General Considerations Regarding Site Selection in our Communities
Note: due to SEC Fair Disclosure regulations, we cannot discuss the status of individual locations until we have publicly announced that a commercial lease and related government approvals have been finalized. The following information is general in nature, except where specific historical examples are noted, and thus should not be construed as the Company expressing an interest in, or commitment to, opening a store in a particular town, area or region. A list of our open stores, along with new stores that have been publicly announced, can be found on our website at NaturalGrocers.com/Store-Locations. Also: learn about Tax Increment Funding (TIF) at Washington Park News.
Overall, we strive to be a a catalyst for economic development. We look for areas that are underserved by grocery stores in general and by health food stores in particular. We often serve as an anchor store in neighborhood and community shopping areas. We may also locate near a larger retail complex or along retail-oriented arterial streets.
We bring full time retail positions and support services jobs to the communities we serve. We pay well and offer benefits to the majority of employees. Our stores attracted a large number of customers from the community, who will often stop at nearby stores for other purchases. We offer a full time nutrition education professional in each store who provides education and outreach services to our customers and the community.
We work with landowners, landlords, and developers who have properties available to build on or buildings we can renovate to meet our needs. Each potential site is unique, and each transaction is unique.
We use green building practices and materials in our stores. One key practice is to find distressed but serviceable buildings to retrofit with appropriate heating and cooling technology to decrease its energy footprint. These opportunities also improve the surrounding community by converting blighted, underused properties to economically active businesses. In our Northglenn, Colorado store we were able to install underground geothermal heat capture systems which have eliminated our need for natural gas heating in our stores year round.
Some buildings cannot be reused; they must be demolished and rebuilt. This may be due to structural issues, severe environmental contamination, new building codes, the location of structural walls, traffic access, life safety problems, etc. It is often seems more expensive in the short term to demolish and rebuild, so community members sometimes misunderstand why old buildings are not kept intact. In the long run, a new building will serve its purpose in the best way at the lowest cost for the longest time.
Some buildings have historic or sentimental value that weigh against them being demolished or significantly altered. Whenever possible, we prefer to repurpose existing sites. We have successfully placed stores in 1950’s movie theaters, dairy barns, and urban warehouses. We will also try to keep the exterior reminders of a building's previous life, like the lighted façade on our Casa Linda store and the cow mural in Flagstaff. We try to work with the local community to better understand what matters and what is worth saving.
There is often a conflict between the nostalgic desire to keep landmark properties intact and the economic cost of owning them. For the landlord paying taxes, insurance and a mortgage on a property that is not creating income, the conflict can be quite painful financially. Keep in mind that sometimes the only solution is a major conversion of a historic property simply to make it less cost-prohibitive to own. Often, non-profits, urban redevelopment authorities, or historical societies will come to the aid of a distressed property owner, but even these organizations have to make hard decisions about what to save and how best to save it. Absent a economically feasible plan, many of these sites may sit empty, suffering vandalism or decay until they are too far gone to save or repurpose.
Bookstores, bowling alleys, theaters and similar buildings from industries that are contracting are often good candidates for renovation. Our smaller store size is often compatible with these sites, and surrounding businesses that have suffered from a vacant tenant or underperforming business are usually glad to have these sites revived.
Many buildings from the 50, 60’s and 70’s, however, were built to poor standards and are very difficult for any business to retrofit effectively. You know the look – low, flat roofs bordering roads that have long since widened their lanes, leaving only a few parking spaces in front and dangerous driveway entrances without traffic lights. In addition, buildings from this era are subject to extensive planning, traffic,fire safety, land use and other code reviews and often must be upgraded to meet current municipal requirements. This is always expensive, and sometimes impossible.
As we touched on above, a retail store brings a lot more to a community than rent for the landlord. Jobs, payroll taxes, sales taxes, support services, and additional traffic for other nearby businesses all result from new store openings. We have also noticed the “Natural Grocers Effect” on food prices – our prices tend to be a bit lower than other retailers, so competitors may need to lower their prices to match ours when one of our new stores opens. In addition, not a few local producers will find Natural Grocers ready to buy local goods and help them grow their businesses. Another benefit to our communities is our ability to offer educational programs on health and nutrition – this helps develop a better understanding of how eating better actually improves the wellness of a community.
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