A new South Memphis redevelopment project at the Southgate Shopping Center is expected to improve access to healthy food options in the area, remove blight, and improve the quality of life of the neighborhood. Anchoring the reworked site, entrepreneur Rick James and Castle Retail Group are preparing to open a 31,000-square-foot Cash Saver grocery store in early August.
When Kroger closed the South Memphis grocery at 1977 South Third Street more than six months ago, residents were left with fewer healthy food options. Without a grocery store, the area became a food desert.
“The Southgate Shopping Center is a critical piece in this highly traveled commercial corridor,” said John Lawrence, senior economic development specialist for the Economic Development Growth Engine for Memphis and Shelby County.
“Southgate was once considered the town center for the neighborhood. With more than 55,000 people living within a three-mile radius and median household incomes less than $35,000, it was imperative that the area have healthy, fresh, and affordable food options," he added.
Project developer Belz Enterprises approached EDGE about getting a Community Builder PILOT for the project located at 1977 South Third Street. Belz received a 15-year payment-in-lieu-of-taxes incentive for the project.
“As we looked at the project, we started asking the question, ‘As important as this site is to the city and keeping nutritional food options available to this neighborhood, what other opportunities are there in terms of economic funding to get the store up and running?’,” said Rick James, owner of Castle Retail Group, which operates four independent Cash Saver Cost-Plus Food Outlets in Memphis.
James recently received a $100,000 Inner City Economic Development loan from EDGE to finance the purchase of new equipment for the store. James encouraged the landlord to secure some of the equipment in the store.through an agreement with Kroger.
“Most of the time when a national retailer leaves an inner city site, it’s never the same thing again. It ends up being carved up into different retail or it becomes a different type of store,” said James. “In my experience, if Kroger had pulled all of the equipment out of the store and auctioned it off, it would never be a grocery store again. No grocer would go back into that site and equip it.”
He cites the former Kroger store on American Way Boulevard, which closed five years ago and still sits empty.
“This is not a limited assortment store. We have every national brand you would see in any other retailer,” said James, who claims Cash Saver is the lowest priced supermarket in Memphis. “We pride ourselves on our meat department. We still use skilled journeyman meat cutters in our meat department. We buy all US No. 1 graded produce. The new store will have a deli bakery in it, and it’ll have 30,000 SKU’s of product.”
James became involved with the project because Belz is the landlord for his Cash Saver location in Whitehaven. The new $6.8 million redevelopment plan includes the Cash Saver, two junior retail anchors, and five small retail shops. Currently, about 40 percent of the surrounding retail center is unoccupied.
Renovations on the grocery store are underway now, and James hopes to open in early August.
The first Cash Saver in the U.S. originally opened as a Montesi’s at 1620 Madison Avenue in Midtown in 1960. By the 1990s, it was a Piggly Wiggly, and in 2004 James and his wife bought the store. In 2011, they converted it to a 70,000-square-foot Cash Saver.
“It’s quite a store,” said James. “It was the first one under the concept that we opened, and now there are probably close to 100 Cash Savers operating in the U.S. And nearly every one of those independent operators have come to Memphis to tour the store in Midtown.”
With the new store in South Memphis, Castle Retail Group will own four Cash Saver locations in the Memphis area.