When Vallarta Supermarkets opened a new store in West Fresno in the fall of 2016, the surrounding community had been without a full-service…Read More
|Northern California Community Loan Fund, Maya Cinemas CDE|
|$13 million in NMTCs|
When Vallarta Supermarkets opened a new store in West Fresno in the fall of 2016, the surrounding community had been without a full-service grocery store for over 15 years. Located at the intersection of Clinton Ave and Weber St, the new Vallarta store will serve nearby economically distressed neighborhoods where the majority Latino residents have other few options to buy fresh, healthy, and affordable food locally. Vallarta has deep experience serving Latino markets, providing a range of culturally appropriate fresh produce, meats, seafood, and groceries alongside an in-house bakery, tortilleria, and taqueria. Founded in 1985 in Van Nuys, the family-owned grocery chain has grown to 50 locations across Southern California. While seeking to be recognized as a mainstream, full-service supermarket, not an ethnic market, Vallarta’s leadership is committed to serving low-income communities where the need for healthy food is greatest. “If you compare zip codes, some will have longer life expectancy rates than the other zip codes, and you’ll find the ones with the lower rates do not have a lot of fresh food options,” Rick Castillo, Director of Marketing at Vallarta Supermarkets, emphasizes. Regarding the new West Fresno store, Howard Kaminsky, Vallarta’s Chief Financial Officer, states, “We wanted to provide a service to the community. It’s satisfying to open a new store that provides local residents a destination to purchase fresh food, vegetables, and meat.”
West Fresno entered Vallarta’s radar through a former employee who now works for Maya Cinemas, a local movie theater chain and developer. Maya Cinemas, which also focuses on serving Latino communities, saw a need for a supermarket in West Fresno and invited Vallarta to anchor a larger a shopping center development the cinema chain was planning. Even as a team of successful businesses, Maya Cinemas and Vallarta were not able to secure traditional financing to build the much needed $13M shopping center the lower income neighborhood. Enter FreshWorks, created to address the problem that the same zip codes that need healthy food the most are often ones where it is hardest to find traditional financing and investment. “The key was that this project was in Fresno in a community that was underserved,” states Ross Culverwell, Chief Lending Officer of NCCLF, the administrator for FreshWorks. “West Fresno, didn’t have anything but small mom and pop grocery stores. It didn’t have a full service grocery store and not one that served the Latino community,” Culverwell explains. He believed the project held potential for success with Maya Cinemas’ experience and leadership as local developers and Vallarta Supermarket as an anchor tenant for the larger shopping center.
FreshWorks and NCCLF brought both capital and experience to support Maya Cinema and Vallarta in navigating the New Market Tax Credits (NMTC) process. As Culverwell explains, “Dealing with NMTC is not rocket science, but it’s more complicated than it should be. So working through that structure in a way that makes sense, that in itself can be a substantial job.” Kaminsky echoes the importance of FreshWorks’ experience stating, “Before FreshWorks Fund, I didn’t know about NMTC. It was our first NMTC project.” In partnership with Maya Cinemas, NCCLF enabled Vallarta to access NMTC investment, which drastically reduced the loan debt needed to build the $3M store, enabling the supermarket chain to expand operations into this West Fresno community.
“The store opening in West Fresno was one of the largest grossing sales we’ve seen,” proving, as Kaminsky said, “that the community really needed a supermarket like ours.” The store has dedicated a minimum of 3,500-sq. ft. of floor space and 40% of sales to fresh and healthy foods. In addition to bringing healthy food to the community, Vallarta provides 175 jobs, 70% of those jobs are full time and receive meaningful benefits. Local residents are 90% of the employees, and 95% of those employees are Latino. Through the Maya Cinemas Educational Fund, Vallarta will also contribute a minimum of $10,000 in scholarships each year to local, low-income youth pursuing a 4-year degree.
The success of Vallarta and the positive impact to the community clearly demonstrates that low-income neighborhoods can be good investments socially and economically. “It’s a question of equity and justice,” states Culverwell, “promoting a sense of fairness to people in communities who have not had fair access to finance and the development that goes with that.” As Vallarta continues to expand into cities such as Pasadena, they hope to also demonstrate that a grocery store rooted in the Latino community can be successful across markets. As Castillo says, “We don’t want to be a typical grocery store, we are a supermarket for all families.”