[Durham INC] Subsidizing Save-A-Lot

Thu Jan 12 11:10:18 EST 2012

Excellent email Councilman Woodard.

Also, your suggestion to be placed on the agenda was my case-in-point; INC's Leadership Team would best serve the organization by encouraging group discussion and soliciting fact gathering from the parties directly involved in a matter; not via individual opinion-forming, immediate written action/position to Elected Officials and Department Heads (based on media reporting), then, followed by 'group discussion.'  

Given the many corrections you've made to the initial email, it is unfortunate that it appears that you and Mr. Dick will not be able to be placed on the upcoming agenda.  

Thanks again Councilman Woodard for yet again, bringing administrative perspective to a matter.  Elected Officials and Department Heads are often caught with deals that need to be approved, or rejected.  

I commend the Mayor, this City Council and Kevin Dick and the Workforce Development staff for taking action to engage in making our motto a reality: good things are happening in Durham.  

Yours,

Darius

--------------------------
Darius M. Little
Executive Business Consultant and
Strategic Marketing Analyst

(web) www.linkedin.com/in/dariuslittle

Manta Business Profile/Report: 

http://www.manta.com/c/mtlwj1m/little-s-business-consulting

-----Original Message-----
From: "Mike Woodard" <mike at mikewoodard.com>
Sender: inc-list-bounces at rtpnet.org
Date: Wed, 11 Jan 2012 19:30:55 
To: <inc-list at durhaminc.org>; <bulldurhamnc at yahoo.com>
Subject: Re: [Durham INC] Subsidizing Save-A-Lot

John is correct that I have not had time to respond to his email, especially since only 18 minutes passed from the time he sent the email to City Hall and posted it here.

I have had conversations with Kevin Dick, Deputy Manager Chadwell, and Manager Bonfield over the last two days. I will respond briefly to John's questions and concerns. Kevin will respond more fully in the next few days.

John, I'd like for you to schedule a presentation by me and Kevin at the upcoming INC meeting so we can do a couple of things.
1) Address the concerns in your email and others' emails fully to the membership.
2) Share with INC information about the City's incentives programs. It will be important for neighborhoods to understand more about this policy as the City continues its work to provide incentives all over Durham.
Please confirm that we will be able to present.

Here are my brief comments. I will be happy to respond more fully on the 24th,

1) The possibility of securing Save-A-Lot never "fell apart." Given the overwhelming support from the community when the City first began talking with potential stores, the OEWD staff continue to work this deal. Their diligence and patience paid off and should be congratulated. Sometimes, after all this work, these opportunities become final quickly and require a fast response from the City.

2) The City's investment of $150K is leveraging $1.9M of investment in the Winn-Dixie store and site that sat empty for about 15 years.

3) There was no promise, or assumption, that Save-A-Lot will be a "smaller Whole Foods." The Council was briefed fully by the OEWD staff on Save-A-Lot's business model.

6) I welcome all three grocery stores in the area (Los Primos, TROSA, Save-A-Lot) and am confident the community can support all three.

7) Given the work I've done on the Alston Avenue widening, I was very specific in questioning OEWD staff if Save-A-Lot representatives were aware of the latest widening proposal. I was assured they were made aware and wanted to move forward with their plan. Given the hard-fought battle that resulted in the current widening plan, I find it very unlikely that either the Council or the NCDOT will revert to the original plan. Remember: some of us fought very hard to protect Los Primos.

9) Save-A-Lot wants to place stores in dynamic, growing cities like Durham. Their representatives believe this will be a successful store.

10) All I will say here is that I'm pleased we will have three grocery stores, of different kinds, in the area and i'm confident they can thrive financially and serve residents well.

See you on the 24th at the INC meeting.

Mike Woodard
City Council

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Mike Woodard
Email: mike at mikewoodard.com
Web site: www.mikewoodard.com
Mobile: 919.599.5143

-----Original Message-----
From: "John Martin" [bulldurhamnc at yahoo.com]
Date: 01/10/2012 02:55 PM
To: inc-list at durhaminc.org
Subject: [Durham INC] Subsidizing Save-A-Lot

In the interests of full disclosure, I sent the following email to the City Council and Tom Bonfield and Kevin Dick.  I mentioned my position in INC because I think it is relevant, but I did not claim that what I have to say represents INC.  No one, to my knowledge, has had time to weigh in on this.  

If you missed Ray Gronberg's story in the Herald-Sun, here it is:

http://www.heraldsun.com/view/full_story/16988450/article-City-approves-incentives-for-new-Alston-grocery-?

