When the city of Dallas paid a local builder almost $3 million to develop and run a grocery store in a “food desert” where others had failed, many thought it was a bad idea.
Previous efforts to attract grocers to the Highland Hills community in southern Dallas had flopped. And staff briefings at the time acknowledged that the area’s low population density of about 1,200 people per square mile was “an impediment to attracting established grocers.”
Now, four years later, the city is planning to spend more money to bail out the owner by buying the Save U More grocery store.
The city says it’s looking for a new model of food distribution in the low-income community. Staffers say one possibility is contracting with community nonprofits and food banks to provide a mix of services such as food delivery and curbside pickup.
How to address food insecurity in disadvantaged communities is a national problem that cities are grappling with across the U.S. Studies show that lack of access to healthy meals exacerbates inequalities between rich and poor. City officials said in 2017 that nearly 20% of Dallas County’s population faced food insecurity and lacked access to fruits and vegetables in their diet.
The Highland Hills community, which has a median income of about $37,800, is considered a food desert because of its lack of grocery stores. It’s also in one of five zip codes in Dallas County in which health disparities are the most acute, according to a 2019 study by Parkland Health & Hospital System and the county health department.
Dallas City Council members say they are committed to finding a solution, but some question whether buying a grocery store is the best approach.
“We somehow think we’re going to go in with no grocery experience and be able to run this,” council member Cara Mendelsohn said during a recent budget meeting.
Council member Adam Bazaldua said he wanted details on the proposed purchase of the store on Simpson Stuart Road near Paul Quinn College that used to be owned by the Save-A-Lot discount grocery chain.
“I would like to see us not put more money into the same grocery model that isn’t working,” he said.
A spokesman for Mayor Eric Johnson said the mayor was surprised to hear about the buy-out proposal and needs more information.
Eric Anthony Johnson, Dallas’ economic development chief, said the city’s acquisition of the Save U More is necessary to show residents that “we’re not giving up on the neighborhood in terms of providing food.”
Details of the city’s proposed purchase of the store are not publicly available. City staff say they are still in negotiations with the owner, Joseph Kemp, about the price and other terms. They say the plan is to close on the sale by mid-fall.
Kemp, 70, declined to comment when reached by phone.
Council member Tennell Atkins, who several years ago helped secure the city funding for the store that is in his district, called it at the time the “best investment ever done south of the Trinity River.”
“I don’t want the community to not have a grocery store in that area,” he said Monday. “I support a grocery store in a food desert.”
No one would come
Save U More — formerly called Save-A-Lot — is located on the site of a previous grocery store that had closed down.
City staff said in 2014 that a grocery store in that location would bring “needed fresh food and staples to an area that has been defined as a food desert.” The U.S. Department of Agriculture describes that as a low-income area without reliable transportation that lacks a grocery store within a mile.
Prior to the store opening in 2016, some council members warned that spending public money on it would be a mistake.
Council member Lee Kleinman in 2014 was one of those who resisted the idea. He and others insisted there wasn’t enough population density to justify the expenditure.
Kemp became a franchisee of the Save-A-Lot grocery chain when others weren’t willing to come to Dallas. He told The Dallas Morning News in 2016 that he stepped up because he wanted to help the area.
City documents show the total cost of the Save-A-Lot project, which received $2.8 million in city money as well as private financing, came to $4 million. That included land acquisition. The 15,000-square-foot store is currently valued for tax purposes at $772,200.
A representative of Moran Foods, the St. Louis company that owns the Save-A-Lot grocery chain, said the southern Dallas store changed ownership in April 2019 and changed its name. She did not have details as to why.
And city officials did not provide details of the store’s financial predicament.
But a GoFundMe page set up on July 7 for the store by a woman who says she is Kemp’s granddaughter wrote that the Save U More is now an “independently family owned and operated grocery store” that has been struggling financially.
It says the owner is using his own money to keep the store running because revenue from food sales is not enough. The GoFundMe page also says the grocery store is the only one within 8 miles.
“He [Kemp] decided to branch out and invest in a grocery store back in 2016,” the GoFundMe account says. “With COVID-19 affecting the world, it has also affected small businesses and the survival rate of the businesses. Mr. Kemp took a leap of faith at developing a grocery store in the South Dallas area where NO ONE else wanted to set up shop.”
Kemp is “contemplating” selling the grocery store “due to the stress and financial burden.” But his daughter and granddaughter are seeking to raise $600,000 to keep it running “with the potential to expand, especially during a time where our communities are in need of Black-owned grocery stores.”
As of Monday, about $3,400 had been raised. The store’s annual expenses are $650,000, including $200,000 for police security, according to the GoFundMe page.
The city’s original contract with Kemp called for his grocery store to remain open for 10 years.
However, Kemp’s agreement with the city included an “opt-out” after five years if his sales didn’t average $70,000 per week.
Johnson, Dallas’ economic development chief, said the city is under no contractual obligation to buy the store, which has struggled to sell enough product to cover its operating costs, including extra security.
“It was really expressed to us that he was going to continue to struggle to make the store basically work,” Johnson said.
‘Struggling food model’
Jasmine Hightower, 25, said she prefers Save U More to other stores in the area like Fiesta Market and Walmart because the prices are cheaper. Hightower, a Dallas school bus driver, said she’s never had a problem finding food there. On a recent day last week, some shelves and fridges were scarcely stocked, though Hightower said it’s not typically like that.
“I have kids. So, when you’re buying snacks like Tostitos, Walmart is more expensive,” she said.
As Dallas weighs its options for the store, Johnson said he and his staff are researching what other cities have done across the country and speaking with potential community partners.
“We won’t be in the business of operating a grocery store,” Johnson told the council during a recent meeting. “We know it’s a food desert. We know this is a struggling food model that is really not aligned right to that community.”
Johnson called the proposed purchase of the Save U More a “stopgap” measure.
Questions remain, however, about the wisdom of the city’s original plan to subsidize a failed grocery store model.
Kemp, who runs a Duncanville-based construction company called Kemp Repair and Remodeling, or KRR Construction, had no prior experience operating a grocery store. He was paid to tear down an existing building on the site, build a new grocery store and then run the former franchise.
His website describes KRR as a “general contractor, developer, and construction manager with a concentration in multi-family and commercial construction projects.”
Sara M. Albert, a food policy expert, wrote in a 2016 column for The News that big-money incentives from cities aren’t effective at bringing healthy food options to disadvantaged communities.
She suggested that municipalities consider other models like a mobile grocery store, neighborhood farmers markets or a healthy corner store that sells produce, whole grains and dairy instead of alcohol, soda and candy.
The new model could include a kitchen where employees make healthy prepared meals for prices that could compete with fast-food restaurants, she said.
“It is time that we commit economic development dollars to new ideas and those entrepreneurs who are willing to make them work rather than chasing businesses who continually say ‘No,’” Albert wrote.
Linda Roque, a Highland Hills resident, said she doesn’t know what she would do without the store, where she shops for meat, bread and milk.
“If they close the store,” she said, “this is the only thing we have here.”
CORRECTION, 9 p.m., Sept. 1, 2020: An earlier version of this story misspelled the name of food consultant Sara M. Albert. It also misstated the location of the Save-A-Lot grocery store that used to be owned by Moran Foods. The store is located in southern Dallas.
