition, while counties and grants provided assistance to offset operating costs. Staff also noted that in all examples reviewed, the effort to establish a co-op was led by the community, and the city’s support was secondary to the efforts of the community groups.
To incentivize existing retailers to expand their offerings of healthy food options, the City could offer additional façade improvement grants in exchange for a larger inventory of fresh foods and perishables.
Budget Impact:
Depending on the strategy employed, the costs could range from $50,000 for consulting to recruit a grocery store or develop a co-op, to in excess of $100,000 for façade improvement grants, gap financing, and workforce training.
Options:
For informational purposes.
Recommended Action:
No action required.
Attachments:
None.