Grocery Stores in City

Neighborhoods:

Supporting access to food choices, livable

neighborhoods, and entrepreneurial opportunities
in Madison, Wisconsin

Heather Stouder, Author and Intern

Office of the Mayor
Madison, Wisconsin
Mayor David J. Cieslewicz
May, 2004
 Table of Contents
Acknowledgements ---------------------------------------------------------------------------------------------------------- 3
Executive Summary --------------------------------------------------------------------------------------------------------- 4
Introduction -------------------------------------------------------------------------------------------------------------------- 8
Food retail as a public issue ---------------------------------------------------------------------------------------------- 9
Access to food choices ----------------------------------------------------------------------------------------------- 9
Livable and walkable neighborhoods ----------------------------------------------------------------------------- 11
Food-related entrepreneurial opportunities ---------------------------------------------------------------------- 13

Overview of trends in the food retail industry ------------------------------------------------------------------------- 14

Trends in consumer purchasing habits --------------------------------------------------------------------------- 14
Food retailing trends: Consolidation & standardization ------------------------------------------------------- 14
Food distribution -------------------------------------------------------------------------------------------------------- 15
Efforts by other cities to attract grocery stores in other cities ----------------------------------------------------- 16
Description of the diversity of existing grocery stores in Madison ----------------------------------------------- 18
Historical city intervention with grocery stores in Madison -------------------------------------------------------- 22
Updates on three recently closed sites --------------------------------------------------------------------------------- 24
Kohl’s Food Emporium, 2525 E. Washington Ave. ------------------------------------------------------------ 24

Kohl’s Food Emporium, Sherman Plaza, 2921 N. Sherman ------------------------------------------------ 25

Ken Kopp’s, 1864 Monroe St. --------------------------------------------------------------------------------------- 27
Goals and policy options for the city to preserve and encourage neighborhood grocery stores -------- 28

Potential partners ------------------------------------------------------------------------------------------------------------ 33

Conclusion --------------------------------------------------------------------------------------------------------------------- 35
Bibliography ------------------------------------------------------------------------------------------------------------------- 36

By Late May, 2004, this report will also be available

on-line at: http://www.cityofmadison.com and http://businessmadison.com
 Acknowledgements

In the ways it affects individuals, cities, and the fabric of communities, food retailing is an extremely
complicated issue. Determining appropriate and feasible ways for the City of Madison to support and
encourage neighborhood grocery stores is an on-going, collective effort. Hopefully, this document
provides a point from which City staff and citizens can move forward in support of equitable access to
food choices and neighborhood grocery stores. Thank you to the many individuals that contributed their
time, insights, and expertise to this report specifically, and thank you to those who will continue to shape
it in the future.

City of Madison Mayor’s Office

David J. Cieslewicz, Mayor
Jeanne Hoffman, Assistant to the Mayor

City of Madison Department of Planning & Development

Michael Gay
Joe Gromacki
Hickory Hurie
Don Marx
Brad Murphy
Katherine Naherny
Mark Olinger
Peggy Yessa

Other Contributors
Susan Hill, Northside Planning Council
Matthew Kures, UW Extension Community Economic Development
Bill Lanier, Madison Metropolitan Planning Organization
Todd McGrath, McGrath & Associates
Steve McKenzie, Jenifer St. Market
Lynn Pitman, Monroe St. Co-op
Jim Powell, Northside Planning Council
Brad Ricker, Monroe St. Co-op
Mary Rouse, Regent St. Co-op
Barbara Smith, Focus on Energy, Wisconsin Department of Administration
Tim Sobota, Metro Transit, City of Madison
Eric Stonebraker, Previous Intern, City of Madison

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Executive Summary
Guiding the decisions of food retailers- and providing support for them- in order to ensure equitable
access to food and promote livable, walkable neighborhoods is a difficult task faced by non-profit
organizations and local governments in cities across the nation. Since all people require food on a daily
basis and shop for it frequently, food retailers should be recognized as far more than simply another retail
establishment. However, even as many municipal governments realize this, there are limited ways for
cities to intervene in support for grocery stores when particular parcels of land are owned and controlled
in the private realm. Market forces and consumer behavior all too often work against the success and
proliferation of small grocery stores distributed equitably across the City.
We currently enjoy a diversity of food choices across our city, though some are far less accessible to
citizens without vehicles, or those living in neighborhoods without grocery stores. Recent closures across
the city have sparked significant concern and interest among citizens and City leaders. Ensuring
equitable access to food, promoting livable and walkable neighborhoods, and cultivating entrepreneurial
opportunities are important long-term objectives for the City of Madison to consider in the context of
preserving and supporting grocery stores across the city.
For the benefit of the Madison Neighborhood Grocery Store Advisory Group convened by the Mayor in
Summer 2003, this report has been prepared to provide a starting point from which the City of Madison
can work to preserve and encourage grocery stores as important components of healthy neighborhoods
across the city. After reviewing past city interventions with grocery stores and providing updates on
recently closed sites, the general goals and policy framework suggested in this report are as follows:

General Goals

1) Retain a diversity of food buying options and preserve maximum access to nutritious,
affordable, and culturally appropriate food choices for all Madison residents.

2) Encourage the development of small and medium sized grocery stores in developing and
re-developing neighborhoods to provide food-purchasing options within proximity to
residents in neighborhoods across the City of Madison.

3) Encourage food related entrepreneurial & employment opportunities that support one or
both of the above goals.

4) Support Madison-owned grocery stores to the extent possible.

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High-Priority Policies

1) Redevelopment Strategy: Where severe need for a grocery store is shown outside of
existing redevelopment districts, assessments of blight in the area may be undertaken to
determine whether or not the creation of a Redevelopment District is an appropriate way to
initiate City involvement.

2) Financial Assistance: As food retailers operate on an extremely tight margin, the City
should pursue ways to support food retail within the Capital Revolving Loan Program, Tax
Increment Financing, and other grants and loans.

3) Food Distribution: As small and independent grocers often face difficulties accessing
economical food distribution networks, the City should examine ways to support food
distribution networks that prioritize area food producers and local food retailers
simultaneously.

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Policy Framework
(Please see pp. 27-30 for more detailed discussion about the following suggestions)

Comprehensive Plan Process

Where possible, specific language should be included in the Comprehensive Plan to identify
grocery stores as important considerations for developing and redeveloping neighborhoods.

Land Use Regulation

During the review and negotiation process for Planned Unit Developments and mixed-use
development proposals within commercial zones, possibilities for including food retail should be
considered and analyzed (see page 4 for examples).

When possible, planning staff and property owners should initiate Shared Parking negotiations
between potential grocers and nearby businesses in order to minimize the need for new surface
parking.

Financial Assistance
While essentially operating in the same way, CDBG and the Capital Revolving Loan Program
could set-aside a percentage of their funds each year for food retail businesses, to ensure that
among all small businesses, applicants from food retail businesses providing entrepreneurial and
employment opportunities are identified and supported in Madison neighborhoods.

Within the Capital Revolving Loan Program, funds could be dedicated for equipment upgrades
and facade improvements for existing grocery stores.
When proposed TIF districts are reviewed, considerations should be made regarding grocery
store access and the need in and surrounding the proposed district.
Within existing TIF districts, where a grocery store would be appropriate, recruitment of and
financial assistance for grocery stores should be a priority.

Within existing TIF districts, where a grocery store (alone or within a mixed-use development)
would be appropriate, but lack of adequate parking prevents a major barrier, the financial
feasibility of providing support for parking infrastructure with Tax Increment should be assessed.

Through Neighborhood Planning Grant programs, neighborhood associations should be able to

gain financial support for administering market surveys to aide in recruitment of grocery stores
appropriate to serve neighborhood needs.
Further, City staff could perform outreach to encourage neighborhood groups to apply for grants
for this purpose.

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Real Estate Strategy
Within existing Redevelopment Districts, City staff may assess the need for neighborhood grocery
stores and the suitability of blighted parcels. If both inadequate food retail access and suitable
sites are discovered, discussions could be initiated with landowners and developers to determine
the feasibility of locating a grocer in the district.

Depending on the level of need for a grocery, and the suitability of parcels, municipal bonds and
or condemnation should be considered as methods by which the City can support improvements
on the blighted sites to attract grocery stores.
Where severe need for a grocery store is shown outside of existing redevelopment districts,
assessments of blight in the area may be undertaken to determine whether or not the creation of
a Redevelopment District is an appropriate way to initiate City involvement.