Mayor Bell and Members of the City Council,

I was very surprised to read in the Herald-Sun that the City  Council voted 6-0 to give $150,000 of taxpayers’ money to a private company to renovate the old Winn-Dixie at the corner of Liberty St. and Alston Ave.  I would like to raise the following issues and questions:

The City needs to talk to neighborhoods about projects like this.  As vice-president of the Golden Belt Neighborhood Association and president of the Durham Inter-Neighborhood Council, I did not know that anything like this was still being considered.  Two years ago, this was talked about, but it seemed to fall apart.  When did the City start reconsidering this?  What neighborhoods did it consult, and when?  Specifically, which persons were consulted?According to the Herald-Sun, the City did not talk to an existing grocery store, Los Primos, about moving to the site.  Instead the City has apparently chosen to give $150,000 to a large out-of-state corporation, headquartered in Eden Prairie, Minnesota, rather than a locally-operated, minority-owned, business.  Supervalu, the parent of Save-A-Lot, has a corporate market capitalization of 1.75 billion dollars, according to Bank of America/Merrill Lynch. Why did the City prefer to subsidize a large corporation rather than a local, small business?What kind of store will Save-A-Lot be?  According to Mr. Kevin Dick, in his presentation to the Council, Save-A-Lot will increase the “availability of  healthy produce and fresh meats,” and lessen the “food desert” in Northeast Central Durham.  Mr. Dick’s presentation would lead us to believe that Save-A-Lot is a smaller version of Whole Foods.  In fact, according to Standard and Poor’s  corporate stock report:  “Save-A-Lot food stores are typically 15,000 square feet and stock 1400 high volume food items as well as a limited number of general merchandise items.  The majority of food products offered for sale are private label products.  The company positions itself to offer low prices by carrying a limited selection of the most frequently purchased goods.”  Thus, the City Council should be under no illusion that it is providing funds to establish a high-quality grocery store.  Save-A-Lot is the grocery equivalent of Dollar General, and while such stores are welcome, they are not normally subsidized by the government.How big will this store be?  The contract says it will be “approximately” 12,202 square feet.  That size is twenty percent smaller than the average Save-A-Lot, which means that the store will carry a smaller selection of goods than even a typical Save-A-Lot.  The existing Winn-Dixie building is 8,256 square feet according to tax records.  Thus the existing building will need to be expanded by about 50% in order to reach the contract size.  Yet the rendering included in Mr. Dick’s presentation simply shows the same building with a new facade.  How do they propose to expand this building?  Given that the proposed Alston Ave. widening will take some of the existing parking lot, an expansion seems problematic.  Has the Council actually seen a proposed building plan?The Herald-Sun cites Mr. Dick as saying that neither Los Primos nor the TROSA Grocery on Angier Ave. “are the kind of stores that someone can walk in and do a week’s shopping, a niche that the Save-A-Lot should fill. . .”  I live a block-and-a-half from Los Primos, and I go several times a week.  I see many people who are doing their weekly shopping.  Moreover, Los Primos offers free delivery to people without automobiles.  Will Save-A-Lot do the same?  In any  case, according to the tax records, Los Primos is 10,203 square feet, almost 25% larger than the present Winn-Dixie, and about 16% smaller than the Save-A-Lot will be if it is expanded to 12,000 square feet.  Is it really creditable to believe that 16% more space is the difference between being able to do weekly shopping or not?What  effect will this new store have on Alston Ave. widening?  Originally, the planned widening would have destroyed Los Primos.  The plan was changed to save Los Primos because of the “environmental justice” issue:  there would be no grocery store in the neighborhood.  If Save-A-Lot moves in, will the Council allow DOT to revert to the original plan and destroy Los Primos?  If so, Mr. Dick’s claims of “new jobs” produced by the incentives is imaginary.  The “new jobs” will be bought at the price of jobs lost at Los Primos.  Moreover, a local, minority-owned, business will have been destroyed chiefly for the benefit of a large corporation.  Is this what the Council intends?   The old Winn-Dixie is an eyesore, and everyone would like to have it improved.  That said, it is important to remember how we got this eyesore. Winn Dixie closed the store in the mid-1980’s after getting “incentives” to open a new store in Phoenix Square.  If Save-A-Lot causes TROSA Grocery to close, we will just be repeating this scenario:  a new store causes an old store to close and creates a new eyesore where the old store used to be. If TROSA Grocery closes, how will that benefit the Angier Ave./Driver St. area that the City has  proposed spending large amounts of money to improve?  Ultimately, Winn-Dixie went bankrupt and closed all of their North Carolina stores.  There is obviously no guarantee that this Save-A-Lot, if opened, will necessarily stay in business.  According to Bank of America/Merrill Lynch, the parent company, Supervalu, has closed  an average of 55 stores per year during the last five years.   The company also has a high level of debt, and it has been trying to deal with its highly-leveraged position by cutting costs and closing unprofitable stores.Finally, I am personally disturbed by the disparagement of Los Primos.  The claim that Northeast Central  Durham is a “food desert” is based on nothing more than the personal preferences of some people.  But I go into Los Primos regularly.  It is a thriving, vibrant store that supplies ethnic foods that will almost certainly not be among the Brand-X goods offered by Save-A-Lot.  If it is destroyed in favor of Save-A-Lot, you will be killing a genuinely diverse store.  Is this what you want?  Please rethink this.
John Martin  

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