ShopRite argues the break is needed to “help continue operations at the location.” BDC and other officials who arranged the deal aren’t talking. BREW EXCLUSIVE.
Above: Freshly seeded grass and a large parking lot greet shoppers on the opening day of ShopRite’s Liberty Heights store on . (Mark Reutter)
Hailed by city officials as a capstone achievement to end a “food desert” in an underserved Baltimore neighborhood, the ShopRite supermarket on Liberty Heights Avenue is in financial trouble.
Today the Board of Estimates excused $500,000 from a $2 million promissory note issued to the Howard Park store, which has suffered from lower-than-expected revenues, according to two sources.
The action means that the principal owners, Klein’s ShopRite of Maryland, will only have to pay $600,000 on the loan’s first installment due next month.
The board also agreed today to wipe away the remaining $900,000 (currently due in $100,000 yearly installments) if the store employs “no fewer than 100 Baltimore City residents with gross wages of no less than $2,000,000.”
Translated, that means that Klein’s ShopRite must maintain a city workforce whose individual gross pay would average $20,000 a year over the next nine years.
According to the BOE agenda, the retailer had requested the $500,000 reduction to “help continue operations at the location.” Klein’s is now seeking “a larger refinancing” to keep the store afloat.
The original financing came from a $ million New Markets Tax Credit underwritten by The Reinvestment Fund and City First Bank.
Deferred Purchase
The Klein family has never paid the $2 million purchase price for the six-acre plot on which the ShopRite store sits.
Instead, they were given an eight-year deferral of the purchase price, which itself was a steep reduction from the $4 million-plus the city spent to purchase an abandoned SuperPride store and clear the site at Liberty Heights and Gwynn Oak avenues. (more…)