Market Analysis
The Department of Planning and Development should assess the need for upgrades of market
analysis software to more efficiently and accurately capture neighborhood food needs.
As market analyses for food retail are completed, procedures and findings can be shared and
utilized as educational tools for citizens

Other Options and Related Opportunities

Pursue funding for the creation of a Food Policy Council, possibly as a partnership with Dane
County
Support a focused campaign to inform citizens of existing Metro transit options to and from
grocery stores

Evaluate the transportation needs of senior citizens in Madison, and expand public transportation
options to grocery stores or support food delivery programs accordingly
Evaluate transportation needs in areas with a high concentration of residents without vehicles,
and provide more frequent and/or more direct public transportation routes to and from grocery
stores
Explore opportunities to work with and subsidize taxi companies to provide free or reduced rates
to full-service grocery stores for those that meet a particular set of criteria, such as participants in
the Women, Infants, and Children (WIC) program or food stamp recipients
The City’s Energy Task Force, MG&E, and the Neighborhood Grocery Store Advisory Group
could initiate a joint research effort to document current energy use in Madison’s grocery stores,
compile information on state and federal support programs supporting energy efficiency, and
distribute this information to business owners

Provide support for the Centralized Agriculture and Food Facility (CAFF) project as a means to
support area farmers and scale up the distribution of fresh and local foods to grocery stores of all
sizes, foodservice institutions, and restaurants

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Introduction
Guiding the decisions of food retailers- and providing support for them- in order to ensure equitable
access to food and promote livable, walkable neighborhoods is a difficult task faced by non-profit
organizations and local governments in cities across the nation. Tight profit margins in the food retail
industry make it difficult for businesses to survive without efficient distribution networks and large stores,
which are often seen as challenging to locate in established urban neighborhoods. This leads to several
trends, included but not limited to the following:
Large, full-service supermarkets have tended to move to the urban periphery, where less
expensive parcels of land become big box retail spaces and surface parking lots. The average
supermarket size is 54,000 square feet (Pothukuchi, 2004).
Small neighborhood grocery stores with high quality or specialty foods often struggle, but tend to
persist in middle to high-income areas where consumer dollars provide sufficient revenue to pay
the high rent.
In low-income urban neighborhoods, there are few full-service grocery stores, and convenience
stores offering foods of lower quality and less nutritional value (often at higher prices) are
frequently the most viable options for those without access to a vehicle.
Since all people require food on a daily basis and shop for it frequently, food retailers should be
recognized as far more than simply another retail establishment. However, even as many municipal
governments realize this, there are limited ways for cities to intervene in support for grocery stores when
particular parcels of land are owned and controlled in the private realm. Market forces and consumer
behavior all too often work against the success and proliferation of small grocery stores distributed
equitably across the City.
Though Madison is not a city plagued by vast “food deserts” (large areas of primarily low-income
residents without access to grocery stores), recent closures across the city have sparked significant
concern and interest among citizens and City leaders. Ensuring equitable access to food, promoting
livable and walkable neighborhoods, and cultivating entrepreneurial opportunities are important long-term
objectives for the City of Madison to consider in the context of preserving and supporting grocery stores
across the city. How might the City of Madison take a proactive, policy-oriented approach to maintain and
encourage grocery stores in city neighborhoods?

For the benefit of the Madison Neighborhood Grocery Store Advisory Group convened by the Mayor in
Summer 2003, this report has been prepared to provide a starting point from which the City of Madison
can work to preserve and encourage grocery stores as important components of healthy neighborhoods
across the city.

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Food Retail as a Public Issue
Is food retail an issue that should be included in the public agenda? Doesn’t the free market dictate the
most efficient number and ideal locations of food retailers across U.S. cities? Why should a city pay
specific attention to grocery stores, and what policy tools might be used to support small neighborhood
food retailers in the face of widespread trends of corporate consolidation, super-sized stores, and one-
stop shopping? In cities across the U.S., there are a variety of ways to “frame” food retail as an issue in
the public domain. Following are three ways in which food retail might be framed and addressed in the
City of Madison, WI: access to food choices, livable and walkable neighborhoods, and support for
entrepreneurship. It is important to note that while they are integrally related, pursuit of each of these
goals might require a unique combination of strategies.
Access to Food Choices
Getting to the Grocery
First, and perhaps most importantly, the importance of
Importantly, the Madison Metro Public
access to healthy affordable food for all citizens in Madison Transit “Ride Guide” includes routes to 20
must be considered (see Bolen and Hecht, 2003.) area grocery stores among popular
Regardless of age, income level, or location, every person destinations, and has an arrangement with at
least one grocer to drop-off and pickup
needs to purchase or otherwise obtain food on a regular customers right at the door. Yet if a
basis. With a quick trip to a grocery, (or increasingly, a giant customer is making a trip other than a small
errand (for instance- to stock up on food for a
super center), many U.S. citizens have easy, consistent
large family) one can imagine the time and
access to affordable, colorfully packaged, fresh and difficulty in planning and executing the trip,
processed food products sourced from around the world. In especially if young children are involved.
Madison, the majority of consumers relying on automobiles Understandably, grocery carts are often left
to make trips to a grocery may not consider the location of at bus stops and transfer stations (see
grocery stores a critical place for public concern, since a photo). One grocer on Madison’s East side
reportedly collects grocery carts daily at the
short drive can get them to a wide variety of stores in the nearby East Transfer Point Bus Station,
region. However, the location of stores certainly affects the where customers relying on buses have had
ability of those without automobiles (typically low-income and to wheel their goods before getting back on
the bus (Sobota, 2/04).
elderly citizens) to make a trip to the grocery of their choice
feasible. As Madison’s elderly population continues to
increase, this will become more and more important.

In a process that began decades ago, many food retailers

have left urban neighborhoods for larger tracts of suburban
land. This occurred (and continues to occur) for two primary
reasons. First- food retailers simply follow customer dollars
as suburbs grow, and second- undeveloped tracts of
suburban land offer the space perceived as necessary for
adequate square footage and parking. With costs and
revenues spread throughout multi-state regions or even
internationally, it is not at all rare for corporate grocery store chains to close less profitable stores and
focus operation in higher profit areas. For independent stores facing low profit margins and difficulty
accessing an economical food distribution system, closure may be imminent without assistance.
Many residents must rely on public transportation or taxis to take them from underserved neighborhoods
to a store with an adequate choice of affordable food. If long bus trips or expensive taxi rides are too
inconvenient, many rely largely on corner convenience stores, which offer a much narrower range of (and

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often less nutritious) food products at higher prices than full-service supermarkets. Recent closures of
grocery stores- and the concerted efforts of neighborhood residents to do something about it- have
significantly raised the importance of the issue of access to food choices in Madison.

In large cities across the U.S. such as Detroit, Los Angeles, and Philadelphia, statistical patterns and
maps have shown significantly fewer supermarkets in areas with a high percentage of low-income and
minority residents (Shaffer, 2002; UEPI, 2002; The Food Trust, 2003). Though such obvious “gaps” may
not be as evident in Madison, similar patterns do exist, and can be clearly seen when looking grocery
store locations and car ownership. The two recently closed Kohl’s Food Emporiums depicted by blue
squares on the map below are immediately surrounded by census blocks with large numbers of
households without cars. While a very large grocery store exists between the two sites, it is unlikely that
former patrons of either of the closed grocery stores can feasibly walk the extra distance to this store.

Madison’s downtown center and the UW Campus are also worth noticing. The census blocks nearest
them contain hundreds (even thousands) of households without cars, and yet the area completely lacks a
large grocery store. If large grocers were to locate in these areas, students and downtown area residents
would benefit greatly from an additional walkable option. Further, residents across the entire city that rely
on bus transportation for grocery shopping or commuting to work would have a convenient option near
the most frequent and consistently used transit nodes in the City- UW Campus and the Capitol Square.

