More on the City’s $900,000 Grant to the Closing Yes!
My column today looks at the upcoming closure of the only Yes! Organic Market east of the Anacostia River and its implications for future retail in the area. But due to space constraints, I wasn't able to delve too deeply into the history of the $900,000 grant the city provided in 2010 for Yes! owner Gary Cha to open the Fairlawn location. (It's also worth noting that the store received tax credits through the Supermarket Tax Exemption Act of 2000, which gives several tax exemptions to supermarkets in Priority Development Areas.) So for those interested, here's a bit more on that, courtesy of a conversation I had with Jared Kahn, the project manager responsible for the grant at the Office of the Deputy Mayor for Planning and Economic Development.
"What our whole premise was was solving a major fundamental issue where there’s a total lack of healthy food options east of the river," recalls Kahn, who now works for the Maryland-based real estate developer Guardian. "The city had just, through tax credits, helped [developer] Tim Chapman construct this marvelous housing development right across the river. And he was having trouble filling his retail space."
Chapman was having trouble finding a high-quality tenant for the ground-level space, and so the city stepped in to help. Kahn says his office conducted a thorough analysis of the area before providing the grant to Yes!
"We sort of looked at what it would take, having all players have enough skin in the game to make this happen, and within the confines of our budget, and what type of results it’d yield," Kahn says, referring to the fact that this wasn't just the city's money on the line; Cha lost nearly a million dollars on the venture. "Would it help solve that problem of a lack of healthy food options? Would it create local jobs? And would it be a harbinger of more development?"
Kahn says his team's analysis found that the Yes! idea made more sense than funding for many other businesses from west of the river, based on grocery access in the area, job creation, and tax revenue.
One of the main reasons for the store's struggles is the difficulty of accessing it: There's no left turn into the store for westbound drivers on Pennsylvania Avenue; for drivers coming from over the bridge, it's very hard to return home. Kahn says that was taken into account.
"I had a few guys from the [District] Department of Transportation come to an ANC meeting, and I think they came to two or three, to discuss that," he remembers. "Also, I had them walk the site with the ANC chair and myself. I had them run an analysis of what it would take. It was extensive, it was expensive."
In the end, he says, "everyone concluded that this doesn’t change the fact that there’s over 30,000 cars that drive by it a day. Not just on the far side—on the side with access. That in itself is pretty compelling to any retailer."
So why did it fail? Kahn offers two explanations. The first is macroeconomic—people don't have as much disposable income as they did before the recession, and that's a tough environment for retail.
The second is neighborhood-specific.
"If you look at most of the other stores that Gary owns, Gary’s gone into areas that were lacking in demand and had tough barriers to entry, but then later more people came to the area, so you had more foot traffic and demand," Kahn says. "And if you look at this project…it never happened in the time frame that he opened up. The landowners adjacent to this development, they haven’t been really eager to move forward and do anything." Some nearby properties are vacant, he notes.
"There was that catalyst that was missing," he continues. "Everyone was optimistic that Chapman’s development and the Yes! would be that spark." But outside of Chapman's development above the Yes!, he says, it's a fairly low-density neighborhood, with single-family homes, and ultimately the demand wasn't there.
Still, Kahn's optimistic that there will eventually be a good successor to the Yes! in that space.
"It’s a shame. I think, though, it’s only temporary. There’s still a beautiful, built-out store," he says. "I’m hopeful and optimistic that there’s a silver lining."