CINCINNATI - The Kroger Co. is taking a page out of the 3CDC handbook to bring fresh and nutritional foods to low-income neighborhoods in seven states, including Ohio.
The Cincinnati-based grocery chain won a $20 million allotment from the federal New Markets Tax Credit Program Wednesday.
That's an economic development program, run by the U.S. Treasury Department. It allows certified development funds to sell federal income tax credits to investors. That raises money that can be invested as gap financing in low-income neighborhoods.
New Markets Tax Credits have been used by the Cincinnati Center City Development Corp, or 3CDC, to finance several development projects in downtown and Over-the-Rhine. Kroger's retired Chairman and CEO Joe Pichler helped launch 3CDC in 2003 and still serves as its vice chairman of its board of directors.
Kroger spokesman Keith Dailey said the company entered the competitive process for New Markets Tax Credits for the first time this year. He was unable to provide additional details.
Kroger's $20 million allocation was among $3.5 billion in awards announced April 24, including $145 million for five recipients in Ohio.
Kroger said in a press release that the Kroger Community Development Entity will utilize these tax credits to increase access to healthy, affordable food options and provide jobs and training for residents in lower income communities nationwide.
"Here in Cincinnati, we have invested in urban communities," said Lynn Marmer, Kroger's group vice president of corporate affairs. "We partnered with the City of Cincinnati to completely rebuild a store in East Price Hill and we are working to build a new store in Corryville."
Marmer said Kroger's real estate team is still working out details on how the tax credits will be used. She said the Corryville store, at the south end of Short Vine Street near the University of Cincinnati, could be the first project to benefit from the credits.
Marmer also said that an estimated 1,350 jobs would be created as a result of the investments that will be made from these funds.
The Cincinnati Development Fund won a $35 million allocation to invest in brownfield redevelopment, nutritional access programs and educational improvement initiatives in Southwest Ohio. CDF operates a lending consortium through which local banks finance housing developments in low-income neighborhoods.
An online summary of tax credit awards said the Kroger Community Development Entity LLC would "increase access to fresh and nutritional foods for low income residents in distressed areas" in Ohio, California, Georgia, Kansas, Tennessee, Texas and Virginia. It said Kroger's investments would "anchor local redevelopment and spur additional benefits to low-income community residents."
The Treasury Department teamed up with the U.S. departments of Agriculture and Health and Human Services to make New Markets money available for the Healthy Food Financing Initiative. The program is described by Treasury as the government's "first coordinated step to eliminate ‘food deserts,'" which are low-income neighborhoods where access to affordable and nutritious food is limited.
More than 80 percent of New Markets awardees pledge to spend at least some portion of their tax credit proceeds to "a wide range of interventions, including increasing the distribution of agricultural products; developing and equipping grocery stores and strengthening producer-to-consumer relationships."
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