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Funding Sources For Healthy Food Retail : Category - State (CA)

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 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.

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 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.