Schnucks Earmarks $3.5 Million for Urban St. Louis Store

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Schnucks Earmarks $3.5 Million for Urban St. Louis Store

Backed by a $7.56 million purse, Schnucks Markets Inc. is gearing up to build and open downtown St. Louis' first full-service grocery. The family-held retailer will spend some $3.5 million to build its first urban site and make necessary tenant improvements, while the remaining funds will come from a combination of state, federal, and city subsidies, according to local press reports.

The space it is going in was not designed to accommodate a grocery store. As such, the planned 20,800-square-foot site will require a leveled floor, extensive wiring and other improvements, said Scott Schnuck, c.e.o. of regional retailer that bears his family name. He added that the store, slated to open in late 2008 or early 2009, will be "unlike anything else we have today."

The urban unit will feature all of the traditional departments and services found in the typical 55,000-square-foot Schnucks Market, including a pharmacy, floral department, bakery and fresh meats. The new concept will also feature a Kaldi's Coffee bar.

The 6,306-square-foot mezzanine with wine department, tapas bar, and seating space will cater to daytime workers in the area, as well as downtown residents who eat out often.

For the project, Schnucks will receive $1.1 million in state funds from the Missouri Development Finance Board (MDFB), $1.29 million in proceeds through the federal New Markets Tax Credits program, and $1.75 million from the city of St. Louis through a development agreement that will operate like a tax increment finance (TIF) plan, according to a resolution approved March 18 by the state finance board.

The city's Board of Aldermen approved the development agreement March 14 and has sent its bill to Mayor Francis Slay for his signature.

"If we didn't have the public support, it wouldn't be a viable project," said Schnuck,

The state owns the 1,065-space Ninth Street Garage where Schnucks will lease ground-floor retail space for the store. The initial term of the lease will be 10 years, at a rate of $9 per square foot. After that, Schnucks can extend its lease for one or more of six consecutive five-year terms at slightly increased rental rates, according to the lease summary.