by Kristen Cloud/staff writer
It took years before the only grocery stores in Cordova and Hackleburg reopened following the devastating tornadoes of April 2011. The Piggly Wiggly in Cordova opened in late 2014. The owner of the Piggly Wiggly in Hackleburg decided not to rebuild but, finally, in late June 2015, the town of Hackleburg got its grocery store: the Hackleburg Market.
Why did it take so long for Cordova and Hackleburg, once named the best hometown in America, to rebuild their sole sources for groceries? Not only were both towns leveled by the tornadoes, creating a daunting task for their governments and residents but, as is often the case when it comes to natural disasters, funding was an issue. In particular, the Alabama Department of Commerce does not provide money for retail.
That’s partly why, last year, the Alabama Grocers Association (AGA) helped lead a coalition in an effort to get the Healthy Food Financing Act passed. With strong bipartisan support, Gov. Robert Bentley signed the legislation into law on June 30. The legislation created the structure for a statewide revolving loan fund program, administered in partnership with the Alabama Department of Economic and Community Affairs, to provide incentives to develop, renovate or expand grocery stores in communities with limited access to fresh, healthy food.
The legislation is designed to assist food desert communities; approximately 1.8 million Alabamians, including nearly half a million children, live in areas with limited access to healthy food. But, as AGA President Ellie Smotherman Taylor notes, if the legislation had been in place in 2011 when the deadly tornadoes ravaged parts of the state, the grocery stores in Cordova and Hackleburg would have been up and running much more quickly.
“We saw that need after the tornadoes,” Taylor tells The Shelby Report. “We knew we had to do something—not only with food desert areas and underserved areas, but also for something like a devastating tornado or a hurricane. We’re in the South, and we face these disasters all the time, so we needed some kind of financing to help get stores up and running.”
Sen. Greg Reed, who serves the Walker County area where Cordova is located, championed the bill on behalf of AGA and other groups like The Food Trust, Voices for Alabama’s Children and the American Heart Association.
The Healthy Food Financing Act will provide grants and loans to supermarkets, farmers markets and other fresh food retailers for the expansion and preservation of stores in underserved areas of rural and urban Alabama.
This year, Taylor says, AGA and others will go back to the legislature to try and secure funding for the act. She points out they’re also seeking public and private funding for the program.
“We hope to get at least $5 million into it this first year,” she says.
Hoping for an easier budget season
It would be hard to argue that Alabama’s 2015 legislative session didn’t pose its share of difficulties. The state faced a $700 million deficit in its general fund budget and, while it managed to pass its education fund budget, its regular legislative session was followed by two special sessions. In all, the legislature was in session until September.
“We ended up basically passing $160 million in additional tax revenues—with a 25-cent tobacco tax and some increased provider taxes under nursing homes and pharmacies,” Taylor says. “The rest of the millions that we were behind in the general fund budget came from cuts on state agencies.”
She adds, “We are hopeful that this year we are not that far behind in the budget; the official numbers have not been released from the governor or from the department of revenue (at the time of this report), but we are hopeful that we are nowhere near the $700 million range like we were last year.
“We are also hopeful that we will not have to face the types of tax increases that we faced last year—soft drink taxes, the removal of the sales tax discount on retailers, which would have cost the retail community $50 million, other tobacco product taxes and e-cigarette taxes—just to name a few,” Taylor says.
Other likely 2016 issues
• Minimum wage: The Birmingham City Council passed a minimum wage bill in 2015 that will take the city’s minimum wage to $10.10 by 2017.
“We expect a bill to be filed by Rep. David Faulkner out of the Birmingham area to prohibit cities and counties from increasing their minimum wage and for it to be retroactive to counter the actions by the city of Birmingham,” Taylor says.
• Privatization of liquor at retail and wholesale: Legislation failed in 2015 to take the state out of the retail liquor business, but the new Alcoholic Beverage Control Reform Tax Force is studying the issue and the outcomes in other states, al.com reports. The Alcoholic Beverage Control Board currently operates more than 170 retail stores and controls wholesale distribution in Alabama. Some of those stores also serve as wholesale outlets, selling to bars, restaurants and private package stores. The ABC Board licenses more than 500 private package stores, which buy their products from the ABC Board.
• Earmarking of state funds: “This is one of the reasons we have so much trouble with our general fund within the state of Alabama—about 85 percent of the general fund is earmarked already,” Taylor says. “There’s going to be a lot of talk about the un-earmarking of those funds.”
• Constitutional amendment to allow for gambling in Alabama: The state has considered, and likely will consider again this year, allowing gambling in the state, whether through a lottery and/or casinos. Taylor reveals AGA isn’t necessarily opposed to either option.
“It would be a constitutional amendment that people would vote on,” she says. “Our concern with doing a lottery, of course, would be if it was sold in the stores we would want to make sure we received some kind of a discount for taking up the lottery tickets and be compensated for the selling of the tickets.”
• Combining budgets: Unlike the deficit the state has encountered with its general fund, its education fund has a surplus. Because of this, Taylor says there has been talk about potentially combining the budgets.
Alabama dominates in economic development
The legislature passed several economic development bills in 2015, and the state’s work to attract business and spur additional growth is paying off. Business Facilities Magazine, in fact, named Alabama the 2015 State of the Year for economic development.
A Remington firearms plant debuted in Huntsville last year, and a new $127 million Polaris off-road vehicle factory is slated for an early 2016 opening in the area. Additionally, a $600 million Google data center is coming soon to Jackson County, also in the northern portion of the state. Mercedes is expanding as well, with other companies poised to move into the state alongside that expansion.
“Things are definitely looking good for the state for the future,” Taylor says, “and we look to build on that.”
In tandem with the economic and job growth in manufacturing comes growth in retail—with both new players coming into the state and the expansion of existing companies.
Phoenix, Arizona-based Sprouts Farmers Market, for instance, debuted in Alabama in 2015 with three stores in Birmingham, Hoover and Madison. The company plans to open in Vestavia Hills, at 1031 Montgomery Highway, in April.
Trader Joe’s, headquartered in Monrovia, California, opened its first Alabama store in October in Birmingham. The 12,600-s.f. store is located at The Summit at 209 Summit Boulevard.
Taylor notes that grocers like Aldi, The Fresh Market, Whole Foods and Publix are expanding, too.
Lakeland, Florida-based Publix added several new stores in the state in 2015, bringing its total store count in Alabama to 61.
In December, the grocer broke ground on a new store on Highway 231 in Troy; it is expected to open in late 2016 or early 2017.
“There have also been several independent stores that have expanded in the state,” Taylor says. “We’re excited about the growth within our state.”
*Editor’s note: Read more about Alabama in the state’s Market Profile story, which appears in the February 2016 print edition of The Shelby Report of the Southeast.