Northern Michigan grocers could benefit Caitlin Costello

September 21, 2009
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LANSING — Improved health and more jobs are among the benefits seen for northern Michigan if tax breaks are given for opening grocery stores in underserved areas, according to the Department of Agriculture.

Underserved areas stretch throughout the state from rural communities to the city of Detroit. They have low or moderate incomes, below-average “supermarket density” and limited access to stores because of travel distance.

One grocery store chain primarily in northern Michigan welcomes the program. “With us putting in a new store, this could be huge,” said Paul Freeman, part-owner of 12 Save-A-Lot stores throughout the state.

The law, which offers tax breaks for up to 10 years, was passed a year ago, but eligibility criteria were only recently released by the Agriculture Department. The department estimates that 3,020 jobs and 20 new supermarkets could result from the program within two to three years.

Some urban areas also have convenience stores but no grocery stores that offer fresh produce.

“Grocery stores provide access for healthy foods and home supplies and are essential to be located in cities,” said Sen. Jason Allen, R-Traverse City, a co-sponsor of the law.

Grocery stores that open or expand in underserved areas and sell a set percentage of fresh or frozen produce, meat, poultry and dairy products can apply for the tax breaks.

“If you don’t have to pay taxes for 10 years, you can use that money for overhead costs and expansion,” said Jane Shallal, president of the Association Food and Petroleum Dealers Inc. in Michigan.

Karen Gobler of the Michigan Grocers Association hesitated to predict what the new law might mean for her industry. But she said it is a good program and only time will tell.

“Other tax incentives have been offered before, but this is a new twist, now that retail food stores will qualify,” said Gobler.

Shallal said local farmers and wholesalers will also benefit from the program because increased demand for products means increased revenue.

Fresh food will give consumers an opportunity for healthy lifestyles and help prevent diet-related disease, according to the Healthy Kids, Healthy Michigan program in the Department of Community Health.

“We think we can improve the public health situation in Michigan by broadening access to healthy food that families need,” said Robert Craig, director of agriculture development at the Department of Agriculture.

Over half of Michigan’s population is underserved, according to the U.S. Census, and have limited access to grocery stores.

Craig said local governments must apply for the tax incentive on behalf of grocery stores. A local government is not required to participate in the program, however, as it would lose property tax revenue under the program.

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