A local food hub, granted a $1 million loan from the city’s Fresh Food Retailer Initiative last week, is poised to open a 23,000-square-foot grocery store in Central City in the fall.
The loan is one of a series of efforts by the city to encourage grocers to offer healthy food and fresh produce to neighborhoods that lack access to them.
John Burns, CEO and founder of Jack and Jake’s Inc., said the loan, half of which is forgivable, is a crucial piece of funding for the project, which he estimates will have a total cost of between $17 million and $18 million.
The supermarket will be at the former site of Myrtle Banks Elementary School in the 1300 block of Oretha Castle Haley Boulevard.
A statement from the Mayor’s Office said it would provide 33 full-time and 35 part-time jobs.
“It’s not exactly a typical supermarket,” Burns said. “It’s more of a large public market. It allows us to bring fresh, healthy food in from local farms and into underserved communities, including the neighborhood we are located in.”
Jack and Jake’s is a 6-year-old endeavor that Burns said he began with a few hundred dollars and a desire to bring more nutritious food to the city.
Its website says it is “the first regional food hub in Louisiana capable of connecting local producers with those who need access to fresh healthy foods most. Our mission is to provide high-quality, safe and affordable local fresh foods from regional farmers and fishers to schools, universities, hospitals, and underserved communities.”
Burns started his company with help from the Idea Village and secured funding from a variety of public and private sources.
Since then, he said, it has been helping local farms and fisheries provide food to convention centers, hospitals and restaurants.
The addition of the Central City retail space will allow the company to ramp up its efforts to combat the dearth of supermarkets in the city since Hurricane Katrina.
“Katrina was kind of the one-two punch that removed access to supermarkets in the city,” Burns said. “We thought we could do something to help.”
Jack and Jake’s is the fourth recipient of a loan from the Fresh Food Retailers Initiative, which was launched in March 2011. In partnership with the Food Trust and HOPE Enterprise Corp., the city awards low-cost, flexible financing for vendors to open, renovate or expand retail outlets in areas of the city lacking access to fresh food.
The program is funded with $7 million from federal Disaster-Community Development Block Grant money and $7 million from the HOPE credit union.
Applicants must agree to dedicate a specific portion of their store to selling fresh produce, meat or other groceries.
In a written statement, Mayor Mitch Landrieu applauded the mission of Jack and Jake’s and the work of the program.
“The Fresh Food Retailer Initiative allows us to increase access to fresh food options for our citizens in neighborhoods that need it most,” he said. “Jack and Jake’s is giving citizens the convenience of shopping in their own neighborhood and creating new, permanent jobs.”
The program has had mixed results.
Its first beneficiary, DaFresh Seafood and Produce, which also was in Central City, went out of business in December.
The corner store had opened in August 2012 after receiving a $117,000 loan from the city.
In an interview in June 2013, owner Doug Kariker said he was having problems selling fresh vegetables. “I throw half of my produce away,” he said.
A Tulane University study last year found that selling produce can be difficult for small corner stores and grocers due to low profit margins, short shelf lives and a lack of consumer demand.
Since then, the city has dispensed much larger loans to full-scale grocery stores with more purchasing power and experience.
In August 2012, it loaned $1 million to the Circle Food Store in the 7th Ward and in February 2013 loaned the same amount to the Refresh Project, a 60,000-square-foot development on North Broad Street. The Refresh Project includes a Whole Foods Market that opened in February.
Half of both loans is forgivable.
Burns said that even though he believes corner stores are important to the local food supply, it’s tough for them to make money selling produce.
“It’s hard to sell produce as a small, independent operation,” he said. “It’s more than just trying to add a few bananas and lettuce in a corner store.”
He said Jack and Jake’s will have a fresh produce section “a block long” and that New Orleans is poised to become a trailblazer in providing a model for integrating healthy food into underserved communities.
“Who knows food better than we do?” Burns said. “I think we can be a leader not just in the tasty rich stuff, but the more healthy stuff as well.”