Reinvestment Fund provided New Markets Tax Credit (NMTC) financing to support the construction and permanent financing for a supermarket and retail center called Progress Plaza in North Philadelphia. Progress Plaza is located in an area with median income below 70% of the AMI and unemployment almost 1.5 times the U.S. average.
Progress Plaza is the nation’s oldest African-American owned and operated shopping center. The center was built in 1968 by civil rights leader Rev. Leon Sullivan and had been in disrepair for more than a decade since its anchor tenant, a supermarket, moved out. The vacancy dominated the center as the owners struggled to find a grocery store operator who understood how to manage a store in an urban market.
Reinvestment Fund worked with the owners to secure an experienced supermarket tenant. With the financing, we helped the owners and the supermarket operator renovate the center, demolish the old supermarket and construct a new one in its place. The three-phased development project also included the development of a two-story office building and retail space. The final phase was the completion of the supermarket, which opened on December 11, 2009.
Reinvestment Fund’s NMTC financing enabled a lower debt service that permitted the retail center’s long-term tenants to stay at lower rents instead of vacating their space and re-tenanting. It also allowed the retail center to maintain the amenities the community valued. The NMTC financing also accommodated the higher costs of a slower rehab, reducing the burden on existing tenants and making it more affordable for the developer to create structured parking on the supermarket roof.
The renovation of the retail center, enabled it to retain 45 jobs and create 8 new jobs. The retail center expects to add more jobs as it fills the 6,000 square feet of new office space and 6,000 square feet of retail space available for rent.
In addition to NMTC financing, Reinvestment Fund also provided the supermarket with $1.9 million in equipment financing through its Pennsylvania Fresh Food Financing Initiative. Reinvestment Fund also provided $1 million from its 2009 CDFI Fund Financial Assistance award as part of a leverage loan for the supermarket project.
The new 46,000 square foot, full-service supermarket brings affordable healthy food choices to the community, as well as 272 jobs. To date, 80% of the supermarket’s full-time jobs have been filled by residents from the surrounding neighborhood. The supermarket also has several green features, including efficient refrigeration systems that boast a 40% reduction in energy consumption over comparable systems. The supermarket also has an energy management system that continually monitors power consumption in every device and automatically adjusts systems to minimize energy consumption based on daylight, temperature and shopping traffic.