Development a Mixed Blessing for H Street Co-op
Real Estate Prices Have More Than Doubled in 3 Years, Forcing Group to Consider New Site
The economic development that the H Street Community Market had hoped would help make the case for establishing a co-op food store on the street’s Northeast corridor has turned out to be a double-edged sword. At the same time as drawing customers, the development also has succeeded in more than doubling real estate prices.
With the cost of a square foot jumping from $15 when HSCM began organizing three years ago to more than $35 per square foot now, the group’s envisioned 8,000 square-foot store will now cost upward of $280,000.
That’s a steep price for a group that currently has roughly $10,000 in cash on hand — about the same amount it had in April.
“I don’t think we realized that kind of property increase was going to occur over a three-year period,” HSCM project manager Karine Bouis-Towe said.
The prices have led the market to consider abandoning H Street for cheaper locations along Florida Avenue Northeast — and to push back its target opening date of the fall of 2008.
“Not the way the real estate prices are going right now,” Bouis-Towe said of the possibility of meeting that goal. “It’s not realistic unless something miraculous happens.”
She said the market has attracted 35 new members, at $100 a pop, since April, for a total of 85. But HSCM’s fundraising efforts have been hampered by difficulties in arranging for members to loan money.
Since members reside in Maryland and Virginia as well as Washington, D.C., Bouis-Towe said, the co-op has to deal with three sets of financial services law. The firm Hogan & Hartson is continuing its pro bono work to arrange terms of loans.
The plan still is to bank $200,000 from members through fees and loans and then secure a $200,000 U.S. Department of Agriculture Community Food Projects Grant next year.
Bouis-Towe said HSCM held a successful fundraiser last month at Sidamo, an Ethiopian coffeehouse on H Street, and will host a chili event in January.
She said another problem the market is facing is that developers along H Street are looking for “anchor stores” — established businesses with credit histories.
“Of course, we wouldn’t have that until we open our store,” she said.
HSCM is hoping Florida Avenue developers would be more willing to overlook a lack of credit history. Bouis-Towe pointed to D.C. government-owned buildings along the street as possible locations.
“It would be parallel to H Street, so still in the neighborhood,” she said. “We’ve met with the government. What I see from living there is they really rely on corporations to come in. We’re hoping with Mayor [Adrian] Fenty maybe there’s a different attitude.”
“We think we have an opportunity to open somewhere, but it’s just a stalemate right now,” Bouis-Towe added. “We’re kind of the cart chasing the horse. We’re trying to get the funds in place. There have been delays, but nobody’s lost sight of the fact we can make it happen.”