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Funding Sources for Healthy Food Retail

Developing new grocery stores and cooperatives, creating farmers' markets, and improving the quality of foods sold at convenience stores are all ways to increase a community's access to healthy foods. This guide provides an overview of the range of federal and California funding programs available to support these strategies.

You may download a PDF of "Funding Sources for Healthy Food Retail" (describing all 23 resources) or use the links to the right to explore funding options by category.

To suggest additions to this guide, please contact us info@healthyplanning.org

Agricultural Marketing Services Program (AMS)

U.S. Department of Agriculture (USDA)

The Agricultural Marketing Services’ Farmers’ Market Promotion Program offers grants to help improve and expand domestic farmers’ markets, roadside stands, community-supported agriculture programs, and other direct producer-to-consumer market opportunities. Projects are funded in amounts between $2,500 and $100,000. In FY 2010, approximately $5 million in grant funds will be available. In FY 2011 and FY 2012, approximately $10 million in grant funds will be available each year.

Eligibility: 

Entities eligible to apply include agricultural cooperatives, producer networks, producer associations, local governments, nonprofit corporations, public benefit corporations, economic development corporations, regional farmers’ market authorities, and tribal government.

Project Example: 

Davis, California: Farmers' Market Foundation

In 2006 the FMPP awarded $41,800 to the Davis Farmers’ Market Foundation to create new marketing opportunities for vendors through an innovative partnership with the Davis Joint Unified School District.

Brownfields Economic Development Initiative (BEDI)

U.S. Department of Housing and Urban Development (HUD)

BEDI grants are aimed at helping cities create jobs/businesses and promote other efforts to increase the local tax base by redeveloping industrial and commercial sites known to be abandoned, idle, or underutilized. A total of $32 million was awarded in 2007, and there is a cap of $2 million per grant.

Eligibility: 

Community Development Block Grant (CDBG) entitlement communities and non-entitlement communities are eligible to receive loan guarantees. A request for a new Section 108 loan guarantee authority must accompany each BEDI application. BEDI and Section 108 funds must be used in conjunction with the same economic development project.

 

California State Redevelopment Agency Funds

State of California

More than 400 California cities and counties have adopted redevelopment plans to rehabilitate residential, commercial, industrial, and retail districts. Redevelopment agencies administering these plans have access to unique financing mechanisms that are otherwise not available to cities and counties-the most important being tax increment financing, which allows the redevelopment agency to use the increased property taxes that result from redevelopment projects to repay debts incurred in financing them.

Eligibility: 

Cities and counties are eligible to adopt redevelopment plans and create redevelopment agencies in accordance with California redevelopment laws.  In enacting the community redevelopment law that governs such agencies, the California legislature has implicitly recognized the importance of access to healthy food for improving low-income neighborhoods. In fact, the law explicitly states that one of the defining characteristics of blight is "a lack of necessary commercial facilities that are normally found in neighborhoods, including grocery stores." (CAL. HEALTH & SAFETY CODE § 33031(b)(4) (2006)).

Project Example: 

Sacramento, California: Food Source Grocery
Sacramento's Oak Park neighborhood established a Food Source grocery and retail center in 2002 after gathering an initial $2.5 million in loans and grants from its local redevelopment agency.

 

For more information, see:

California Urban Real Estate Initiative (CURE)

California Public Employee Pension Funds (CalPERS)

The California Public Employees Retirement System (CalPERS) created the California Urban Real Estate Initiative (CURE) in 1995 to focus investments drawn from its statewide employee retirement program into underserved California communities.  By 2005, CURE had $3.4 billion in total assets, $1.2 billion of which was invested in 12 different projects throughout California.

Eligibility: 

CalPERS works with local developers and nonprofit organizations on projects.

Project Example: 

Los Angeles, California
A partnership between CalPERS and the CIM investment group helped bring the first supermarket in 80 years to downtown Los Angeles.

Community Development Block Grants (CDBG)

U.S. Department of Housing and Urban Development (HUD)

The purpose of the Community Development Block Grant (CDBG) program is to help develop viable urban communities by improving the housing, environmental, and economic conditions of primarily low- and moderate-income people. Funds may be used to help private businesses as part of economic development strategies and job creation/retention activities.

Eligibility: 

CDBG money goes to designated entitlement communities, which must be the principal cities of Metropolitan Statistical Areas (MSAs), have populations over 50,000, or be an urban county with a population over 200,000 (excluding the populations of entitled cities within the county). HUD requires detailed plans for citizen participation in the application process. Cities  that do not meet the size requirements for the federal CDBG program may be eligible for assistance through the state-administered CDBG program, also known as Small Cities CDBG (for California's CDBG policy, see the entry in this guide for California Department of Housing and Community Development Block Grants).