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Livable and Walkable Neighborhoods
As Madison continues to develop and redevelop, small and medium-sized grocery stores hold enormous
potential as components of livable and walkable neighborhoods. Proximity of food retailers to residents
can drastically reduce the number of vehicle trips used to fill the kitchens of Madison households.
Certainly, many car-owners will still drive to grocery stores, and until major changes occur in U.S.
lifestyles and landscapes, the provision of parking spaces for grocery stores is still important in order for
them to remain economically viable. However, as full service grocery stores exist within walking distance
of residential or mixed-use neighborhoods, frequent walking or biking trips are a far more viable option
than the auto-dependent weekly stock-up. Further, the “human scale” associated with small and medium-
sized grocers is well worth preserving. Whereas small grocery stores used to be popular community
gathering spaces, typical big-box supermarkets are generally quite the opposite- largely devoid of
interaction in the long bright aisles and sea of parking spaces that surround them.
Over the past few decades, the market
and particular zoning codes have Reducing energy use in grocery stores
worked against these goals. Most food Beyond the way they affect energy use in the form of customer
retailers- whether independent or vehicle trips, grocery stores themselves have a high metabolism.
corporate owned, demand very large The use of energy for lights, appliances, air conditioning, and
refrigeration (which alone accounts for 38% of the energy used in
parking lots to accommodate grocery stores!) pose enormous costs for stores of all sizes.
consumers driving to their stores from a Federal and state programs to encourage energy efficiency may
broad region. Parking requirements are help to significantly reduce long term energy costs for stores,
eventually leading to higher profit margins. In fact, a small family
also enforced by zoning codes that set owned grocery store in Sacramento has saved an estimated
a minimum number of stalls per square $22,000 after installing new lighting, refrigeration, and air
foot of retail space. Thus, it is often conditioning equipment with assistance from the local utility district
(Energy Star, 2003).
difficult from a business perspective to
work with small tracts of urban land and Within its information for small businesses, the EPA’s Energy Star
Program has dedicated a category for grocery & convenience
make the neighborhood grocery store
stores, which can be accessed on-line at:
“work”. Further, even if parking was not http://www.energystar.gov/index.cfm?c=grocery.sb_grocery
a significant issue and large grocery
Recognizing the unique fiscal challenges and energy needs of
stores did exist within primarily
food retailers, Wisconsin’s Focus on Energy Program has also
residential neighborhoods, early developed a special effort focused on supporting grocery stores
morning noise from delivery trucks including technical and financial assistance for monitoring energy
use and the installation of new equipment. Extensive information
might pose significant problems. For on the program can be found on-line at:
this reason and others, commercial and http://www.focusonenergy.com/page.jsp?pageId=1183
industrial land uses have historically
been separated from residential areas by zoning codes. However, trends are changing as citizens,
planners, and municipal leaders across the nation recognize the benefits of livable, walkable
neighborhoods that include a variety of residential, employment, and retail amenities existing at a human
scale.
In dense, mixed-use neighborhoods, residents have increased transportation options that reduce the
need for vehicles. In mixed-use developments that include grocery stores along with residential and/or
office spaces, investments in below or above ground parking may be far more economically viable (see
next page). Smaller full service food retailers can survive in these neighborhoods, and well-designed
receiving docks can minimize noise from food delivery trucks. Developers, entrepreneurs, and grocery
store chains are recognizing the true potential of dense, mixed use neighborhoods in areas underserved
by grocery stores. How might the City of Madison encourage this trend?

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Livable Neighborhoods: Grocery Stores Within Mixed-Use Developments
To fit into redeveloping urban neighborhoods without needing swaths of surface parking, many food
retailers are finding success by locating in mixed-use developments in city centers or other areas
surrounded by medium-to-high density residential use. Public-private partnerships to encourage grocery
stores within attractive mixed-use developments might be an important strategy to consider both
downtown and in Madison’s neighborhoods. Following are four examples of such stores in the Pacific
Northwest ranging in size from 15,000 to 50,000 square feet.
Portland, Oregon

Wtih approximately 20,000 square feet of retail space,

Zupan’s Market anchors the retail portion of the mixed-use
and mixed-income retail/residential Belmont Dairy Project on
Portland, Oregon’s East Side (shown at right). The project
has been recognized nationally for its excellence as a model
of urban infill and mixed-use development.

In the rapidly densifying inner NW area of Portland, a 50,000

square foot Whole Foods Market utilizes two floors below office
spaces within a mixed-use redevelopment project. The City of
Portland helped to finance underground parking for the project.
Subsequently, a Safeway Foods has opened within a similar
project downtown, which includes both rental and owner-
occupied housing. Importantly, each of these stores is
accessible by car, bus, rail, bike, or foot.

Seattle, Washington

Puget Consumer’s Co-op, a regional natural food co-operative

with 7 stores, recently became the anchor retail tenant in a
mixed-use commercial/ residential development in Seattle’s
Fremont neighborhood. Underground parking is available on-
site, and 4 bus routes provide access to the store.

At 16th Avenue and East Madison Street, this mixed-use

development- smaller than those mentioned before- may be a
more appropriate prototype for some of Madison’s
neighborhoods beyond downtown. “Madison Crossing” (shown
at left) includes 24 residential units, a 15,000 square foot
grocery, and a second level shared parking garage.

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Food-related Entrepreneurial Opportunities
By encouraging entrepreneurial efforts related to food retail and food distribution, the City of Madison can
indirectly support the first two goals. Almost by nature, entrepreneurial businesses begin on a small scale
and are thus able to fit in seamlessly within existing neighborhoods and provide diverse food purchasing
options for residents across the city.

Small and medium-sized stores provide important opportunities for entry-level workers and
entrepreneurial small business owners within their own neighborhoods. They can provide important
entry-level or management-level job opportunities accessible by people of a wide variety of ages and
backgrounds.
Madison’s growing cultural diversity demands increased access to appropriate and familiar foods. Small
entrepreneurial grocers may be better able to serve the specific food needs of their neighbors, and
respond quickly to changing demands.
Finally, grocery stores typically serve as important community spaces and “anchor businesses” to help to
catalyze further economic development in neighborhoods. (This trend is certainly recognized and
replicated beyond urban neighborhoods, as strips of small businesses line up alongside grocery stores in
suburban strip malls across the country.) A local neighborhood example of this tendency was shown
when the Regent St. Co-op briefly closed its doors in 1998. According to a member of the Co-op’s Board,
businesses adjacent to the grocery suffered significantly during those months, and were quite supportive
of the reopening of the Co-op.

Madison’s Locally Owned Food Retailers

* To be completed with input from Neighborhood Grocery Store Advisory Group*

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Overview of food retail industry trends
Trends in Consumer Purchasing Habits
Consumer habits simultaneously depend on and dictate decisions by food retailers. First- people in the
U.S. expect cheap food. Supported by tremendous federal subsidies for oil, water, and large-scale
agricultural production, U.S. citizens pay far less for food compared to income levels than consumers
elsewhere. Without even realizing it, many of us pay only a small portion of the true cost to produce,
process, package, store, transport, and refrigerate the vast majority of foods. Further, most consumers in
the U.S. are accustomed to the option of convenient one-stop shopping at supermarkets for a weekly
stock-up. According to a 2002 survey, shoppers spend an average of 47 minutes per trip inside the
grocery store, where most have access to a wide variety of food and non-food household items.
However, evidence suggests that consumers will take more time to seek out value (which could mean
lower prices or higher quality), and 60% make ”fill-in” trips for less than 10 items on a weekly basis
(Supermarket Guru, 2002). Instead of relying solely on a particular supermarket, the average shopper
shops at 2.2 stores each week for food (Supermarket Guru, 2002). Thus, typical supermarkets are
seeing increased competition from warehouse stores, natural food stores, and others.
Food Retailing Trends: Consolidation & Standardization
Operating with razor-thin profit margins, Madison area food retail history
food retailing has quickly become more
Data obtained for Dane County shows that between 1977 and 2001,
and more consolidated over the past the number of establishments defined as food retailers (including
few decades. A handful of corporations supermarkets, small grocers, specialty food stores, and convenience
stores) actually decreased from 228 to 209. The graph below shows
now operate the vast majority of the
this trend in relation to the County population.
food retail market, and stores are
super-sized at a national average of
54,000 square feet (Pothukuchi, 2004). Food Retail Establishments per 10,000 Residents,
In order to survive as a business, food Dane County, 1977-2001
8
# Est. per 10,000 Residents

retailers feel the pressure to get big,

7
stocking their shelves with a wide 6
variety of foods and a combination of 5
other products to fulfill consumer food 4
needs in one trip. 3
2
It should come as no surprise that the 1
largest food retailer in the U.S. is Wal- 0
1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

Mart, which only began its food retail

super-centers in the mid-1990’s.
Source: US Economic Census County Business Patterns
Though not yet present in the Madison
area, the presence of Wal-Mart A closer look at the data shows that area food retailers have become
Supercenters puts extreme pressure on larger over time. In 1977, only 9 food retail establishments in the
county employed over 50 people, while in 2001, 30 such
food retailers of all sizes to either find establishments existed. This is certainly in line with nationwide
niche markets or reduce labor costs trends of consolidation in the food retail sector, though it tells us very
and prices in order to remain in little about where stores are located with respect to city residents.
business.

