New grocery store planned for troubled development in KC’s ‘food desert’

Teola Powell says she needs a decent place to buy groceries.

“Why should I have to drive to a Wal-Mart, or to Westport, for my groceries?” she said near 31st Street and Prospect Avenue on Kansas City’s east side.

Powell’s long drive will end next summer, the city’s political and business leaders promised Wednesday. They unveiled plans to redevelop the long-troubled Linwood Shopping Center and open a Sun Fresh food market there by mid-2016.

The grocery store will “eliminate, or at least take a big bite out of, the food desert area that’s existed here for a long time,” Mayor Sly James said at a news conference announcing the redevelopment.

City Manager Troy Schulte said the city will spend $950,000 to buy the existing strip mall and parking lot from its current owners, the Linwood Shopping Center Initiative LLC. The company was established in 2012 by Don Maxwell, a developer who has worked in the area for decades.

Last year, Jackson County appraisers said the Linwood Shopping Center properties were worth a combined $499,894, roughly half of the city’s purchase price.

But Schulte said the city’s independent appraisal, and Maxwell’s, were significantly higher. The $950,000 purchase price was a compromise between those two appraisals, he said.

“We’ve never had much success buying property using the Jackson County valuations,” Schulte said in an email.

He said Maxwell — whose company will receive an undisclosed fee for managing the site — will use the sale proceeds to buy and refurbish other properties in the area.

Maxwell could not be reached for comment.

The city will spend an additional $11.05 million to demolish the empty grocery store now on the site and build a new one. The city will borrow the money for the project, then repay the loans with projected taxes generated by the development and a special 1-cent sales tax collected at its stores. It will also use tax credits to provide funds for the project.

The city will lease the property to Sun Fresh for $10 a year but will not provide any subsidies for operating the store.

The proposal marks the climax of a long effort to bring a new, full-service grocery store to the city’s east side. A full-service grocery opened on the site in 1986, but it closed in 2007 following complaints of lackluster service and poor-quality merchandise.

Convincing a new operator to open a store in the center proved extraordinarily difficult. Grocery store profit margins are thin in the best of circumstances. And the store would draw customers from some of the city’s poorest neighborhoods, making the business potentially difficult. James acknowledged the store will face “a little more risk,” but he applauded Sun Fresh for its willingness to open a store in the area.

John Lipari of Sun Fresh said the company did not consider the project especially risky.

“It is a tough market,” he said, “but as you can see, there’s no grocery stores around here. … I know this will do well.”

Current tenants at stores next to the grocery facility should not see major changes, officials said.

This story was originally published May 6, 2015 at 2:45 PM with the headline "New grocery store planned for troubled development in KC’s ‘food desert’."