Mariano’s gets $5M to build in ‘food deserts’

Written By BY SANDRA GUY Staff Reporter Posted: 07/04/2014, 03:34pm

Mariano’s Fresh Markets will build five new grocery stores in “food deserts” — neighborhoods with no easy access to affordable, fresh food — with the help of $5 million in Build Illinois bond proceeds committed by Gov. Pat Quinn, the company and the state announced Thursday.

The funds will go toward capital construction in order to free up more money for job training.

It’s the first time that Build Illinois bonds will be used to boost healthy food choices in low-income areas, said David Roeder, spokesman for the Illinois Department of Commerce and Economic Opportunity.

Four of the new Mariano’s grocery stores will be inside the city limits, and one will be in the suburbs.

One of the city sites — the former Ida B. Wells housing project at 39th and King Drive — was announced May 14.

An informed source said a second Chicago site will likely be at the former U.S. Steel factory site on the far Southeast Side.

Bob Mariano, chairman, president and CEO of Roundy’s, the Milwaukee-based parent company of Mariano’s stores, would not identify any new sites in a phone interview Thursday.

“We are very careful,” he said. “If you don’t dot your i’s and cross your t’s and you don’t fulfill that commitment [to the food desert], those same people who get disenfranchised and dissatisfied time and time again don’t get the fulfillment of a commitment. . . . There is a lot and lot of work that has to get done.”

Mariano said the company must provide intense job training in underserved communities, including working with new hires on basics such as timeliness, proper attire, work preparation and communicating well with customers.

“In many cases, we’re going into places where people haven’t had jobs or haven’t had jobs in many years,” Mariano said. “We want to spend time on job training and job-preparation skills so that the employees and the store can succeed.”

Mariano aims to hire local residents for the food-desert stores. The company does so at existing stores because most people want to work 2 to 5 miles from their homes, Mariano said.

Each Mariano’s store employs about 415 people.

Mariano’s supermarkets emphasize food stations and fresh, prepared and ready-to-prepare foods — an approach that retail experts say work well in underserved neighborhoods.

The latest research by food-desert researcher and consultant Mari Gallagher shows that an influx of supermarkets has reduced Chicago’s food-desert population by 55 percent, to 288,000, from her initial report of 2006.

Gallagher said she is heartened by Mariano’s plans, especially since successful grocery stores often attract other stores into the neglected areas.

Quinn said in a statement that the goal is to get other businesses to leverage the state bond proceeds to expand into areas that need commercial and retail development.

Roeder said some of the $5 million in bond proceeds will come from bonds already sold to investors. The state will formalize a grant agreement with Mariano’s in the coming weeks, Roeder said.

The state help will amount to a fraction of the cost of each new store, Roeder said.

Mariano’s invests $13 million to $18 million to lease land and prepare each of its newly built stores. The company invested another $7 million per store to buy and remodel 11 former Dominick’s supermarkets. Mariano’s has also spent $500 million to pay union workers, such as construction workers, plumbers, pipefitters and concrete workers, to build the 25 stores now operating throughout the Chicago area, Mariano said Thursday.

By year’s end, Mariano’s plans another four store openings. They are in former Dominick’s stores in far southwest suburban Shorewood in about 10 days and in west suburban Westchester in November, and newly built stores in Oak Lawn in September and Glenview in November.

The company intends to have 39 stores by year-end 2016 and, ultimately, 50 in the Chicago region by opening five new stores each year, Mariano said.

New stores slated for 2015 are in Evergreen Park, Northbrook, Skokie, a second Glenview site and at the former New City YMCA near the Lincoln Park neighborhood.

If a new store gets built at the old U.S. Steel site, it would likely occupy a prime spot formerly occupied by a Solo Cup factory at 87th and South Shore Drive, sources said.


Twitter: @sandraguy

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