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Funding Sources For Healthy Food Retail : Category - Job creation

California Department of Housing and Community Development (HCD)

Enterprise Zone (EZ) Program

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.

California State Redevelopment Agency Funds

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:

U.S. Department of Agriculture (USDA)

Community Food Projects (CFP) Grant Program

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.

 

U.S. Department of Agriculture (USDA)

Intermediary Relending Program (IRP)

The IRP provides funds to local intermediary organizations to establish revolving loan funds (recirculated into new loans for other projects) toward reducing poverty and expanding economic activity and employment in disadvantaged rural communities. The intermediary organizations are responsible for lending money to finance business creation, upgrade, or expansion; acquire and develop land; conduct feasibility studies; and carry out other related economic development activity.

Eligibility: 

Private nonprofit corporations, public agencies, Indian groups, and cooperatives with at least 51 percent rural membership aimed at increasing income for producer members or purchasing power for consumer members may apply for intermediary lender status. Loans may be made to the following entities, provided they are located in a rural area (an area with a population of 25,000 or less):

  • Individual citizens or individuals who have been legally admitted to the United States
  • Entities that are able to incur debt, give security, and repay the loan
  • Corporations, partnerships, limited liability corporations, individuals, nonprofit corporations, or public bodies

U.S. Department of Commerce

Economic Development Administration (EDA)

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.

 

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

Empowerment Zone / Enterprise Community (EZ/EC) Program

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.

 

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

Brownfields Economic Development Initiative (BEDI)

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.

 

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

Community Development Block Grants (CDBG)

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.

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

Renewal Communities (RCs)

Since 2002, HUD has designated 40 areas around the country as Renewal Communities (RCs), making them eligible for $17 billion in funds to stimulate economic development, affordable housing, and job creation. An estimated $6 billion in incentives are available exclusively to Renewal Communities, with another $11 billion available through Low-Income Housing and New Markets Tax Credits.

Eligibility: 

There are five RCs in California-in San Francisco, San Diego, Los Angeles, Parlier, and Orange Cove. Businesses of all sizes located within these RCs are eligible to receive incentives to open, to expand, and to hire local residents.

Project Example: 

San Francisco, California: Harvest Urban Market
The Harvest Urban Market is an 11,000-square-foot store that sits on the ground floor of an affordable housing development. The Citizens Housing Corporation and the Tenderloin Neighborhood Development Corporation secured a $4.6 million loan from the San Francisco Redevelopment Agency (SFRA) to purchase land for the market, housing, and a childcare center and after school facility. The Market also used a $1.2 million commercial revitalization deduction available to businesses locating in the renewal community to reduce its overall investment costs. In addition to fresh meat and produce, the market offers a variety of healthy, prepared meals that can be eaten onsite. San Francisco, California: Harvest Urban Market
The Harvest Urban Market is an 11,000-square-foot store that sits on the ground floor of an affordable housing development. The Citizens Housing Corporation and the Tenderloin Neighborhood Development Corporation secured a $4.6 million loan from the San Francisco Redevelopment Agency (SFRA) to purchase land for the market, housing, and a childcare center and after school facility. The Market also used a $1.2 million commercial revitalization deduction available to businesses locating in the renewal community to reduce its overall investment costs. In addition to fresh meat and produce, the market offers a variety of healthy, prepared meals that can be eaten onsite.

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

Rural Housing and Economic Development (RHED) Program

RHED grants are targeted at economic development and innovative housing strategies in rural areas. Two types of funding are available through this program:

Eligibility: 

Local rural nonprofit groups, community development corporations (CDCs), federally recognized Indian tribes, state housing finance agencies (HFAs), and state community or economic development agencies are eligible for these grants.

Project Example: 

Pendleton, Oregon: Mission Market
In 2001 the Confederated Tribes of the Umatilla Indian Reservation received a RHED grant of $400,000 to construct and operate a $983,600 grocery.

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

Section 108 Loan Guarantee Program

Section 108 is the loan guarantee provision of the Community Development Block Grant (CDBG) program, providing financing for economic development, housing rehabilitation, public facilities, and large-scale physical development projects. It allows communities to transform a small portion of their CDBG funds into federally guaranteed loans large enough to pursue physical and economic revitalization projects that can renew entire neighborhoods. This kind of public investment is often needed to inspire private economic activity of all kinds, including food retail.

Eligibility: 

The following entities are eligible for funds:

  • Metropolitan cities and urban counties (see the entry on the Community Development Block Grant program for an explanation of eligibility criteria for entitlement communities)
  • Non-entitlement communities that are assisted in their application by states that administer the CDBG program
  • Non-entitlement communities eligible to receive CDBG funds under the HUD-administered Small Cities CDBG program (the public entity may act as or designate a public agency as the borrower)
Project Example: 

San Bernardino, California: Food 4 Less Supermarket
The city of San Bernardino received Section 108 guaranteed loans in 2005 to fund the city's redevelopment agency, which will use the funds to finance acquisition, demolition, and relocation in support of two retail projects, including the development of a Food 4 Less supermarket. The two retail projects are estimated to generate 375 full-time jobs, at least 51 percent of which will be made available to low- to moderate-income individuals.