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To increase shopping convenience, food retailers have diversified their product lines to include more non-
food items, yet at the same time, more and more food items are appearing on shelves at pharmacies and
department stores, increasing competition, increasing competition to an even greater extent.
Analogous to the trend in consolidation, food retailers have standardized store layouts, equipment, shelf
patterns, and product offerings to make the distribution and stocking of products more efficient. Thus,
food retailers often insist on a very specific store size and parking lot size in order to locate in a given
area. This presents significant problems for developed urban neighborhoods, where large lot sizes may
not be available, and truckloads of food may not be perceived as appropriate within the existing
neighborhood framework.
Food Distribution
Closely tied to the food retail industry is the entire food
distribution system on which retailers depend to ensure a
consistent flow of products to keep shelves full. Not only is it
important to consider the neighborhood effects of food
distribution (early morning trucks, receiving docks, etc.), but also
the implications of food distribution systems on the success of
stores themselves. The scale of food distribution networks is a
critical part of the decision-making process regarding size,
location, and pricing for food retail businesses.
As depicted in the photo at right, food retail chains with sufficient capital, such as Whole Foods, often own
and control their own regional shipping and distribution systems to cut down on profit loss, and
consequently may have less flexibility in the location and size of stores that “fit” within their established
distribution system. Woodman’s has a similar advantage in that they incorporate warehouses into their
stores for increased storage space.
On the other hand, small, independently-operated stores dealing with lower volumes of product
experience difficulty tapping into the mainstream food distribution system, and often must purchase and
sell things at higher rates than corporate chains. Thus, the issue of access to grocery stores by people is
paralleled at the next level, when independently-owned stores cannot “access” food distribution systems.

Central Agriculture and Food Facility (“CAFF”): missing piece of the local food puzzle?
In a city where locally produced food is visible in vibrant farmers’ markets, as well as a growing number of restaurants
and grocery stores, the vast majority of institutional food service establishments still serve fresh produce and other
foods originating on farms across the country or beyond the U.S. Has the time come to make fresh, nutritious, and
locally produced foods more widely available?
Envisioned by area farmers, University groups, and non-profit organizations initiatives, the feasibility for a “CAFF” is
currently being studied. Ideas for the bricks and mortar facility include storage space for locally produced foods, a
commercial kitchen, capacity for small-scale food processing, permanent space for an indoor winter farmers’ market,
and office space for area non-profit organizations.
Ideally, such a facility could greatly increase market opportunities for existing and new
local farmers while providing a smaller scale food distribution network to cater to area grocery
stores, restaurants, and institutions such as public schools, hospitals, government buildings,
and the University. It could catalyze an increased flow of nutritious foods to Madison eaters
while increasing the profitability and diversity of area farms.
Importantly, it could provide a new food distribution mechanism for area grocery stores, and
meaningful employment opportunities related to product development, marketing, and
distribution. Though in very early stages, the project has gained significant attention from
City staff and others who recognize it as a missing piece of the local food puzzle.
(For more insight on food retailing and local foods, see Guptill & Wilkins, 2002.)
Artwork by Mark Harmon
Draft - 5/14/04 15
Efforts by Other Cities to Attract Grocery Stores
Large Cities
Larger cities across the U.S. have experienced gaps in food retailing that especially affect low income
and inner city neighborhoods. Coordinated responses from local community development corporations,
organized citizens, entrepreneurs, and in some cases, city governments have made positive changes in
many cities, but the strong tides of the food retail industry are hard to turn. Examples of city government
actions to attract and preserve food retailers in underserved areas are as follows:
• Dallas, TX and Rochester, NY After little success encouraging leading area food retailers to add
new stores, these city governments compiled incentives to encourage outside chains to locate not
one, but a package of five stores within each city. Incentives included proposed sites, tax
abatements, and a reduction of permitting fees (Ferguson and Abell, 1998).
• Baltimore, MD A partnership between the Baltimore Dept. of Housing & Community
Development, the Baltimore Development Corporation, the State of Maryland, and Save-A-Lot
Foods brought a Save-A-Lot store to West Baltimore to fulfill a need for a supermarket and jobs
for residents. A press release in June 2001 stated that 6 more locations in Baltimore were “on
the drawing board” (Brown, 2001).
• Los Angeles In Los Angeles County, the “gap” in grocery store accessibility between low-
income and other communities has persisted over time. A 2002 study comparing the number of
supermarkets in various zip codes found that in areas where only 10-20% of the households earn
less than the $35,000/yr, there are over 3 times as many supermarkets as in those where 60-70%
of the households earn less than $35,000/yr. The city has not yet taken a proactive stance
towards grocery stores, but recommendations within a report prepared by the Urban and
Environmental Policy Institute call for the following: a City-wide ordinance on supermarket access
in low-income communities, city assistance with land identification, environmental remediation,
market feasibility studies, tax breaks, and other incentives to encourage grocery stores (Shaffer,
2002).

Peer Cities
Review of on-line documents and/or telephone calls to planning and community development
departments in a handful of Madison’s peer cities1 revealed that while grocery stores have been
recognized as unique and valuable pieces of the neighborhood fabric, proactive policy measures to
specifically encourage neighborhood grocery stores are rare. Of course, the way issues are framed and
addressed across cities varies tremendously. The following examples provide only a glimpse at how peer
cities have been involved in similar efforts. Further research may be necessary to find models relevant to
Madison, and yet even if such examples are difficult to find, Madison could certainly become a leader in
taking proactive policy measures to support a diversity of food purchasing options.
• Lansing, MI A Project Coordinator with the Lansing, Michigan Economic Development
Corporation reported that the city tried to encourage neighborhood grocery stores in 1998 by
paying for an economic analysis, but nothing resulted from it. Currently, access to a variety of
grocery stores in Lansing is sufficient, as most residents have automobiles or access to public
transportation lines.

1
i.e. Lincoln, NE; Lansing, MI; Portland, OR; Sacramento, CA; Des Moines, IA; Austin, TX; St. Paul, MN

Draft - 5/14/04 16
 • St. Paul, MN In St. Paul, Minnesota, planners are involved in site-by site negotiations and
plans involving groceries, yet no formal plans, policies, or incentives are in place with regard to
food retail in the city. Perceived needs for parking have presented significant difficulties. For
instance, in order to locate a 60,000 square foot store in the city, Cub Foods required 5 acres of
parking and was unwilling to negotiate shared parking arrangements- nearly an impossible
request in a built-out city such as St. Paul. The city is currently involved in a unique project to
redevelop a contaminated industrial site, and plans include a medium-sized Super Saver store
with adequate- not excess- space for parking. Finally, entrepreneurial Asian-owned food stores
(10,000-15,000 square feet) have “boomed” recently, and play an important role in the St. Paul
food retail landscape. In a unique East side store, the current owner took over when a national
chain went out of business, and currently stocks culturally appropriate foods for ethnically diverse
area residents, including those of Asian, Hispanic, and Irish descent.
• Portland, OR The City of Portland is one exception to the otherwise reactive stance most city
governments take with regard to grocery stores and other food-related issues. With staffing
resources from the City of Portland’s Office of Sustainable Development, Multnomah County’s
Dept. of Health and Dept. of Business & Community Services, a Food Policy Council created in
the Spring of 2002 began to take a comprehensive look at food issues as they relate to hunger,
diet-related illness, and supporting local agriculture. In its October 2003 report, one of 6 major
goals expressed was to develop community-based solutions for areas with inadequate food
access, (whether the need be for a full service grocery store, a community garden, or a farmers’
market). When possible, the policies suggested by the Food Policy Council make linkages
between regional agricultural production and ensuring access to food for area residents (City of
Portland Office of Sustainable Development, 2003).

• Austin, TX With a focus on getting people to grocery stores as an interim solution to a lack
of grocery stores in low-income neighborhoods, the Austin Food Policy Council, no longer in
existence, worked with the Austin Transit Authority to create more frequent circulation routes
between public housing developments, low-income neighborhoods, and supermarkets.

Draft - 5/14/04 17
The Diversity of Existing Food Retailers in Madison
Despite the prevailing currents of corporate consolidation, large-scale food distribution, and consumer
desires for convenient one-stop shopping, a substantial diversity of food retail businesses remains
successful in Madison. It is important to appreciate the various sizes, ownership structures, and
specialties among grocers that can and will continue to thrive in Madison, serving different consumer
needs and providing access to a variety of food and employment opportunities throughout the city. Each
must work within the prevailing global trends and maintain a dedicated customer base to exist. Following
are five examples chosen simply to illustrate this diversity.

