It took more than eight years and millions in taxpayer subsidies for the historic Circle Food Store in Treme to reopen after Hurricane Katrina.

Now, just four years after the grocery store and neighborhood landmark returned to business, its owners are on the brink of shutting it down, mired in debt and fighting their own family in court over money they claim was embezzled from the business.

“We’re still here but we’re in bad shape,” said owner Dwayne Boudreaux Jr. as he stood amid the half-stocked shelves of the 80-year old store, which re-opened in 2014 following an $8 million renovation funded largely through bank loans, city-provided grants and more than $4.4 million in tax credits.

On Wednesday morning, the store was staffed only by Boudreaux and his wife, Catrina. A trickle of customers walked through the aisles. Its hours of operation have been erratic and its fresh food areas are now mostly barren.

“I’ve been trying my best to keep it open, but it looks like that might be impossible,” Boudreaux said. “We are just looking at it day to day.”

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Dwayne Boudreaux Jr., proprietor of Circle Food Store, at the 7th Ward grocery on Wednesday, Oct. 17, 2018. After successfully reopening in 2014 following renovations from damage inflicted by Hurricane Katrina, the future of the store is in peril.

The 22,000-square-foot grocery has held a prominent role in its neighborhood for generations and is one the longest-running black-owned businesses in New Orleans, dating back to 1938.

Its return was hailed as a post-Katrina comeback for a community resource. Today, however, a creditor is suing the grocery over a loan default, and the business is itself suing two former managers for financial mismanagement.  

Loans, lawsuits, a flood

One of lenders that funded the store's reopening was First NBC Bank, the local financial institution that collapsed last spring and continues to send ripples through the New Orleans business community. Boudreaux said his loan was acquired by another financial institution which has been more aggressive.

“We opened with the finances upside down to begin with, and it got worse,” he said.

Court documents show that a firm called OSK VII, owner of the First NBC’s promissory note on the Circle Food Store loan, filed suit against the store and Boudreaux in August. The company claims the loans are in default and has asked the court to order payment of principal and interest amounting to $420,282.

Meanwhile, Boudreaux has accused some relatives of stealing money from the family-run business. 

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In May, Circle Food Store filed a lawsuit in Civil District Court against Antoinette Boudreaux, the ex-wife of the proprietor’s father, and Brooke Boudreaux, her daughter (and the proprietor’s sister), accusing them of embezzlement and seeking damages. The suit claims the two women took cash from the store safe. It also claims that Antoinette Boudreaux wrote herself checks for company funds, drew some $14,000 from a company bank account and opened a line of credit for $15,000 and a loan for $155,000 on behalf of the company, but actually for her own use.  

Antnoinette Boudreaux and Brooke Boudreaux have denied the allegations in their response to the court. The case is pending.  

While these issues have been ongoing, Boudreaux pointed to the August 2017 flood as perhaps the last straw for the business. That disaster, spurred by a summer downpour that revealed widespread problems with the city’s drainage systems, swamped the store and knocked out much of its food-storage equipment.

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Circle Food Store, in business since 1938, at the corner of St. Bernard and North Claiborne avenues in New Orleans, La., Wednesday, Oct. 17, 2018. After successfully reopening in 2014 following renovations from damage inflicted by Hurricane Katrina, the future of the store is in peril.

The store is suing the Sewerage & Water Board and the city for damages, one of many lawsuits filed by residents and businesses since the flood. The S&WB has denied responsibility for the damages in its response to the court.

It took months to get all the grocery store's systems running again, Boudreaux said. During that time, the property was hit by copper thieves, adding to the repair costs and delaying its return to operation.

“In the grocery business, you can’t stay out of business for long,” said Boudreaux. “People get used to going somewhere else.”

For generations, however, people had gotten used to shopping at Circle Food Store.

More than groceries

Circle Food Store stands at the corner of North Claiborne and St. Bernard avenues, at the juncture of the city's Treme and Seventh Ward communities. Its exterior has a Spanish mission design, done in white stucco with a terracotta roof line and a shaded colonnade flanking the front.

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Circle Food Store, in business since 1938, at the corner of St. Bernard and North Claiborne avenues in New Orleans, La., Wednesday, Oct. 17, 2018. After successfully reopening in 2014 following renovations from damage inflicted by Hurricane Katrina, the future of the 7th Ward grocery is in peril.

On the inside, however, the store was all New Orleans during its pre-Katrina heyday. It stocked local staple foods and was even known to carry wild game.

Over the years, it evolved into a one-stop shop for a wide range of products and services. The store stocked local school uniforms and also had other amenities, including a pharmacy, a doctor and a dentist for check-ups, and a chiropractor. 

Circle Food Store was built on the spot that was previously home to a public market, part of a network of such food hubs that once dotted the city. One of its produce vendors was Herbert Gabriel, who eventually bought out his competitors and consolidated the market as a full-service grocery. The store took its name from the circular turnaround point for Claiborne Avenue streetcars that once stood at the intersection.

This stretch of Claiborne Avenue was a hub for black-owned businesses in those days, though the area would be radically changed when the interstate was built above the avenue in the 1960s. 

Dwayne Boudreaux Sr., father of the current owner, worked at the store starting as a teenager. He took over the business from its founder in 1995.

When the store reopened in January 2014, customers streamed in and the return was widely hailed as an important comeback. However, Boudreaux acknowledged that the grocery struggled to compete with bigger brands. The initial enthusiasm from local clientele soon faded.

Re-opening the store required millions of dollars in loans and grants. The owners received a $1 million loan from the city’s Fresh Food Retailer Initiative, a program aimed at increasing residents’ access to fresh food. According to reports at the time, $500,000 of the loan was forgivable. 

The city also provided a $100,000 Economic Development Fund grant, and the Louisiana Office of Community Development provided a loan for $1 million. The store also received $2.2 million in historic tax credit equity and $2.2 million in new market tax credit equity.

The store sits astride an area targeted by local officials for revitalization through the Claiborne Corridor Cultural Innovation District. This initiative launched this year with a plan to bring more new entrepreneurs, social services and cultural activity to the corridor running along North Claiborne Avenue.

At Circle Food Store, while surveying the quiet, mostly empty grocery, Boudreaux seemed to be preparing for the end while also keeping his hopes up.

“When I started this I had $3,000 in my bank account, so I feel blessed that we lasted as long as we did,” he said. “I don’t want to give up. I hope we can find a way to stay.”

Follow Ian McNulty on Twitter, @IanMcNultyNOLA.