The Organic Verses
There were just two shoppers at the Yes! Organic Market in Fairlawn last Friday afternoon. Entire aisles of refrigerated shelves were empty and dark, never to be refilled.
“This is the healthiest place to go,” said Lachuna Johnson, 24, who lives near Good Hope Road SE in Anacostia. “The other places have more artificial food. Today, how kids grow up, they eat a lot of fatty foods, they get obese. Stores like this really help.”
Soon, Johnson will have to find somewhere else to shop. Owner Gary Cha plans to close Yes!’s struggling Fairlawn location in early December, ending the two-plus-year run of his only store east of the Anacostia River, despite a $900,000 grant from the city.
The demise of Yes! is inconvenient for the store’s few regular shoppers. But for neighborhoods in the eastern part of the District, the implications could be much more profound.
“I think that it’s unfortunate that the residents who were asking for this type of retail service didn’t show up in great numbers,” says Derrick Woody, who helped arrange the city’s grant for Yes! while working in the Office of the Deputy Mayor for Planning and Economic Development, “because it does set a precedent for other retailers who are looking into that market.”
The historically poor area has seen some recent successes. To the south of Fairlawn, Anacostia’s second business incubator is opening this Thursday, joining an increasingly vibrant strip of galleries and shops that are slowly filling in that neighborhood’s many empty storefronts. To the north, at Minnesota Avenue and Benning Road NE, Donatelli Development is working on a big mixed-use building to mirror its developments in Columbia Heights, adjacent to the new Department of Employment Services headquarters. Two planned Walmart stores east of the river could reshape the area’s commercial landscape, for better or worse.
But retailers, developers, and brokers who had an eye on locations in wards 7 and 8 might think twice now. After all, here was a thriving grocery chain with six successful D.C. locations west of the river and one in Hyattsville. The store’s model was built largely on the idea that by moving to underserved areas, it could gain a reliable customer base without facing grueling competition. And it had worked in two other neighborhoods once thought to be unsuited to higher-end shops.
“In Petworth and Brookland, when we opened the stores there, they were surprised we didn’t put any metal bars on the windows,” Cha says.
Those successes were all achieved without city grants. But east of the river, even with nearly a million dollars in government backing and a dearth of other nearby grocery options, the store couldn’t get off the ground. What reasonable person wouldn’t conclude that the area can’t yet support this kind of retail?
Well, just about everyone close to the project. The building’s developer, city officials, D.C.-area brokers, and Cha himself all insist that the Fairlawn store’s shortcomings were unique, the product of its particular business plan or the difficulty of accessing its location, just east of the John Philip Sousa Bridge on Pennsylvania Avenue SE. Retail east of the Anacostia still has a bright future and strong investment potential, they maintain, and the city should continue to spend money to help it along.
All evidence indicates that they’re right. But will the people with the power to reshape the city’s eastern neighborhoods listen?
Cha is heartbroken by his store’s closing. “I feel bad about letting people down east of the Anacostia,” says Cha, who opened his first Yes! in Adams Morgan in 1983, “because they were very excited, as I was, to be able to bring the first organic market east of the river. People always talk about not having enough access to healthy food options. We did provide that for two and a half years, and I guess it’s my lack of skill, or whatever that is.”
From the start, Cha knew that the Fairlawn location wasn’t going to be a typical Yes! “We operated that store with much smaller profit margins, because I know the income level is not as high as in Northwest,” he says. “My goal was to bring good food and more affordable prices. Pretty much all the things, we sold for less.”
He had no illusions about turning huge profits. “I didn’t think we were going to make a whole lot of profit,” he says. “I was hoping we could break even.”
In the end, Cha says, he lost nearly a million dollars of his own money on the store. He points to his personal financial stake as evidence that the city’s $900,000 grant for the store wasn’t a risky attempt to prop up an unviable venture, but rather an investment in a proven businessman who had a significant interest in seeing the store succeed.
“When I was willing to invest that much money, it’s not like the city’s giving me the store,” says Cha. “We sort of saw the same thing, and they said, well, if the Yes! Organic is willing to invest that much...”
