$24-Million Fund Set Up for Retail Centers : Construction: Firms will finance up to 30% to build malls with grocers for underserved areas of L.A., 13 other cities.
An investment fund providing an initial $24 million toward the financing of supermarket-anchored retail centers in poor, underserved areas of Los Angeles and 13 other cities is to be announced today by Housing and Urban Development Secretary Henry G. Cisneros. The fund, which has received financing from four California companies and six others across the country, is designed to help community-based nonprofit organizations finance the construction of up to 14 shopping centers at an aggregate cost of $80 million to $90 million over the next two years, one in each city.
The fund, organized by Local Initiatives Support Corp., a New York-based nonprofit group, would finance as much as 30% of the cost of each shopping center--providing local organizations with seed money to attract additional investors, according to LISC.
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Among the companies initially providing financing for the investment fund are First Interstate Bank, Home Savings of America, Great Western Bank and Bank of America. Company officials were not immediately available for comment.
The investment fund will identify its first development site by December and expects to have shopping centers built within 18 months after each location is announced.
The fund has not yet identified a site in Los Angeles, but the city is a major priority because areas such as South Los Angeles are underserved and lost some supermarkets during the 1992 riots, said Susan Anderson, a Los Angeles-based spokeswoman for LISC.
“The problem is severe because some people in the inner city in Los Angeles have to travel long distances to find quality food at affordable prices,” Anderson said.
One Los Angeles shopping center is actually a model for the kind of retail development LISC hopes to generate, Anderson said.
A nonprofit group called the Vermont Slauson Economic Development Corp. in 1981 built a shopping center that includes a Boys supermarket at Vermont and Slauson avenues in partnership with Sears, a private development company and federal and city agencies.
However, the undertaking in Los Angeles would be dwarfed by plans being carried out by Vons Cos.
The supermarket chain announced in 1992 that it would spend $100 million to build up to 12 stores in underserved Southern California areas.
The company has already opened three of those stores at a cost of $30 million and says it will open another such Los Angeles store next year.
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“This is not charity,” Anderson said. “This is a strong message that corporate America views the inner city as a good investment. Hopefully, this will encourage other corporations to get involved.”
The other companies contributing to the fund include Prudential, GE Capital, Metropolitan Life Foundation, JP Morgan and the Philadelphia Board of Pensions.
Established by the Ford Foundation in 1979, LISC operates in 34 locations nationwide and says it has helped build 50,000 homes in poor communities by providing financing and technical assistance.