Project Example: 

West Fresno, California: Food Max
Community advocates in Fresno convinced the Fresno City Council to set aside money from its $11 million CDBG to build a supermarket as part of a shopping center development. The city was able to negotiate a local hiring policy with the operator. The complex opened in 1999 and remains fully occupied.

Community Food and Nutrition Program (CFN)

U.S. Department of Health and Human Services (HHS)

The Community Food and Nutrition Program provides funding for small programs that coordinate existing private and public food assistance resources to better serve low-income communities. This includes initiating nutrition programs in underserved areas and developing innovative approaches to meet the nutrition needs of low-income people. This program offers about 50 awards each year at a maximum of $50,000 per grant.

Eligibility: 

State and local governments, Indian tribes, and public and private nonprofit agencies (including faith-based and community-based organizations) are eligible. Historically black colleges and universities and other minority institutions are particularly encouraged to submit applications. CFN allots 60 percent of its funding for grants to eligible agencies for statewide programs; 40 percent is distributed on a competitive basis to states and public and private nonprofit organizations.

Project Example: 

Phoenix, Arizona: Farmers markets
Community Food Connections, a nonprofit organization, received a CFN grant to offer wireless point of sale terminals at 20 farmers markets so that food stamp customers will be able to use their electronic benefits transfer (EBT) cards to purchase fresh, local produce at the farmers market.

 

Community Food Projects (CFP) Grant Program

U.S. Department of Agriculture (USDA)

The Community Food Projects Grants Program offers grants and technical assistance to community organizations to support entrepreneurial projects, develop innovative linkages between the for-profit and nonprofit food sectors, and encourage long-term planning activities and interagency approaches. Projects are funded between $10,000 and $300,000 on a one- to three-year grant cycle. Since 1996, CFP has funded 211 projects for a total of more than $31 million.

Eligibility: 

Nonprofits may apply for these onetime grants to establish community food projects.  Project funding requires a dollar-for-dollar match in resources from grantees.

Project Example: 

Los Angeles: The Farmer's Kitchen
CFP funds helped create a teaching and retail kitchen supporting education programs that emphasize fresh produce consumption, job training, and food and nutrition education targeted toward Hollywood's low-income population. The Farmer's Kitchen is a project of Sustainable Economic Enterprises of Los Angeles (SEE-LA).

San Francisco: The Bayview Community Farmers' Market
This farmers' market received $130,000 for a three year project to increase the frequency of market days and to expand the scope and selection of products offered. Outreach to promote the market will focus on low-income populations, particularly food stamp and WIC program recipients.

 

Economic Development Administration (EDA)

U.S. Department of Commerce

The Economic Development Association provides grants to communities to leverage commercial and industrial investment and job creation. It is designed to serve rural and urban areas experiencing high unemployment, low income, or other indicators of severe economic distress. The EDA has several grant programs that could support food retail projects.

Project Example: 

Mendocino County, California: Round Valley Indian Tribes Retail Project
The EDA awarded $437,000 for construction of a retail establishment to serve the Round Valley Indian Tribes, creating new jobs and generating private investment in excess of $1 million.

 

Empowerment Zone / Enterprise Community (EZ/EC) Program

U.S. Department of Health and Human Services (HHS)

The Empowerment Zone/Enterprise Community program directs federal funding to economic and community development projects in distressed urban and rural geographical areas. The program offers special tax incentives, local hiring incentives, and regulatory relief for businesses locating in a designated empowerment zone (EZ) or enterprise community (EC).

Eligibility: 

Communities and businesses located within a designated EZ or EC can obtain these benefits. To determine whether a business is located in a designated EZ or EC area, contact your local office.

Project Example: 

Harlem, New York: Pathmark Supermarket Complex
EZ/EC funds helped to create the East 125th Street Pathmark Project, a full-service supermarket completed in 1999. The project site is a city-owned parcel in Manhattan that created about 200 construction jobs and 275 permanent, unionized full- and part-time jobs, 75 percent of which were hired from the local community.

 

Enterprise Zone (EZ) Program

California Department of Housing and Community Development (HCD)

This program promotes business investment and job creation strategies in economically troubled areas through 15-year partnerships between local governments and private companies. There are 42 enterprise zones (areas targeted for economic revitalization) throughout the state. Incentives include tax credits for job creation and machinery purchases, deduction allowances for businesses and local lenders, preference on state contracts, and carrying forward of net operating losses for up to 15 years.

A number of incentives included in this program may benefit food retail development:

Eligibility: 

Both for-profit and nonprofit businesses located in a California EZ community are eligible for benefits.