The Dog said it here first. The new city-sponsored, bought and paid for Sun Fresh at Linwood and Prospect is yet another money-suck to the general fund.
Last week, the city’s Finance & Governance committee voted unanimously to hand over $345,000 from taxpayer funds to yet another feel-good urban core, vote for me, photo-op failed cause.
This conservative-thinking Newsdog wonders what exactly went wrong with the project. All the new operator had to do was turn a key in the front door and order stock from the various grocery suppliers in town.
After that, work the deal like he had done for over forty years prior in his previous grocery operations. No rent to pay, no real estate taxes to pay, only overhead costs in the form of food cost, labor and utilities. What could possibly go wrong!
Even the mayor was quick to point out at the onset that the store would pay back the TIF financing through grocery receipts.
After speaking with local grocery stores, we know that roughly 75% of sales at grocery operations on the city’s East Side are purchases using WIC and or EBT cards. Those purchases incur no sales tax.
Sales taxes are used to repay the TIF financing. So immediately upon the doors opening, the store is already failing to meet its financial obligation.
The Dog noted this in an editorial piece that ran in June of 2016 entitled “Kansas City Food Desert Myth” that questioned the stores ability to pay back the TIF financing and also questioned the designation of the area as a food desert, citing USDA studies that stated even if you build it, customers might not come.
Additionally, the store’s major supplier, Associated Wholesale Grocers must not be too serious about keeping the failing operation open given their lax attitude when it comes to sales and marketing of the new operation.
Usually, if a retail outlet is lagging in sales, the advertising budget is increased in order to reach a wider audience and increase traffic.
The Dog’s team has reached out on a number of occasions to try and secure an ad buy from the store or its parent company, AWG.
Our overtures for an ad buy to date have been met with crickets. Maybe we’re barking up the wrong tree though, maybe we need to send a proposal to City Hall to see how that flies.
This critically-thinking news-pooch wonders how long the Linwood and Prospect grocery operation will be a drain on city resources. Over $17 million has been invested in the shopping center project so far.
The city isn’t bailing out other independently-owned grocery operations in the urban core either. Stores such as Happy Foods, Snyder’s Supermarket or Leon’s Thriftway haven’t received one thin dime of city-sponsored welfare.
It should also be noted that Leon’s closed recently when the long-time owner decided to pack it in and retire. Interesting the number of high-profile municipal elected officials who dropped by on the store’s last day for a photo-op with the long-time owner, our new mayor being chief among them, but didn’t pony up any substantial financial bail out to keep the store open. Things that make you go hmmmmm.
Here’s the deal. As long as the City continues to prop up big-time, hot-shot developers and throw serious cash at failing TIF projects, no serious infrastructure improvements and no substantive reform will occur in the city’s core.
The Dog gets it. Watch for a TIF project filing from St. John and Topping coming soon. Hey! It worked for the hot shots downtown, why not here?