Large Supermarkets: Woodman’s Food Stores, 3817 Milwaukee St. & 725 S. Gammon Rd.
With large stores on Madison’s East and West sides,
Janesville, WI-based Woodman’s is an employee-owned
cooperative with nearly 410,000 square feet of combined
space between the two stores. With its own on-site
warehouses, Woodman’s has the capacity to purchase
extremely large quantities of food and other products from
a variety of distributors and offer customers a variety of
affordable products. Located on the east and west sides
on very large parcels of land (total lot sizes are 13.6 and
17.2 acres, respectively), Woodman’s is a regional store
and does not consider neighborhood grocery stores as
competition. Rather, Woodman’s caters to customers across
and beyond Dane County who stock up on products for the
week, or even the month.

Aside from offering a wide variety of affordable foods,

Woodman’s is an important employer in Madison. Its 500-
600 employees, 35% of whom are minorities, earn $14/hr on
average. All employees begin earning $8.75-$9.00/hr plus
health insurance, with significant opportunities for
advancement within the company and access to stock
options after three years.
Copps Food Stores

One of the major food retail chains with stores in Madison,

Copps Food Stores currently have four locations in
Madison with 267 full-time and 341 part-time employees.
Copps offers a wide array of food choices in their medium-
to-large stores. Three of the sites have between 50,000
and 70,000 square feet of retail space, while the fourth is
smaller at just over 25,000 square feet (see right).
Roundy’s Corporation, which owns and operates Copps,
recently purchased three Kohls Food Emporiums in
Madison as they went out of business. The corporation
then closed the sites on East Washington Avenue and North Sherman Avenue (see pp. 22-24.)

Draft - 5/14/04 18
Small Groceries: Jenifer Street Market, 2038 Jenifer St.
In a near-East side neighborhood, the independently-
owned Jenifer Street Market comprises just under 10,000
square feet of retail space on a half-acre parcel of land
owned by the adjacent Schoep’s Ice Creamery. As one of
Madison’s key supermarkets over fifty years ago, it has
been owned and operated by Steve McKenzie since 1979.
Despite its small size, Jenifer Street Market offers a wide
variety of both organic and conventional products,
including fresh produce, prepared foods, high quality
meats, alcoholic beverages, and household products.

With a customer base dedicated to fulfilling their weekly

(even daily) shopping needs at the Market, costs for rent, building maintenance, and staffing needs are
covered. McKenzie feels that people support the business for several reasons; it is close to home, they
do not like Big Box retailers, and they identify the store as “theirs”. Support for the market is working,
even against major trends in food retailing. In fact, Jenifer St. Market is the only full service grocery store
in Madison not located on a high-traffic street.

Regent Street Food Cooperative: 2136 Regent St.

A prime example of a very small neighborhood grocery
store, the Regent Market Co-op has been a neighborhood
grocery store since 1924, with the exception of a few
months in 1998. The tiny store provides an impressive
array of food choices- organic and conventional foods, as
well as in-house custom butchering- to residents on the
near West side of Madison. With only approximately 1,400
square feet of space, the store had approximately $1.2 M
in sales in 2003. With a mission to serve neighborhood
needs, the Co-op also provides food delivery service to
neighborhood residents that are unable to walk to the store.

With 20 employees (5 full-time), the Co-op provides great employment opportunities for area teens and
others, though the Board wishes it could provide a stronger compensation package. Even with a
relatively low rent, the small store struggles financially due to competition from larger supermarkets and
difficulty accessing food distribution networks. However, with involvement and oversight from its board of
directors, as well as 1000 member-owners and volunteers, the Co-op has remained a vital tenant in this
near West neighborhood. As long as neighbors who value the ability to purchase foods nearby commit to
keeping the store viable, it will surely continue.
According to a Co-op Board Member, Regent St. is very thankful for the supportive relationships it has
cultivated with other food cooperatives in Madison, as well as recent loans from MG&E and individual
members to replace old equipment with energy efficient appliances. Since it operates with such tight
profit margin, the Regent St. Co-op could use financial assistance for capital investments such as facade
improvement and building purchase, should the current owner ever decide to sell the property.

Draft - 5/14/04 19
Ethnic Food Stores: Yue Wah Oriental Foods, 2328 S. Park St.
Madison is the home of a wide variety of ethnic specialty
food stores featuring, Italian, Mexican, and Asian foods.
With an impressive array of Asian and Hispanic foods, Yue
Wah Oriental Foods in the Villager Mall on South Park
Street includes a produce counter, seafood, and nearly
every spice, paste, and grain imaginable within its 6,000
square ft.
space. Its
location in
Villager Mall is
advantageous
to area shoppers, as it is adjacent to many other neighborhood
amenities such as Harrambee health and family center, a
Madison public library, and a few other small retail stores.

Draft - 5/14/04 20
Other Food Purchasing Opportunities

Of course, Madison residents have many other

opportunities to purchase food besides those
described above which were included simply to
illustrate the diversity of existing retailers. Each
retailer has a unique ownership and employment
structure, and faces particular market circumstances
due to its location, size, product offerings, and
customer base.

Among the variety of remaining stores (some depicted

in photos at right) are Whole Foods Market on the
near West side, two other member owned food
cooperatives, a wide variety of ethnic and specialty
food stores, and a plethora of gas stations and
pharmacies doubling as convenience/food stores.

In addition, the very successful farmers’ markets in

Madison provide ample opportunity for city residents to
purchase foods at affordable prices directly from area
producers. With locations on the Capitol Square, near
East side, near West side, and South side, Madison’s
weekly farmers’ markets offer an array of locally
produced nutritious foods while in season.

The bottom line is that a diversity of food retailers is

successfully co-existing in Madison. Ideally, this
diversity will be maintained and enhanced so that
residents of all income levels in neighborhoods across
the City will have maximum opportunities to choose
among various transportation options and ultimately
have access to nutritious, affordable, and culturally
appropriate food choices.

Draft - 5/14/04 21
Historical city intervention with food retail
Though public intervention in the private food retail sector may not be recognized, subsequent examples
demonstrate the public assistance provided to food retailers in the past. Considering this history,
opportunities for the City to reaffirm its commitment to grocery stores may become more evident.
Land Acquisition: Capitol Centre Foods, 111 N. Broom St.
As the largest full-service grocery store in Madison’s
downtown, Capitol City Foods is easily accessible to UW-
students, downtown residents, and especially the elderly
residents living in the adjacent subsidized housing
development. Before the store existed, the site was part of a
7.3 acre publicly owned site slated by the city for mixed-use
development including housing for the elderly, market rate
housing, commercial property, a parking facility, and the
Madison Senior Center. In 1981, the City transferred 2.65
acres of the property to the CDA and on to a private developer, Capitol Centre Housing Partners, who
agreed to include 150 market rate residential units, 200 elderly housing units, and the 25,000 sq. ft
commercial space for the supermarket in a $20.7 M development. In July 1981, a $2.5M federal grant
was obtained by the City and awarded to Capitol Centre Housing Partners as a 42-year loan to assist with
project expenses.
Land Acquisition: Asian Midway Foods, 301 S. Park St.
As one of several ethnic specialty stores in Madison, the
7,000 square ft. Asian Midway Foods is part of a larger
mixed use project in the “Triangle area”, including townhouse
apartments, high-rise apartments, and the store space. All
were constructed in the late 1970’s when urban
redevelopment swept the country and drastically changed
the Triangle area. One important component of the Triangle
area plan was the requirement that a grocery store remain in
the neighborhood. The first grocer to lease the space from
the City of Madison’s Community Development Authority
(CDA) stocked the store with a traditional line of products,
similar to other groceries, and left in the early 1980’s due to
lack of success.
Asian Midway owners Mr. & Mrs. Peter Chow agreed to
lease the space from the City of Madison in 1983, and it then
became Asian Midway Foods, which stocks a portion of
traditional grocery items on top of Asian specialty foods. The
CDA still owns the land, and is able to continue to provide an affordable lease to the owners. The store
serves not only neighborhood clientele, but also provides a large Asian specialty store to serve the
Madison region.

Draft - 5/14/04 22
Loan for Expansion: Willy Street Co-op. 1221 Williamson St.

