Rural farming communities across the Midwest fuel the United States’ agricultural engine, but there’s an underlying contradiction in America’s breadbasket. Despite being surrounded by vast swaths of land filled with wheat, corn, soybeans, and other crops that feed the rest of the country, an estimated five million Americans in rural areas must travel more than 10 miles to find healthy, affordable food at a grocery store. The U.S. Department of Agriculture classifies the communities in which these individuals live as “food deserts,” but the day-to-day experience is better characterized as food apartheid.
In a Nutshell
What: The opening of the Grand Avenue Market, the first full-service grocery store in the community in 20 years. With the support of the Kansas Healthy Food Initiative (KHFI), a group of community residents developed the grocery store with the understanding that the rural community needed one to remain viable. To do so, they formed a nonprofit organization to develop, own, and operate the store, working tirelessly over the course of two decades to secure the funding and financing necessary to bring their vision for the store to life.
Sector: Healthy foods
Location: Plains, KS
Size: 9,300 square feet
Cost: $2.073 million
Funding Sources: IFF, Heartland Tri–State Bank, U.S. Department of Agriculture, borrower equity (sourced from the Kansas Department of Commerce, Sunflower Foundation, and KHFI, among other funders)
IFF Support: $630,458 loan through participation in KHFI (supported by funding from the Healthy Food Financing Initiative) + a $30,000 KHFI grant
Design: Roger Angell (exterior) & Associated Wholesale Grocers (interior)
General Contractor: JKL Construction
Impact: Creation of 4-6 permanent full-time jobs, 8-10 permanent part-time jobs, and the elimination of food apartheid in Plains
Though this affects residents throughout the Midwest, few places better exemplify the challenges faced by rural communities in sustaining local grocery stores than Kansas. Although there are more than 45 million acres of farmland in the state, residents in approximately one out of every three counties in Kansas must travel outside of their communities to find nutritious food at a grocery store.
The absence of grocery stores in these communities contributes to unhealthy eating habits as residents have limited options for nutritious food, but it also affects the economic outlook for the communities themselves. As the New York Times explained in a front-page story in 2019, the exodus of grocery stores in rural communities – driven by declining populations and stiff competition from low-cost chains in surrounding areas – often leads to the loss of additional community assets like schools, hospitals, and other local businesses.
That was the impetus for IFF partnering to launch the Kansas Healthy Food Initiative, a public-private partnership to improve access to healthy foods in Kansas communities by providing access to flexible capital and technical assistance for the development or expansion of locally owned grocery stores (see the sidebar at the end of the story for additional details about KHFI). Since its founding in 2017, KHFI has supported 40 projects in 30 counties with a total of almost $3.2 million ($2.2 million in loans and $1 million in grants).
KFHI recently provided the critical final source of financing necessary to open a new grocery store in the southwest Kansas community of Plains, a project that illustrates the value of full-service grocery stores to rural communities.
Keeping Plains on the map with the Grand Avenue Market
When the local grocery store in Plains, KS, closed in 2001 after the death of its longtime owner, it was immediately apparent to community members just how vital the store had been to this community of roughly 1,200 residents.
In its absence, many residents began to rely on local convenience stores for their food, but their limited options and largely unhealthy offerings were a barrier to healthy eating. For anything more, residents were forced to drive 29 miles round trip to get groceries at the closest full-service store in Meade, KS. This caused a cascade effect in which the population of the town declined, small businesses suffered, and new challenges appeared – like attracting qualified teachers to the local school district.
For many rural communities, that might have been the end of their stories. But for Plains, it marked the beginning of an extraordinary 20-year effort that culminated this month with the opening of the Grand Avenue Market.
The 9,300-square-foot grocery store offers fresh produce, a meat department, and ingredients prepped for customers to include in home-cooked meals. With an on-site commercial kitchen, the store will also sell fully prepared meals that help reduce waste and create an additional revenue stream for the start-up operation, as will renting out its space to interested organizations and businesses in the community. Grand Avenue Market also plans to offer on-site nutrition education classes, will deliver prepared meals to seniors in the community, and is partnering with a pharmacy that will visit on weekdays with prescriptions.
Getting to the ribbon cutting for the Grand Avenue Market, however, required significant patience from a core group of residents integral to the project, the ability to learn on the fly, and a refusal to give up in the face of repeated setbacks.
For the first several years after Plains’ previous grocery store closed, residents hoped another grocer would open a store since there was no competition nearby. That never materialized, however, and by 2008 Plains’ City Council tasked a committee with exploring the town’s options to re-establish a local, full-service grocery store.
