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Funding Sources For Healthy Food Retail : Category - Nonprofits

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 Public Employee Pension Funds

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.

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)

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 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 Agriculture (USDA)

Rural Cooperative Development Grant Program (RCDG)

RCD grants are awarded to improve the economic condition of rural areas by helping to establish and support cooperatives. In 2007, more than $3.5 million was awarded to 19 grantees. The maximum grant amount is $300,000, and recipients must contribute at least 25 percent of total project costs.

Eligibility: 

Nonprofit corporations, including institutions of higher education, are eligible.

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)

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 the Treasury

New Markets Tax Credits (NMTC)

Through this program-one of the largest federal economic development programs-privately managed investment institutions known as community development entities (CDEs) make loans and capital investments to businesses in underserved areas. These designated CDEs must use at least 85 percent of these proceeds to make qualified low-income community investments. As of November 2007, the NMTC program had given 294 awards totaling $16 billion to CDEs. Loans and other funds available through these entities may vary.

Eligibility: 

An organization wishing to receive funds under the NMTC program must be certified as a CDE by the US Department of the Treasury. To qualify as a CDE, an organization must:

  • Be a domestic corporation or partnership
  • Have as its primary purpose serving or providing investment capital for low-income individuals or communities
  • Be accountable to low-income communities through residents being represented on a governing or advisory board

Private for-profit and nonprofit businesses in geographically targeted communities may receive loans from these CDEs.

Project Example: 

Milwaukee: Lena's Food Market
New Markets Tax Credits were used in 2005 to expand Lena's Food Market to an additional location by redeveloping a 33,000-square-foot building in Milwaukee with an additional 50,000 square feet of warehouse space.

Minneapolis: Midtown Global Market
The Market, which opened in 2006, is an 80,000-square-foot public marketplace where 50 local businesses offer a variety of internationally themed fresh and prepared foods. It supports local entrepreneurs and provides 200 permanent jobs. The NMTC program was essential in lending this project initial credibility and helping it attract additional private investment.

Philadelphia: Island Avenue ShopRite
ShopRite, a 57,000-square-foot supermarket, opened in 2005 with support from New Markets Tax Credits (as well as Pennsylvania's Fresh Food Financing Initiative). Most of the supermarket's 258 quality jobs, many with attractive employee benefits, are filled by local residents.