Checked Out: Partially Grant-Funded Grocery Store Closes

When it opened in October 2015, the Downtown Market was heralded by city and community leaders as an economic development tool that would bring fresh and healthy food to Evansville's Center City. However, less than two years later, the market abruptly closed, prompting questions about the market's future and the $425,000 in federal grant money used to jump start the project.

According to records obtained by Eyewitness News, the Department of Metropolitan Development contributed a total of $425,000 in federal community development block grant money so Memorial Community Development Corp., the non-profit arm of Memorial Baptist Church, could acquire the Lincoln Ave. property and stock it full of food. At some point earlier this year, the market closed, leaving a series of barren shelves, empty coolers and unoccupied check-out lines.

City officials discovered the market's closing during a compliance check, which is required by the U.S. Department of Housing and Urban Development, which administers CDBG money.

"We monitor [Memorial CDC] every year and make sure that the jobs are still there," said Kelley Coures, the executive director of the Department of Metropolitan Development. "It's not something that is shut down. It's something that is in transition I think."

The market opened amidst much fanfare in late October 2015. Memorial CDC purchased the 40,000 square foot building earlier that year for $400,000, according to property records. Memorial CDC is a registered non-profit whose chief executive officer is Reverend Adrian Brooks, the lead pastor of Memorial Baptist Church.

Coures said Rev. Brooks approached the city in 2014, expressing the previous iteration of the grocery store was going out of business. In that particular building, numerous jobs would be lost and the economically-challenged neighborhood would lose access to fresh and healthy food. The city made a $300,000 grant in order to help Memorial CDC acquire the property using CDBG money, according to records obtained by Eyewitness News through the Freedom of Information Act. Eyewitness News filed the open records request last week and the city produced the records on Friday.

While Memorial CDC was trying to acquire the property, officials from the non-profit discovered an existing loan that had been made to the previous owners, Emporia Inc. The $200,000 loan dated back to 2000 and there was a remaining balance of $154,000, Coures said. Because the money had been loaned out of the city's general fund, the loan could not have been 'written off,' Coures said. 

According to public records, in August 2015, Memorial CDC paid off the remaining $154,000 on the loan dating back to the year 2000, allowing the non-profit to purchase the property using a combination of private financing and the initial $300,000 grant from the city.

In order to stock the facility with food, products and equipment, the city issued two more grants totaling $125,000. Those grants were also made using community development block grant money. Memorial CDC was tasked with operating the grocery store in addition to the rest of the complex.

"It's a perfectly acceptable use of the funds for HUD. Both the acquisition of the market and stocking of the store for fresh food because that area is low to moderate income," Coures said. "As long as there are jobs that are held by low to moderate income people... they meet HUD's requirements that we have to fulfill for five years."

The development met a number of HUD's main areas of focus: employment and access to fresh food for people in economically disadvantaged neighborhoods. As part of the grant agreement, Memorial CDC had to retain a certain number of jobs at the complex in addition to undergoing yearly audits by the city. The city discovered the market was closed during one of those audits a couple of weeks ago, Coures said.

According to Memorial CDC's grant application, the market was to be a mid-size grocery store development that will supply affordable fresh produce and and quality full-line grocery products to underserved center city residents. Memorial CDC was to partner with a local wholesale grocer.

Memorial CDC also planned on offering online shopping, a delivery service and a carry-out restaurant, according to the grant application. The development was to employe 10 to 15 full-time and part-time employees, the grant application states.

"This development will spark economic development in this area because quality grocery stores typically attract additional retailers and other business initiatives," the grant application states.

The grocery store began to dwindle in January and February as more and more items weren't being re-stocked, an employee of a neighboring business said. The employee wished to remain anonymous because he wasn't authorized to speak to the media. Not long after, closed signs were posted on the doors to the market.

Despite the market's closure, the city and Memorial CDC are still in compliance  with HUD guidelines, Coures said, because of the jobs that are still retained. A Dollar General store, a Metro PCS kiosk and two food vendors currently occupy the space. Those jobs have to be retained through the year 2020 in order to stay in compliance with HUD.

"Personally, I would like to see another market open up there for fresh food. People who don't have transportation need access to fresh food so I really hope that market re-opens," Coures said. "It's not something that is shut down. It's something that is in transition."

As for what what transition could entail remains unknown. Reverend Adrian Brooks later sent Eyewitness News the following statement via text message.

"Market conditions that involve commodity prices are making grocery store businesses struggle. It is a low margin business.It is the same forces that drove the co-op store on Washington Avenue and the Grocery market in Newburgh out of business. On the national front it is causing Kroger Grocery stores and their subsidiaries difficulties as well. We hope to reopen someday but the Family Dollar which is one of our tenants has expanded its grocery offerings. I feel very positive going forward that we have tried to always do the right thing for the most vulnerable people living in our community. This is a setback but our faith in God remains strong as we move forward in our faith based community development efforts."


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