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Funding Sources For Healthy Food Retail : Category - Local Governments

California Department of Housing and Community Development (HCD)

Block Grants

State-run block grant programs, like their federal counterparts, fund economic and community development strategies in low- to moderate-income communities. Federal law requires that states use at least 70 percent of all CDBG grant money for activities that benefit low- to moderate-income people. Projects include planning and technical assistance grants for businesses, infrastructure improvement grants to support business development, and lending programs for private enterprise through the California Community Economic Enterprise Fund.

Eligibility: 

State CDBG programs grant resources to jurisdictions not eligible for federal Community Development Block Grants. These include cities of fewer than 50,000 people and counties with fewer than 200,000, and include specific allocations to Native American and Colonias jurisdictions.

Project Example: 

El Dorado County, California: Farmers' Market
Funding from a California CDBG was used to conduct a farmers' market feasibility study in this rural Northern California county.

 

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)

Agricultural Marketing Services Program (AMS)

The Agricultural Marketing Services' Farmers' Market Promotion Program (FMPP) offers grants to help improve and expand domestic farmers' markets, roadside stands, community-supported agriculture programs, and other direct producer-to-consumer market opportunities. Approximately $1 million was allocated for 2007, with the amount awarded for any one proposal not to exceed $75,000.

Eligibility: 

Entities eligible to apply include agricultural cooperatives, local governments, nonprofit corporations, public health corporations, economic development corporations, regional farmers' market authorities, and tribal governments.

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.

U.S. Department of Agriculture (USDA)

Federal-State Marketing Improvement Program

The USDA runs the Federal-State Marketing Improvement Program (FSMIP) in an effort to explore new market opportunities for U.S. food and agricultural products, and to encourage research and innovation aimed at improving the efficiency and performance of the U.S. marketing system. The FSMIP allocates matching funds to state-level agriculture departments and other related state agencies. Each year the FSMPI offers about 25 to 30 grants for applied research projects averaging $50,000 each.

Eligibility: 

Appropriate state agencies (e.g., departments of agriculture, bureaus and departments of markets, and agricultural experiment stations) may apply for FSMIP grants.  However, these grants could support marketing and promotion for a farmers' market if market organizers partner with a state agency to apply for funds.

Project Example: 

Oklahoma: Farmers' Markets
FSMIP supplied a matching grant of $80,000 to examine marketing practices at current and former farmers' markets in Oklahoma, and to evaluate the economic and other factors that appear to impede or contribute to the financial success of farmers' market operations.

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 Agriculture (USDA)

Rural Business Opportunity Grants (RBOG)

Rural Business Opportunity Grants are aimed at promoting sustainable economic development in rural communities, which includes supporting technical assistance for rural businesses and training for rural entrepreneurs or economic development officials. Activities funded by the RBOG include real estate acquisition, building construction, and development. The maximum grant amount for projects serving one state is $50,000, or $150,000 for those serving two or more states.

Eligibility: 

Applicants must be public entities, nonprofit corporations, Indian tribes, or cooperatives with primarily rural members.

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)

Community Food and Nutrition Program (CFN)

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.

 

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)

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.

University of California at Davis

Sustainable Agriculture Research and Education Program (SAREP)

SAREP supports scientific research and education on agricultural and food systems that are economically viable, conserve natural resources and biodiversity, and enhance the quality of life in the state's communities. Grants are designed to promote two objectives:

Eligibility: 

Grants are targeted to University of California Cooperative Extension advisors and directors. Collaboration with scientists, California graduate students, farmers, ranchers, community groups, nonprofit organizations or public agencies is strongly encouraged.

Project Example: 

West Oakland, California: Food Security Council Model Program
In 2001 SAREP awarded $15,000 to the West Oakland Food Collaborative to develop a comprehensive food system plan aimed at implementing food security strategies, providing access to healthy foods and revitalizing the community. This project enabled the organization to create a development plan and leverage additional funding for the expansion and development of a farmers' market, a cooperatively owned grocery, corner store conversions, community green space, and the growth and development of community-based businesses.