In May of 1998, the Willy St. Co-op received a

$200,000 loan from Madison Development Corporation
(MDC), which is capitalized by the City of Madison’s
Community Development Block Grant Program. The
loan, which was paid back by 2002, assisted in
relocating the business to its current location, the fourth
location the co-op has occupied along Williamson St.
This allowed for significant expansion to its current size
of 20,000 square feet (9,500 square feet of retail
space)2

With over 10,000 member-owners and over 115

employees in 2004, the Willy Street Co-op is not only one of the most successful food cooperatives in the
U.S., but acts as an important anchor amidst other small businesses in the east-side neighborhood. The
co-op donates a portion of its profits to the community, and offers a living wage and healthcare benefits to
employees. Further, Co-op staff members have provided significant time and technical assistance to
other area food cooperatives. Finally, the co-op supports the area agricultural economy by featuring
products from small local farmers when possible and providing organizational oversight for a weekly
farmers’ market on the near East side of Madison.

2
http://www.willystreet.coop/About/history.html

Draft - 5/14/04 23
Updates on Recently Closed Sites
Kohl’s Food Emporium: 2525 East Washington Avenue
The vacant Kohl’s site at 2525 East Washington Ave., now owned by developer McGrath Associates of
Madison, is destined for replacement by a new full service grocery store within the next few years.
McGrath Associates purchased the Kohl’s site along with the
large adjacent Rayovac site and others, and are one year into
the planning process for the 12 acre Union Corners
Redevelopment Project. Forecasted for construction from
2005-2008, the mixed-use redevelopment may include as
many as 300-400 residential units and approximately 100,000
square feet of commercial space. The existing 23,700 sq. ft.
Kohl’s building will be removed, and much of the surface
parking on and around the site will be replaced with mixed
income housing and mixed-use development.

Residents’ strong desire and need for a grocery store has

been heard from the beginning of a series of neighborhood meetings held to discuss the project (City of
Madison Dept. of Planning and Development, 2004). Todd McGrath claims that the need for a grocery is
one issue that has reached consensus among residents. McGrath anticipates no difficulties in recruiting
a grocer, and has already been contacted by a handful of businesses (including the Willy St. Coop)
interested in locating a new store within the site.

The exact size and particular type of store remain undecided, though the store will likely have between
10,000 and 25,000 feet of retail space. Ideally, McGrath would like to see a store no smaller than 15,000
square feet to serve as the retail anchor for the site, yet with a small enough footprint to allow for
ambitious mixed-use design on the property as a whole. Citizen input on the store has varied. Some
strongly support the idea of a grocery cooperative, while others feel it may not be the right match.
He envisions that the grocery would be supported primarily by the residents in the new residential
development and adjacent neighborhoods, but also by those driving along East Washington Avenue to
and from downtown. One advantage in the recruitment of a grocer for Union Corners is that the high-
density, pedestrian-friendly nature of the proposed development will likely reduce the need for surface
parking. That said, McGrath plans to cover much of the surface parking within the development with a
green roof, which will greatly reduce the storm water run-off typically associated with parking lots.
McGrath Associates is currently working with City of Madison planners and traffic engineers, and others
to determine vehicular access to the site, while also encouraging the City to create a Redevelopment
District and Tax Incremental Financing (TIF) District to facilitate project implementation. All indications
are that the district will gain City staff approval as a TIF district, but as of spring 2004, this remains
unknown.

Draft - 5/14/04 24
Kohl’s Food Emporium, Sherman Plaza: 2921 N. Sherman Ave.
Approximately one year after the closure of Kohl's Food
Emporium in Sherman Plaza left a food retail gap in
Madison's diverse north side neighborhoods, residents
coming together in support of a new grocery store do not
face a positive market situation with regard to recruiting
a new occupant.
In order to renovate Sherman Plaza in 2000, its owners
signed a 20-year lease with Kohl’s (which is now owned
by Roundy’s) with what has proved to be a very high
rent. The high occupancy cost helped the owner secure
a large loan to renovate the shopping center, but has
proved to be a major hurdle in attracting another grocery store for the site.
Though Roundy's Inc. CEO Robert Mariano has verbally expressed his support for allowing another
grocer to take over the remainder of the lease, this would require the site's owners to refinance the
mortgage for the site. For now, as residents food needs are underserved, the 44,000 square foot space
with a newly renovated facade stands vacant and
surrounded by underutilized surface parking. However,
high occupancy in the remaining space at Sherman
Plaza attracts good business, as this shopping center
remains the “downtown of the Northside”

Pressure from residents, city staff, and the Mayor has

not yet produced a solution to this complicated problem,
and citizens are taking the matter into their own hands.
With technical assistance from the Northside Planning
Council (NPC), the Williamson St. Grocery Co-op, and
many volunteer hours, area residents have formed the Northside residents rally to bring back a community grocery
store on July 29, 2003. NPC member Susan Hill talks with
Northside Community Co-op in order to create a Madison Mayor Dave Cieslewicz about his just-concluded
meeting with Roundy's Inc. CEO Robert Mariano.
member-owned grocery cooperative to fulfill Photo by Abha Thakkar/ Northside News
neighborhood food needs. At a March 21st, 2004
meeting attended by approximately 100 people, the seven-member steering committee garnered support
from 57 citizens intending to buy a full $200 share and/or loan money for a total pledge of $24,000.

A crucial point made at the meeting was that in the case of a member-owned cooperative, a store cannot
simply close or move away at the whim of market forces, in contrast to the way Roundy’s decisions and
the situation with the vacant site have affected the neighborhood. When governed by member-owners, a
store can be stocked with a wide variety of products to serve area food needs, and remain in business as
long as residents continue to support it.

The cooperative is not tied to a particular location at this time, but once feasibility for the store is
determined, a site of at least 10,000 square feet will likely be sought. A plea for support (memberships,
loans and volunteer hours) has been made in the April/May issue of the Northside News, resulting in
more pledges. In addition, a partnership of interested groups has applied for a $95,000 USDA grant to

Draft - 5/14/04 25
help the Northside Community Co-op conduct a feasibility study and market analysis, create a business
plan, locate a site and needed capital and retain operations management.
NPC members and volunteers are undertaking a "food
basket study" to determine current food access
opportunities and purchasing power on the north side
at a finer level of detail than can be obtained by
publicly available data 3. Subsequently, they hope to
undertake a door-to-door survey to determine actual
shopping patterns and food demands of area residents
to deepen the market analysis.
While supporting the effort of those involved in the
Northside Community Co-op, the Northside Planning
Council continues its effort to attract a food retailer or a
mix of food retailers to move in to the vacant space at
Sherman Plaza and fulfill the more general neighborhood demand for access to a full-service grocery
store. Other innovative ideas for the space include a seasonal, outdoor farmers’ market and a food-
buying club.

3
For information on the shortcomings of market studies in underserved areas, see Pawasarat and Quinn,
2001, and Stewart and Morris, 2002).

Draft - 5/14/04 26
Ken Kopps: 1864 Monroe St.
In one of Madison’s near West, well-off neighborhoods, this
former grocery store site has been vacant since Ken Kopps
food store closed in 2001. Sold to Ft. Atkinson- based High
Pointe Properties for $1.5 M in 2001, the 0.7-acre site in the
midst of a high end retail and residential neighborhood is ripe
for redevelopment. The Monroe Street Grocery Cooperative,
which has 500 paid members and 200 pledged members,
has expressed interest in leasing the space for a grocery
store for over 3 years.
Recently named as a Redevelopment District by the City of
Madison, expectations are that something will soon occur at the site. Though the site and neighborhood
context are quite different than those at East Washington Avenue and Sherman Plaza, one condition is
similar. Input from citizens and City leaders is important, but can have only limited influence over the
timing and decisions involving a privately held parcel of land. Since few or no other appropriate sites
exist in the neighborhood, the Monroe Street Grocery Cooperative (MSGC) is continuing its efforts to
design an economically feasible grocery store with this particular site in mind, though their discussions
with the property owner have not indicated that plans for the site include a co-op.
Aside from their primary goal of obtaining a site for the Cooperative, two leaders of the MSGC effort
expressed support for another independently owned grocery store moving in to do business in the
neighborhood. The bottom line is that area citizens want a small to medium-sized grocery store
(approximately 10,000 square ft.) to serve their needs, and they want one that will stay for the long term.
From the perspective of any food retail business, the location of the site is attractive, but it may be
perceived to lack ample parking, and the building itself requires significant improvement. With the high
cost of the site and the thin profit margins characteristic of food retailers, it seems as though the best
chance for a grocer to succeed on the site may be as a part of a mixed-use development with either
underground or rooftop parking provided. The costs of providing this kind of infrastructure are substantial,
but the right public/private financing partnership could prove effective to ensure that a grocery store
returns to the Monroe Street Neighborhood.