“Gary’s got $700,000 or $800,000 of his own money in this,” agrees Tim Chapman, the developer of the building that houses the Yes!, who once planned a broad partnership with Cha to bring Yes! stores to other low-income areas. “That money’s gone.”
Chapman insists that Cha didn’t simply open the store on the basis of the city’s generosity, given all he had to lose. But Cha does say he wouldn’t have started a branch there without the city’s help. “Had I not gotten the support from the city, it would have been too much of a risk,” he says.
That raises the question of whether a grant of this sort can trump the market fundamentals that generally determine if and where a retailer opens a store. But more than that, it questions the city’s rationale for providing the grant. After all, it came in the waning days of Mayor Adrian Fenty’s administration, when he was struggling to attract the support of east-of-the-river voters in the upcoming mayoral primary. (Fenty cut the ribbon at the store’s grand opening and declared himself “thrilled” to usher “fresh, nutritious food at an affordable price” into the area.)
You’d think any District study should have at least yielded one conclusion: The store is really hard to access. Cha intended for the store to serve mostly customers living east of the river, but for those approaching from the east on Pennsylvania Avenue, there’s no way to make the left turn into the store’s parking lot. And for people coming from the bridge to the west, getting to the store is easy, but leaving is hard: Drivers are forced to turn right onto eastbound Pennsylvania Avenue, where there’s no U-turn allowed at the first few intersections.
But Jared Kahn, who was the project manager for the Yes! grant at DMPED, says the city conducted an extensive analysis that found enough upsides to the location to override the access issue.
“Everyone concluded that this doesn’t change the fact that there’s over 30,000 cars that drive by it a day,” Kahn recalls. “Not just on the far side—on the side with access. That in itself is pretty compelling to any retailer.”
But just about everyone else I spoke with, from brokers to city officials to Cha himself, pointed to the access issue as a reason, if not the reason, for the store’s struggles. It was enough of a concern for Cha that he spoke with the District Department of Transportation about improving access to the store. “They came out and looked at it, and they thought they were able to remove one of those U-turn signs,” he says. “But that wasn’t really conclusive, and they needed to do some more study, and it ended at that.”
DDOT spokesman John Lisle says he is not aware of any such plans, but notes that they could be problematic. “You’d be essentially permitting people to block traffic to make a potentially dangerous U-turn into heavy traffic,” he says.
Citing the tricky location, brokers make the case that the store’s failure shouldn’t discourage further development east of the river.
“The challenge with Yes! Organic was access to that space,” says Mike Howard, a broker with Rappaport. “At the end of the day, they were sandwiched between a Safeway at Good Hope Marketplace and a Harris Teeter at Jenkins Row, and both had more traditional parking arrangements.”
Chapman is insistent that the closure of the Yes! represents only a failure of that particular store’s business model and doesn’t reflect poorly on the viability of retail in the area. Of course, he’s compelled to say that: Come December, he’ll have a big empty storefront to fill.
But David Zipper, who leads DMPED’s business development team, maintains that the city will continue to invest in retail east of the river. “We remain bullish on the future of retail opportunities and resident-serving businesses east of the river,” he says, “and we’re going to push them.”
Even as he prepares to shut the doors on the Fairlawn Yes! for the final time, Cha says he hopes to open another store in the area before long. “East of the river, I think, is a great place to do business,” he says. “And I think if I find another location with easier access, I may be the first going back there.”
The demand is there, he’s sure. Ever the self-critic, Cha just believes he needs to step up his game. “I know there’s a need for grocery stores,” he says. “I have to be a better businessperson. I just have to be better.”
Cha’s contrition may approach entrepreneurial self-flaggelation, but no one else is willing to say a bad word about him. Chapman calls him “very bright,” “pioneering,” “a gentleman,” and “one of the nicest guys I’ve ever met.” The word “decent” comes up in just about every conversation about the man. Multiple sources asked me to go easy on Cha, given all that he’s been through.
One of those sources was the crestfallen Cha himself, who meekly pleaded not to be made out as a villain. “I hope the story is not too negative,” he says, “because I really did try the best I can.”
Photos by Darrow Montgomery