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Delivering on need for urban supermarkets

Seeking regulatory relaxation to encourage end to N.J. ‘food deserts’

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Leaders of the state’s supermarket industry are calling for a closer look at how to encourage urban supermarkets, drawing interest from officials like Lt. Gov. Kim Guadagno.

The New Jersey Food Marketing Task Force, which included company executives, as well as state and nonprofit officials, is calling for a reduction in regulations, as well as new avenues for financing supermarkets in so-called “food deserts” — underserved areas in urban and rural locations alike. These recommendations were included in a recently released report, “Expanding New Jersey’s Supermarkets: A New Day for the Garden State.”

The financing effort may receive a boost from a bill that has already been introduced in the Legislature.

Task force member Mitch Klein said New Jersey is a challenging state to build new supermarkets, and that the task force recommendations could help alleviate that.

“We have made some improvements, but we have a long way to go,” said Klein, vice president of retail services for Krasdale Foods, a New York-based grocery wholesaler.

Klein pointed to a task force recommendation that the state reduce regulatory hurdles for new supermarkets as particularly important. He said the state has blocked new supermarkets by limiting the number of venders for the federal nutrition program for women, infants and children. The state limits new vendors based on the total number of vendors in an area, rather than considering how new supermarkets can offer lower prices than corner stores, Klein said.

Phil Scaduto, task force co-chairman, said supermarkets are looking for opportunities to expand, but the economics of underserved areas can make it difficult.

“It’s not just certain areas, it’s throughout the entire state that you have tremendous areas that are isolated,” said Scaduto, vice president of marketing and administration for Food Circus Supermarkets Inc.

These areas sometimes are served only by corner stores or bodegas, which offer limited fresh food and higher prices than supermarkets, Scaduto said.

Linda M. Doherty, a task force member and president and CEO of the New Jersey Food Council, said the nine recommendations by the task force can contribute to a model for building new supermarkets.

“We’re pleased with the outcome of the report, and even more encouraged that the (Chris) Christie administration, in particular the lieutenant governor, supports the effort and is engaged in the effort to move this forward,” Doherty said.

She said the financing issue could be addressed through bill S-531, which seeks to establish a “New Jersey Food Access Initiative” funded with 5 percent of sales tax revenue from businesses in Urban Enterprise Zones.

Assemblyman Gilbert L. “Whip” Wilson (D-Camden), who sponsored an Assembly version of the bill in the last legislative session, said he would like to see the UEZ money devoted to the initiative as part of a broader overhaul of UEZ funds.

Wilson also sponsored a law that will fund a refrigerated truck to bring fresh food to neighborhoods that aren’t near supermarkets. His home city of Camden was selected by the state for a pilot program.

Michael McGuinness, CEO of the New Jersey chapter of commercial real estate association NAIOP, said the effort could have the secondary benefit of increasing the economic vitality of food deserts. The process of adding a supermarket to an underserved area “encourages business to locate there; it encourage 24/7 activity,” McGuinness said.

Task force member Stephanie Wall, Wells Fargo’s regional senior vice president of community development, said the effort to add supermarkets to food deserts is part of a broader effort to revitalize communities.

Wall said the premier example in the state is the new Fresh Grocer store being built in New Brunswick, which will be adjacent to a health and wellness center.

“There’s a lot of push right now to buy local, to eat local,” Wall said, adding that local markets that sell healthier food can contribute to reducing health problems. “We need to make fresh food convenient in the same way that we make McDonalds convenient.”

Wall said supermarkets can contribute to a mix of new development — particularly transit-oriented and affordable-housing development in urban areas.

“The years of just saying that ‘I put up an affordable housing development, I’m done,’ are over,” Wall said, adding that providing additional retail and job opportunities are essential to building neighborhoods.

 

E-mail to:  akitchenman@njbiz.com
On Twitter:  @Kitchenman

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