Getting a grocer into Norfolk food desert hasn’t been for lack of trying, broker and city say

It was pre-pandemic and Neal Sadler, a broker with S.L. Nusbaum, knew that the Save A Lot grocery store in the Norfolk shopping center he leased was on its way out, taking with it the only fresh food market option for many residents nearby.

Sadler said he was close — this close — to having a new grocer move in when COVID-19 upended the world earlier this year.

“It was just a big, ‘Uh-oh,’” he said of the moment. Now, the location has become a focal point for the city and community groups who fear the consequences of the St. Paul’s neighborhood, which is mostly public housing, becoming a food desert.

The city — which also has been trying to lure a grocery store to the Berkley neighborhood for more than two years since Farm Fresh closed a location there — has been offering incentives to would-be grocers to move in 720 Church St. Most recently, the Pamunkey Tribe, which wants to win over Norfolk voters for a November election that would allow it to operate a casino in city limits, offered $150,000 to a grocery store willing to move to the area.

It would be easy to assume that a pandemic that pushed many people to stock up on more groceries and eat in, not out, would have grocers thinking about where to expand. Instead, supermarket owners have battened down the hatches as they wait to see what happens next, Sadler said. They want to see that even in normal, non-pandemic times, a location will pencil out financially.

Missouri-based Save a Lot, for example, needed to get out from under significant debt to avoid bankruptcy.

Even with incentives offered, grocers are hesitant to make any moves.

“It just doesn’t work,” Sadler said. The landlord, the city and prospective tenants all appear to be at their limits as to what they can offer or give up, he said.

“We’re trying our hardest.”

Jared Chalk, Norfolk’s economic development director, said he and Sadler “wore each other out on the phone” as they worked to get a grocer in the space. Chalk said he meets weekly with a team on his staff to talk about it, knowing the need will only get worse.

“We’re close,” Chalk said. “It’s something we’re still working on now.”

He wouldn’t say how much or what the city has offered to would-be Save A Lot replacements, saying each offer has been unique based on a market’s needs. He described it, though, as a multi-year offer with up-front money to get it started and the potential to help keep it going longer.

“The range really depended on the success of the store,” he said, saying the city would look at a store’s financials annually to determine the need or if it was a good fit at all.

The city set aside $500,000 two years ago to get a new grocer in the Farm Fresh space in the Berkley neighborhood, but the carrot still hasn’t helped attract a long-term solution there.

“The last thing we want to do is incentivize a store to open and not see it survive after a couple of years,” he said.

He’s learned that grocers make much of their profit in their deli, seafood and wine sections. When those aren’t part of the equation, it can put pressure on a grocer’s already thin profit margins.

Family Dollar’s presence in the same shopping center might not be helping the pursuit of a traditional grocery store, Chalk said. Prospective grocers see a competitor next door. While Family Dollar doesn’t have a wide food selection, especially for fresh foods, it does have refrigerated goods and basics like milk and eggs that have made dollar stores an alternative for many shoppers nationwide where there’s no other grocer.

The city has also had trouble qualifying for federal grants that might help with any incentive package because a USDA food access research atlas map uses economic and transportation data from 2015 and doesn’t consider either the former Save A Lot location or the Berkley Farm Fresh store to be inside a “food desert.”

“We think it’s a food desert,” Chalk said. While there are plenty of geographic areas that do not have a grocery store, access to those stores is the key. “A lot of people don’t have a car. When you don’t have a car, that really becomes the issue.”

Sadler said the shopping center’s owner had been selling it and was five days out from closing when they found out Save A Lot would close. After losing the anchor store, COVID-19 came. The deal fell apart.

“It’s a perfect footprint for a national brand grocery store,” Sadler said noting its combined size of more than 30,000 square feet. “There are incentives coming out of our ears.”

He said that if every one of Save A Lot’s stores had performed like Church Street, the grocer might not have had to seek out a debt relief plan from its creditors.

“If it weren’t for coronavirus, I would have a Food Lion sign on that building,” he said, saying the grocer had been impressed with the numbers that were coming out of that retail corridor and were becoming convinced the spot could work for them, but wanted to send their executives to see it in person.

“And then, bam, coronavirus hits,” he said. “We’re trying every day.”

———

©2020 The Virginian-Pilot (Norfolk, Va.)

Visit The Virginian-Pilot (Norfolk, Va.) at pilotonline.com

Distributed by Tribune Content Agency, LLC.