Business Lead Story West Edition

Supermarket proposed for former hospital site in South L.A.

SOUTH LOS ANGELES — A two-acre plot of city-owned land here could be given away to an investor under a deal to build a Numero Uno supermarket in an area designated by the federal government as a “food desert.”

The Los Angeles City Council is expected to consider the proposed deal later this month, after the public is notified and given a chance to weigh in.

Nogales Investors, which owns the Numero Uno brand and at least eight of its stores, wants to build a 25,000-square-foot supermarket on the former Broadway Hospital lot at 94th Street and Broadway.

The hospital closed in 1988, and the property has been vacant since 1993.

About half of the original 4.2 acres of the hospital property was recently developed into the 49-unit Broadway Villas senior housing, with some of the remaining space set aside for a mixed-use development that includes a supermarket.

The mixed-use concept for the site was approved by the City Council in 2013.

The council will consider the notification process for the proposed deal at Tuesday’s meeting, with city officials aiming to bring the agreement to the City Council for a vote by June 24.

The “reuse value” of the two-acre site came back as negative $129,000, which “equates to a purchase price of $0,” according to a city report. The city would “sell off” the two-acre site at below-market cost — or zero dollars — to Nogales and would also give $750,000 in community block grant funds to the developer.

In return for the subsidies, Nogales Investors would be required to create at least 70 permanent grocery store jobs with “living wages” tied to the consumer price index, and five temporary construction jobs, as well as comply with other terms. Nogales Investors would also be expected to hire locally.

Councilman Bernard Parks, whose district includes the site, says the city has struggled to secure a grocery market to move into the surrounding community, which sorely lacks fresh food sources.

There have been at least four attempts to bring a market to the Broadway site, and earlier plans to build apartments at the location fell victim to the economic crash in 2008, he said.

Smart & Final, Northgate Gonzalez and SK Market Inc. each seriously considered bringing their markets to the Broadway location, but ultimately declined to do so, according to a city report.

The city also tried to get interest from major grocers, such as Kroger and Vons, through grocery cooperative Unified Grocers, and from regional, ethnic and specialty markets.

“You cannot find a location in this South Los Angeles community where a new store has come on line, and that has been built from scratch,” Parks said. “This will be the first one built from scratch in anyone’s memory.”

There are no grocery stores and other amenities within “walking distance, and most people are transit-dependent,” Parks said. Many also have health issues such as obesity and diabetes, he added.

Grocery stores have picked up and left through the years, while the number of discount stores has increased, he said.

“Every place you see a 99 cent store, it used to be a market; it gives you a sense of how many [markets] have moved on,” he said.

Parks said the former hospital site would be transformed “from a vacant lot that’s producing no revenue to a store that’s providing groceries to a community that doesn’t have any.”

Under the proposed deal, Nogales Investors would be expected to begin constructing a market within six months of finalization of the land transfer, and to complete construction of the store within 36 months.

In addition to the terms for job creation, at least 25 percent of the store’s sales would need to be for fresh produce, at least one of the checkout aisles must be free of junk food, cigarette sales would be banned and the promotion of hard liquor sales would be prohibited.

Numero Uno would also need to offer a free van to customers who require help getting their groceries home, and organize quarterly health fairs.

The South Los Angeles area is considered a “food desert,” a U.S. Department of Agriculture term that applies to a low-income area with little access to fresh foods.

The corner where the Numero Uno is envisioned was chosen by the city’s Economic and Workforce Development Department — which received a grant from the nonprofit foundation California Endowment — as a “high priority” spot for building a supermarket, according to a city report.