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New Supermarkets Planned for Underserved New Orleans

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This article was published in The Louisiana Weekly in the Sept. 5, 2011 edition.

Residents in parts of New Orleans exit gas stations and "dollar stores" with big bags of groceries in their arms. And they're not carrying picnic food. It's tonight's dinner and pantry-stocking for tomorrow's meals.

But the city may have healthier options soon, grocers say. Some of the estimated 60% of supermarkets destroyed in Katrina have been replaced, and more are in the pipeline, with new stores planned for the Lower Ninth Ward, New Orleans East and other barren food spots.

The Lower Ninth may be one on the toughest, local spots to buy a head of lettuce or a piece of fish. "We're bracketed by two Dollar General stores on St. Claude, selling household items, milk, eggs and packaged and frozen food," said Tracy Nelson, executive director of the Lower 9th Ward Center for Sustainable Engagement and Development. The St. Claude thoroughfare is also punctuated with convenience stores that are long on processed food, chips and candy.

The nearest supermarkets are in Chalmette, across the parish line. "You need a car to get there, and your sales taxes go to St. Bernard Parish, not Orleans," Nelson said. The closest farmers' market is Sankofa, open only on Saturday in the Bywater section of the Ninth Ward.

About 130 people attended a neighborhood meeting in the Lower Ninth on Aug. 11 to hear about plans for a supermarket at the former Holy Cross School."The meeting was very positive though some neighbors said they'd prefer to see business develop on the St. Claude Ave. corridor," Nelson said.
She continued, saying "but when a choice was presented at the meeting of a supermarket at the old school, or no market at all, people overwhelmingly said they wanted it at the school site."

Developer Reuben Teague, principal of New Orleans-based Green Coast Enterprises, hopes to revamp the former Holy Cross School for mixed uses, including a grocery store and other retail space, offices for non-profits and housing. Teague said "access to groceries is a high priority for Lower Ninth Ward residents, and we hope to partner with Sterling Farms to provide fresh food."

Founded in New Orleans earlier this year, Sterling Farms is owned and operated by city native and "Treme" Home Box Office star Wendell Pierce, along with grocery operator James Hatchett of Chicago and New Orleans management consultant Troy Henry. They plan to open four grocery stores in the city in the next two years, Henry said. At least one of those sites is slated for the Lower Ninth Ward, one for the Gentilly section and one for Uptown. Sterling Farms founders spoke at the Aug. 11 community meeting about opening a store at the former Holy Cross School, and are negotiating for that site.

"Sterling Farms hopes to become a premier supermarket group, offering better shopping experiences in New Orleans and other underserved urban markets," Henry said.

At Robert Fresh Market, Chief Financial Officer Lori Schmitt in New Orleans said "we operate three supermarkets in Orleans, one in Metairie, and hope to reopen our store at St. Claude and Elysian Fields, where we have a lease but are in litigation with the landlord." The St. Claude store was destroyed by Katrina flooding, winds, looters and no power.

Meanwhile, Wal-Mart plans to move into areas needing groceries. Tice White, Wal-Mart spokesman in Jackson, Miss., said "we're currently working through details with New Orleans Redevelopment Authority regarding our intent to build a Supercenter, approved by NORA, on Chef Menteur Highway in Gentilly."

He said "we're also looking specifically at opportunities in New Orleans East, in addition to analyzing other areas within the city to expand, especially underserved and 'food desert' areas." The company has store formats of various sizes that may fit the needs of certain communities, he said.

Wal-Mart operates two stores inside New Orleans and eleven in the greater New Orleans area, not including its Slidell locations, White said.

The city's "sliver by the river" on the levee side of St. Charles Ave. has a number of supermarkets, but few shopping options exist in nearby Central City. The Fresh Market, based in North Carolina, recently signed a lease for the former Borders bookstore at Louisiana and St. Charles Avenues, according to Lisa Klinger, Fresh Market's chief financial officer.

"We expect to open sometime next year but don't have a projected date," Klinger said. "We're currently looking at additional sites in the New Orleans area, but don't have any other sites under lease." Fresh Market hasn't received any direct financing from the City of New Orleans, she said.

In March, the Landrieu Administration launched the New Orleans Fresh Food Retailer Initiative. Aimee Quirk, the Mayor's advisor for economic development, said "low-interest and forgivable loans are available to grocers from $7 million that the city received in federal, community-development block grants and a private match of $7 million--from Hope Enterprise Corp., a Mississippi-based community development group." The U.S. Dept. of Housing and Urban Development provided block grants under a Katrina-Rita recovery program.

"We've had a lot of interest, but so far no companies have been funded under the Fresh Food program," Quirk said. The city has partnered with Philadelphia-based Food Trust, a nutrition advocacy group, to attract supermarkets, she noted. Meanwhile, the city's Corner Store Initiative, encouraging fruit and vegetable sales, expired back in 2008.

The Mid City area in New Orleans needs more markets. Winn-Dixie Stores has signed a lease for space on No. Carrollton, according to Chris Abadie, sales and leasing executive at Stirling Properties in New Orleans. But a Winn-Dixie spokesman in Florida declined to comment on that site.

When asked, Costco Wholesale Corp. in Washington state wouldn't comment on industry talk that the company plans to build a membership store at the former Carrollton Shopping Center, located across from Xavier University near Interstate-10.

As for downtown, Rouses' store on Baronne St. will open in mid-November, Don Rouse said last week. The more than 40,000-square-feet site is located in the former Sewell Cadillac building. "We have no immediate plans for additional stores in New Orleans but are always looking for new locations," he said. "The city's Fresh Food Retailer Initiative program sounds interesting but we haven't participated in it."

In the Warehouse District, Poeyfarre Market opened across from the Cotton Mill residence on July 1, filling a vacuum in that area.

Some of the region's grocers, like Jay Breaux at Breaux Mart, worry about the long-term implications of customers buying staple foods and beverages at drug stores, dollar stores and other non-traditional outlets, and how that may cut into supermarket revenues. Breaux Mart has five stores in Greater New Orleans, including one on Magazine St., and is looking at other sites in the city.

Tennesee-based Dollar General operates ten stores in Orleans Parish. When asked about talk that Dollar General will start selling beer in the city, company spokeswoman Tawn Earnest said "we haven't applied for any beer licenses in Louisiana."

Schmitt at Robert Fresh Market and other industry members noted that insurance rates for commercial properties have climbed since Katrina. But with with two-thirds of the city's population back and in need of three meals a day, New Orleans is a better place for grocers to invest than it was a few years ago. -end-