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Anatomy of a deal

A visionary collaboration between a grocery store and a clinic in Brockton, MA, aiming to tackle chronic health problems in a low-income community, marks its grand opening this week. The technical backstory—how complex private and public funding came together to make it all happen—might not take center stage at the celebration. But an article in the Novogradac Journal of Tax Credits details, in plain English, the financial architecture involved in bringing Vincente’s Tropical Grocery to the project and to a neighborhood that has long been a food desert.

The excerpt below is from:
"NMTCs Feed Expansion of Grocery Store in Massachusetts ‘Food Desert’"
By Mark O’Meara, Journal of Tax Credits, Novogradac & Company LLP

Vicente’s Tropical Grocery is a family-owned, fullservice grocery store focusing on providing Cape Verdean foods in Brockton, Mass., 25 miles south of Boston. The business has been a staple in the downtown area for more than two decades and because of the overwhelming success of the first 18,000-square-foot store, the family decided to open a second, 33,000-squarefoot, grocery store in Brockton. The new Vicente’s Tropical Grocery was financed using new markets tax credits (NMTCs).

“As in any business, you are always looking to grow,” said Jason Barbosa, president of Vicente’s Tropical Grocery. “We also asked ourselves what is the best way to serve the community. And when this opportunity came up, we took advantage of it.” Barbosa said this was a good site because it is located in a “very high-density area” with good foot traffic.

The new Vicente’s Tropical Grocery store took over a 5-acre, blighted lot and the store itself replaced a former grocery store that sat vacant for the past 20 years. The new store provides healthy food choices to residents living in an underserved neighborhood of Brockton that is designated a “food desert,” said David Ennis, president of Affirmative Investments Inc., the development and financial consultant to the sponsor.

Because Vicente’s Tropical Grocery is located in a city with a large immigrant population, the store has a unique supply of food, including food and fresh produce used in traditional Hispanic, Haitian, Portuguese and Caribbean meals. “They import produce from all over the world,” said Ennis. He said the large produce section has various types of plantains, sugar cane, mangos, squash, rice and much more. “We bring in specialty items that you can’t find anywhere else,” said Barbosa. “We are able to fill a void in the community.” In addition to the large produce department, the store also features a “value” aisle where customers can find discounted items, a meat and fish department with a butcher’s station, as well as a dairy section, frozen section, beer and wine section, bakery and a deli with a takeout kitchen. Continued [+]...