In September 2013, residents in the city of Chester, Pennsylvania got their first grocery store in years. Operated by Philabundance, the Delaware Valley’s largest nonprofit hunger-relief organization, the Fare & Square grocery store brings approximately 23,500 square feet of food retail space to Chester, offering a full range of food staples for purchase, a large selection of fresh vegetables and produce, and several cases for meat, fish and dairy products—all at below-market prices.
Chester is one of 6 pilot cities selected by the White House Council on Strong Cities, Strong Communities to spur economic development. Like each of the pilot cities, Chester has faced long-term challenges to its economic growth.
The grocery store is located in a USDA-defined Food Desert and a Limited Supermarket Access (LSA) area. In fact, a significant portion of Chester – including its entire downtown – is situated within one large LSA area. The LSA includes more than 15,000 residents who do not have adequate access to a full-service supermarket. Reinvestment Fund’s analysis also estimates that residents currently spend about $36.5 million of grocery dollars outside Chester and the surrounding low-income communities of Trainer and Marcus Hook.
Reinvestment Fund’s financing of the Fare & Square project is the culmination of numerous attempts to attract healthy food retailers to this severely distressed area. The project is an innovative business model that offers Chester residents access to affordable, nutritious food staples on a reliable basis allowing shoppers to stretch their dollars. The store offers low-cost, at-cost, and donated foods to Chester residents, with a focus on residents at or below 200% of the poverty level (59.88% of the city’s residents as of 2010).
Reinvestment Fund provided two financing products to support this key project. The first is a bridge loan made possible by revolved dollars from the now fully deployed Pennsylvania Fresh Food Financing Initiative, and federal Healthy Food Financing Initiative funds. The bridge loan advanced a Pennsylvania Redevelopment Assistance Capital Program grant, a forgivable loan from the Delaware Valley Regional Economic Development Foundation and a private grant. Reinvestment Fund also partnered with Nonprofit Finance Fund to provide New Markets Tax Credit financing to support this project. The NMTC financing helped Philabundance acquire and renovate the grocery store property as well as cover equipment and other start-up costs needed to operate the grocery store. This project has also attracted considerable support through a range of philanthropic and private institutions including the Robert Wood Johnson Foundation, the Rockefeller Foundation, Sunoco and Wawa.
The store is Philabundance’s first foray into supermarket real estate. In Fare & Square, residents of Chester can now experience walking into a grocery store and choosing from a wide range of healthy food options that suit them. Fare & Square operates as a nonprofit, allowing for customers to buy much of their food at cost. The grocery store might best be described as a food center, which gives customers access to a full range of food staples for purchase at a low cost, along with donated a percentage off of future purchases for members who qualify.
All are welcome to become Fare & Square members at no cost, provided they self-declare their income, amongst other data. Customers determined to be below 200% of the federal poverty level are then eligible for “Carrot Cash” benefits, which reduces a percentage off of future purchases. Fare & Square also accepts Supplemental Nutrition Program (SNAP) benefits further improving food access for low-income Chester residents. The store houses a community center to assist customers in signing up for SNAP/Food Stamps along with connecting them to other programs and services that promote health and self sufficiency.
Approximately 50 people have graduated from a five-week service industry training course to prepare them to be great applicants for these supermarket jobs. As is common with all Philabundance programs, trained volunteers will round out the store’s workforce. Philabundance is also actively engaging the local community to solicit ongoing feedback to improve the store and its services. Fare & Square has a Community Advisory Council made up of Chester residents and representatives from key institutions in Chester.