Making new contacts and asking questions are what made the project possible in the end. If you don’t ask for help, you don’t get anywhere, and none of us were afraid to ask.
The committee considered providing incentives for existing grocers to open a new store and establishing a co-op owned by community members, but these and other options didn’t seem quite right. But after attending a Rural Grocery Store Initiative event at Kansas State University, committee members learned about another small town that had formed a community foundation to re-establish a local grocery store. With that inspiration, the Community Enhancement Foundation of Plains (CEFOP) was launched to advance Plains’ efforts to open a new store, employ the grocery store’s staff (1 full-time manager, 3-5 full-time employees, and 8-10 part-time employees) once opened, and to reinvest any profits from the store into additional community-driven projects.
After receiving nonprofit status and developing a business plan, CEFOP began pursuing public and private funding for the Market, gaining traction by securing awards from corporations and private foundations, as well as tax credits from the Kansas Department of Commerce. With cash on hand, the organization acquired a new property in downtown Plains on which to build the Grand Avenue Market.
“The process took a lot of patience, because none of us knew how to develop or run a grocery store when we started,” recalls CEFOP President Jeanne Roberts. “But making new contacts and asking questions are what made the project possible in the end. If you don’t ask for help, you don’t get anywhere, and none of us were afraid to ask.”
Not being afraid to ask and relentless networking paid off in a major way for CEFOP in 2017, when the organization was awarded a USDA Rural Economic Development Loan for its project. Designed to create jobs and spur economic growth in rural communities, the zero-interest loans are provided to local utilities providers who then pass the capital through to eligible recipients in the community. CEFOP was awarded $852,000 for the project through Pioneer Electric, covering more than 40 percent of the total expected costs ($2.073 million) to build the Grand Avenue Market.
Not that the triumph was without challenges.
To receive the capital, CEFOP had to acquire a declining balance letter of credit from a bank to secure the USDA loan (guaranteeing that the bank would pay off the loan if CEFOP defaulted and foreclose on the grocery store to recoup its losses). CEFOP had secured the letter of credit, but when their bank was acquired, the new owner declined to honor the letter of credit, putting the USDA loan in jeopardy. CEFOP, in fact, was turned down by a dozen banks before finally receiving a new letter of credit from Heartland Tri-State Bank in Elkhart, KS.
We had everything in place by the time we approached KHFI but were still short, and the loan through IFF was the last piece of the puzzle.
“We felt defeated after losing the letter of credit and being turned down by so many banks when we needed a new one, and Heartland Tri-State Bank signing on to the project was the turning point,” says Roberts. “They believe in small towns helping each other and recognize that if we don’t all stick together, rural America is going to die.”
Around the same time, CEFOP contacted KHFI about a loan to cover the costs of equipment for the Grand Avenue Market. While waiting for the $630,458 loan from IFF to close, CEFOP finalized the design of the new grocery store with the support of local architect Roger Angell and Associated Wholesale Grocers. In November 2020, the KHFI/IFF loan for the project closed, clearing the way for JKL Construction to begin building the facility that the residents of Plains had been actively working toward for more than a decade.
“One of the challenges all the way through this process was that we would get bids, but by the time we raised the money we needed, the bids would be higher,” says Roberts. “We had everything in place by the time we approached KHFI but were still short, and the loan through IFF was the last piece of the puzzle.”
“There have been a lot of people that have worked to make this grocery store a reality, and we couldn’t have done it without each of them,” Roberts continues. “Everybody did their part, and the community stood behind us, cheered us on, and was there with a helping hand whenever we needed it. The building is just amazing, and so uptown for a small town like Plains. It’s going to breathe life back into our community.”
The building is just amazing, and so uptown for a small town like Plains. It’s going to breathe life back into our community.
Learn more about how the Kansas Healthy Food Initiative is increasing access to healthy food and eliminating food apartheid in communities like Plains by watching this short video.
About the Kansas Healthy Food Initiative (KHFI)
KHFI members include:
- The Food Trust, a national organization focused on food retail for underserved populations
- IFF, which manages the loan fund
- Kansas Health Foundation, which provided the $3 million investment to create the initiative in 2017 and an additional $3 million in 2021, while also providing expertise in health issues related to food access
- Kansas State University’s Rural Grocery Initiative, which works directly with food retail outlets and other organizations to improve food access in high-need areas
- NetWork Kansas, an organization devoted to the growth of entrepreneurship and small businesses throughout Kansas
Tags: : Capital Solutions, Healthy Foods