Recent Developments
In the first quarter of 2004, a new partnership entered into an agreement with High Pointe Properties to
purchase the site from them. The Madison-based partnership has held discussions with a wide variety of
food retailers, including the MSGC, to evaluate the feasibility of a grocery store returning to the site. They
have also briefed area Alders about their concept plans for the site.
Preliminary discussions between the City and the partnership have focused on the grocery store
prospects, off-street parking, and the development of housing as part of the project. While no formal
plans have been submitted to the City, the partnership is working to set up meetings with the neighbors
and businesses in the area to discuss their plans and to respond to questions or concerns that they might
have.

Draft - 5/14/04 27
Goals and Policy Options for the City of Madison
As demonstrated in the updates on recently closed grocery store sites, many situations regarding food
retail operate in the private realm at the whim of market pressures that the City of Madison has a limited
capacity to alter. Essentially, as long as a particular parcel is owned by a private entity, the City as an
entity faces significant limitations on what can be done to ensure that a particular use (a grocery store)
occurs on site.
The City has and will continue to support citizen-led initiatives and aid in negotiations to promote grocery
stores on a site-by-site basis. At the most drastic level, the City could utilize eminent domain and
condemn a parcel of land for the public good, acquire it, and prepare it for redevelopment with the hope of
attracting a grocery store. To do this is extremely rare, and would require an unlikely set of
circumstances. Even then, however, a grocer would not come about automatically.
There are a few places within the existing policy and planning framework worthy of recognizing, and
perhaps amending, in order for the City of Madison to take proactive measures to retain existing food
retail businesses and encourage neighborhood grocery stores to locate in developing and re-developing
neighborhoods. Recommendations for three general goals are outlined below, followed by a framework
of realistic opportunities to work towards those goals within municipal policies and programs.
General Goals

1) Retain a diversity of food buying options and preserve maximum access to nutritious,
affordable, and culturally appropriate food choices for all Madison residents.

2) Encourage the development of small and medium sized grocery stores in developing and
re-developing neighborhoods to provide food-purchasing options within proximity to
residents in neighborhoods across the City of Madison.

3) Encourage food related entrepreneurial & employment opportunities that support one or
both of the above goals.

4) Support Madison-owned grocery stores to the extent possible.

Since the four goals are so closely interrelated, it is difficult to pull apart and suggest policy options to
work toward them separately. Further, significant input from the Neighborhood Grocery Store
Committee and City of Madison staff in order to shape specific policies and determine specific
“triggers” for action if necessary. Therefore, rather than breaking down each goal into specific
objectives and recommendations, what follows is a policy framework within which specific language
and/or programs could be added to explicitly include the importance of preserving and maintaining
neighborhood grocery stores in the City of Madison.

Draft - 5/14/04 28
Comprehensive Plan Process
Madison’s comprehensive plan process is a crucial and very current place to include support for existing
and new grocery stores. The land use and economic issues linked to grocery stores are relevant in both
developed and undeveloped areas of the city. While grocery stores are recognized as key components
of healthy neighborhoods in some existing plans, and are being planned for in undeveloped areas, no
specific guidelines regarding grocery stores currently exist. As citizen groups and neighborhood
associations meet to contribute to the planning process, grocery stores should be explicitly recognized as
key components of healthy and livable neighborhoods.

Where possible, specific language should be included in the Comprehensive Plan to identify
grocery stores as important considerations for developing and redeveloping neighborhoods.
Land Use Regulation
In all existing commercial zoning districts in Madison, grocery stores are currently a permitted use, and
are limited to 50,000 square feet unless a conditional use is provided. While grocery stores are widely
allowed within the zoning code, perceived inadequacies in market demand and space for parking are
often limiting factors in the business decisions of food retailers. These are more related to market factors
than to specific regulatory barriers
Importantly, mixed-use developments – which could include grocery stores on ground floors- are allowed
and encouraged in commercial zones. From a developer’s perspective, such developments may render
grocery stores financially feasible in the long run, since the inclusion of other uses (second and third floor
office or residential) could significantly offset the low rents food retailers can afford. Further, mixed-use
developments may be better able to work out shared parking arrangements, and perhaps even include
underground parking to minimize the need for large surface lots. Rather than specific changes to zoning
policy to accommodate grocery stores, the following two recommendations may help to support
neighborhood grocery stores in existing and developing neighborhoods:
During the review and negotiation process for Planned Unit Developments and mixed-use
development proposals within commercial zones, possibilities for including food retail should be
considered and analyzed (see page 4 for examples).
When possible, planning staff and property owners should initiate Shared Parking negotiations
between potential grocers and nearby businesses in order to minimize the need for new surface
parking.
Financial Assistance
Loans:

There are two city financial resources in which existing loan programs could explicitly support grocery
stores: The Community Development Block Grant (CDBG) program and Capital Revolving Funds.
Through its Business Loan Program, the Madison Development Corporation (MDC) is able to obtain
CDBG funds and provide loans for businesses that are creating new jobs in the City of Madison. Though
it is certainly not specific to food retailers, MDC has assisted a handful of other food retailers in the past,
and could certainly be considered as a future source of assistance.

Draft - 5/14/04 29
 While essentially operating in the same way, CDBG and the Capital Revolving Loan Program
could set-aside a percentage of their funds each year for food retail businesses, to ensure that
among all small businesses, applicants from food retail businesses providing entrepreneurial and
employment opportunities are identified and supported in Madison neighborhoods.
Within the Capital Revolving Loan Program, funds could be dedicated for equipment upgrades
and facade improvements for existing grocery stores.
Tax Increment Financing (TIF):
Put simply, TIF is an economic development tool that allows municipalities to invest in public
improvements, attract private investment in an approved district, and utilize property tax from the
increased tax base within that district (the tax increment) to pay back the loans needed for the initial
public investment. When initial public costs are recovered, the district is terminated, and its increased
value is returned to the general city tax base.
According to Wisconsin legislation and City of Madison policies, TIF should primarily be used to
encourage the redevelopment of “blighted” urban areas. Importantly, TIF should be limited to those areas
where private investment would not otherwise occur without initial public expenditures. By itself the need
for a grocery store will not likely be a catalyst for the formation of a new TIF district. However, financial
assistance for businesses locating in existing TIF Districts is a strong possibility. Through TIF policies
and procedures, there are a few ways for the City of Madison to support grocery stores, specifically.
When proposed TIF districts are reviewed, considerations should be made regarding grocery
store access and the need in and surrounding the proposed district.
Within existing TIF districts, where a grocery store would be appropriate, recruitment of and
financial assistance for grocery stores should be a priority.
Within existing TIF districts, where a grocery store (alone or within a mixed-use development)
would be appropriate, but lack of adequate parking prevents a major barrier, the financial
feasibility of providing support for parking infrastructure with tax increment should be assessed.
Neighborhood Planning Grants:

Currently, Neighborhood Planning Grants are awarded to neighborhood and business associations to
assist with strategic planning for the future. In 2004, a total of $20,000 will be divided among various
applicants across the city. As neighborhood groups have taken the lead on organizing in support of
grocery stores on Madison’s North and West sides, this seems an appropriate way in which they could
gain financial assistance from the city. Specifically, where cursory market studies have fallen short in
illustrating the true need for grocery stores, citizens on the North side are sponsoring market basket
analyses and door-to-door surveys to determine true food purchasing options and needs in the area.
Through Neighborhood Planning Grant programs, neighborhood associations should be able to
gain financial support for administering market surveys to aid in recruitment of grocery stores
appropriate to serve neighborhood needs.
Further, City staff could perform outreach to encourage neighborhood groups to apply for grants
for this purpose.

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Real Estate Strategy
If a grocery store is much needed in a particular neighborhood, yet simply not being provided by the
market, it is possible for the City to invoke its authority to condemn, purchase, and resell land at a below-
market rate for the specified development of a grocery store. This particular scenario is rare because of
the great expense incurred to the City, yet procedures for condemnation are important to clarify.

The City has broad discretion for condemning properties in order to eliminate blight or to serve a public
purpose. The most likely way for condemnation to occur to make way for a neighborhood grocery store
would be in conjunction with the elimination of blight. Before condemnation can occur for this purpose, a
particular parcel or group of parcels must be declared a Redevelopment District, which requires a period
of 90 days and a public hearing.
After a Redevelopment District is created, it can take several months to relocate existing tenants (if
applicable), before the City or the Community Development Authority (CDA) can condemn and acquire
control of the property. If this were to occur, the next step would be for the City to complete any
necessary demolition, environmental remediation, or infrastructure improvements before releasing a
Request for Proposals (RFP) for a specific type of development. Importantly, within an RFP, the City or
CDA could certainly specify that a grocery store of a particular size must be included in a proposed
development.
The creation of a Redevelopment District not only authorizes the City to condemn land, but also to bond
for necessary improvements- a much less expensive scenario. Thus, if a current private landowner
wishes to make necessary improvements to locate a grocery store within a Redevelopment District, but
demonstrates need for financial assistance to do so, the City may issue bonds to assist with
improvements rather than condemn the property.
Within existing Redevelopment Districts, City staff may assess the need for neighborhood grocery
stores and the suitability of blighted parcels. If both inadequate food retail access and suitable
sites are discovered, discussions could be initiated with landowners and developers to determine
the feasibility of locating a grocer in the district.
Depending on the level of need for a grocery, and the suitability of parcels, municipal bonds and
or condemnation should be considered as methods by which the City can support improvements
on the blighted sites to attract grocery stores.
Where severe need for a grocery store is shown outside of existing redevelopment districts,
assessments of blight in the area may be undertaken to determine whether or not the creation of
a Redevelopment District is an appropriate way to initiate City involvement.
Market Analysis
Within the City of Madison Department of Planning and Development, market studies are often completed
to assist the private sector in making business location decisions, or to recruit particular types of
businesses. As an item within the capital budget, Preliminary Planning Grants are the major source of
funds for these studies, which focus primarily on redeveloping areas.
The Department of Planning and Development should assess the need for upgrades of market
analysis software to more efficiently and accurately capture neighborhood food needs.
As market analyses for food retail are completed, procedures and findings can be shared and
utilized as educational tools for citizens on the City of Madison website.

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Other Options / Related Opportunities
1) Create a Food Policy Council
Rather than considering the formation of a completely new committee requiring support from City staff, a
Food Policy Council could be created to better coordinate and prioritize proactive measures to address
the following issues, each of which already receive attention from City staff in some form: Hunger
Prevention, Nutrition & Health, Grocery Stores, Community Gardens, and Farmers’ Markets. Successful
Food Policy Councils with City (and often County) support have been created in many North American
cities, and are important to consider as ways to better understand and prioritize responses to the many
ways people, cities, and landscapes are affected by food (Borron, 2003; Portland-Multnomah Food Policy
Council, 2003.)
Pursue funding for the creation of a Food Policy Council, possibly as a partnership with Dane
County
2) Focus on a Transportation Strategy to Increase Access to Grocery Stores
This report has focused primarily on municipal land use and economic development strategies to
encourage grocery stores. However, an alternative strategy might focus on providing more convenient
transportation options for seniors and others without vehicle access to existing full-service grocery stores.
Importantly, the Metro Transit “Ride Guide” already identifies grocery stores as popular destinations along
bus routes, but perhaps transportation and food could be more closely linked as a short term strategy to
increase access to a variety of food choices
Support a focused campaign to inform citizens of existing Metro transit options to and from
grocery stores
Evaluate the transportation needs of senior citizens and those without vehicles in Madison, and
expand public transportation options to grocery stores or support food delivery programs
accordingly
Explore opportunities to work with taxi companies to provide free or reduced rates to full-service
grocery stores for those that meet a particular set of criteria, such as participants in the Women,
Infants, and Children (WIC) program or food stamp recipients
3) Promote Energy Conservation as an Opportunity for Food Retailers to Cut Costs
With substantial energy needs for lighting and refrigeration, energy efficiency within the grocery store
industry can have a significant impact on profit margins, and help to keep small, independent grocers
profitable. Moreover, the concept of energy efficiency contributes to more ecologically sustainable
businesses and neighborhoods.
The City’s Energy Task Force, MG&E, and the Neighborhood Grocery Store Advisory Group
could initiate a joint research effort to document current energy use in Madison’s grocery stores,
compile information on State and Federal support programs supporting energy efficiency, and
distribute this information to business owners.
4) Assist Area Food Producers and Small Grocery Stores by Supporting Local Food Distribution
Provide support for the Centralized Agriculture and Food Facility (CAFF) project as a means to
support area farmers and scale up the distribution of fresh and local foods to grocery stores of all
sizes, foodservice institutions, and restaurants

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Potential Partners/ Related Programs

The preceding recommendations omit- though hopefully support- the much needed parallel efforts
undertaken by citizens, entrepreneurs, non-profit organizations, and the private sector to preserve and
encourage neighborhood grocery stores in the City of Madison. In addition, many of the
recommendations would require finding State, Federal, and private funding sources to leverage City
support.

As evident in the report, issues related to grocery stores are quite complex, and include food security and
health, urban land economics, neighborhood livability, entrepreneurship and job training, and more. The
following list illustrates both the sheer complexity of grocery store issues, as well as the immense
potential for public, private, and non-profit entities to organize cooperative efforts to support the goals
outlined in this report.

City of Madison Departments

Department of Planning & Development
• Office of Business Resources
• Community Development Block Grant
• Community & Economic Development Unit
• Planning
Office of the Mayor
Madison Metro Transit
Traffic Engineering
Department of Public Health
State of Wisconsin Agencies, Programs, and Possible Funding
WI Department of Administration: Focus on Energy Program
WI Department of Health & Family Services
WI Department of Commerce: Business Incentives
WI Department of Agriculture and Consumer Protection
WI Housing & Economic Development Authority (WHEDA): Small Business/Agriculture Financing

Federal Funding Possibilities

Dept. of Housing & Urban Development (HUD) Economic Development Initiative
USDA Community Food Projects Grants
http://www.csrees.usda.gov/fo/fundview.cfm?fonum=1080

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Area Nonprofit Organizations related to Food and Hunger Prevention
Dane Cty Hunger Prevention Council http://www.madison.com/communities/hpcdc/index.php
Community Action Coalition http://www.cacscw.org
REAP (Research, Education, Action, and Policy) Food Group http://www.reapfoodgroup.org
Friends of the Dane County Farmers’ Market
Friends of Troy Gardens
University of Wisconsin Entities
UW Extension
Center for Cooperatives
Center for Integrated Agricultural Systems
Department of Urban and Regional Planning
Department of Consumer Science
Community & Economic Development Organizations
Madison Development Corporation http://www.mdcorp.org/
Commonwealth Development http://www.cwd.org/
Wisconsin Women's Business Initiative Corporation http://www.wwbic.com/
Wisconsin Business Development Finance Corporation http://www.wbd.org/
Private industry leaders

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Conclusion
Grocery stores offering affordable, nutritious foods are a vital component of healthy lifestyles, healthy
neighborhoods, and a healthy city. With regard to equitable access to food choices, sustainable
neighborhood development, and support for food-related entrepreneurship, food retailing becomes a
public issue. The prevailing trends of the food retail industry are a nearly impossible tide to turn in any
city without strong public private partnerships, changes in consumer purchasing patterns, and
transportation choices.
That said, organized action on the part of City agencies can be an important part of a proactive effort to
retain the diversity of existing food retailers and encourage the development of neighborhood grocery
stores to better meet the needs of city residents. Within the existing framework of land use, financial
assistance, and redevelopment policies, city agencies should explicitly recognize neighborhood grocery
stores as a vital component of the city as a whole. Innovative partnerships with citizen groups, non-profit
organizations, State and Federal agencies, private industry, and the University of Wisconsin are likely to
significantly strengthen the effort and provide a model for other Wisconsin cities facing similar needs.
However, In order to keep grocery stores in city neighborhoods, responsibility also rests on city residents,
who must continue to recognize their many benefits and support them. Even for those with easy access
to transportation, finances, and food choices throughout the City, the benefits of having entrepreneurial
and employment opportunities and nutritious food choices within a short distance from home are well-
worth supporting. For those without easy access to transportation, the benefits of having full-service
neighborhood grocery stores may be even more important. Through consumer choices and input into
neighborhood and comprehensive planning processes, each and every citizen can be a part of the effort
to retain and encourage neighborhood businesses that offer nutritious, culturally-appropriate, and
affordable food choices to all Madison residents.

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