Food City breaks ground; Project moves forward despite opposition | News

Virginia-based grocery store chain Food City broke ground Tuesday on a store to be located at 1015 Gault Avenue S in Fort Payne.

“We are excited to be joining the Fort Payne retail community. We look forward to constructing a state-of-the-art supermarket that will create quality jobs and tax revenue for the residents of Fort Payne and DeKalb County,” said Steven C. Smith, Food City president and chief executive officer.

The store will be 54,000 square feet with an in-store bakery and deli, with a hot food bar, large café seating area, a floral boutique, full-service meat and seafood departments and expanded grocery, frozen food and produce departments to “go well beyond the normal fare with a huge selection of specialty, gourmet, and vegan items.”

K-VA-T (Food City’s parent company) President Stephen Spangler said earlier that the store will create 140 jobs providing a weekly payroll of $55,000 or $2,860,000 annually.

Company officials and some city and community leaders turned out to see the first ceremonial moving of dirt at the location.

The ground-breaking was a celebration, but it didn’t come without controversy over the project and the price of luring the new business to Fort Payne.

As city leaders went through the process of bringing the store in, they drew a lot of criticism for an incentive plan that will have the city paying Food City money upfront, rather than abating sales tax revenue after the business is in operation as many municipalities do when courting prospects. Public hearings brought out standing-room-only crowds and heated discussions (Full video of the Aug. 30, 2022 meeting may be viewed the Southern Torch Facebook  page).

A group of residents even sued to stop the project.

Under a Memorandum of Understanding approved by a 3-2 majority of the Fort Payne Council, the city would pay $1.2 million upon the beginning of excavation, and another $1 million if the store is open to the public within 12 months. A final payment of $900,000 will be due upon the one-year anniversary of opening – bringing the total to be paid by the city to $3.1 million.

Money will be returned to the city, with 2.5% interest, if the developer fails to live up to its end.

Legal action

A class action complaint was filed in late March 2022 seeking injunctive relief and a jury trial in the Ninth Judicial Circuit Court against the City of Fort Payne to stop the deal with Marathon Realty Corporation going through. Marathon is part of Food City parent company K-VA-T.

Named plaintiffs in that complaint included David Bruno; Ancro Doors, LLC; Thrive Outdoor, Inc.; Dona Weatherly; Ed Westmoreland; Dr. Joe McNew; Ed Chadwick; Chadwick Plumbing & Piping Services, Inc.; Hank Cobble; MB Fort Payne Footworks, LLC; Shan Bruce; Shan Bruce Enterprises, Inc.; Robert Davis; Bernard Bowlesand Pete Little.

Bruce, owner of Bruce’s Foodland in Fort Payne, spoke at a February 2022 public hearing in opposition to the deal. He characterized it as giving a competitor a “$3 million head start” against him. After the vote, he said he would oppose it in the Circuit Court, where it advanced for an Amendment 772 hearing — a hearing to allow those proposing such an expenditure of public funds and those who oppose it to present their arguments to a judge.

In that hearing, there was testimony against the project – from residents who argued it would cannibalize customers from other grocery stores already located in the Fort Payne area, rather than bringing in new tax dollars.

They voiced support for those existing business owners, and for Bobby Ledbetter, owner of Twin City Auto Sales, which would have to move to make way for the new grocery store – a decision made by Drinkard Development, the owner of the property where Twin City was located at the city’s “South Y.”

Ledbetter has a history of local philanthropy, as does the Bruce family who operate Bruce’s Foodland. 

Others speaking against the deal said the city should not be paying for work to be done on private property, or that they’d rather see the city spend money to “buy school supplies” or help the homeless.

City Clerk Andy Parker testified in that hearing, saying for the property at the Y to ever be suitable for development, the city would be forced to pay about $1 million to relocate a sewer main that was buried beneath it without an easement to the city in the 1950s.

“That’s a million dollars that the City would have to spend regardless for anything permanent to be built on it, and Food City takes over that obligation,” Council President Walter Watson said, according to a Times-Journal news story.

The city’s investment represents 20.4% of what it will cost to make the land suitable for development and construct the shopping center. Work needed includes moving sewer lines and elevating the lot by three feet because it borders a creek that overflows during flash floods, it was reported. 

Plans compared

City leaders pointed to the incentive agreement Food City struck with the Gadsden City Council prior before beginning construction on a store at the Gadsden Mall. The City of Gadsden agreed to rebate 2% of sales tax revenue to Food City for 15 years – or a total of $6.7 million, whichever comes first.

The plaintiffs sought a declaratory judgment on the validity of the memorandum of understanding and an injunction with provision for a trial by struck jury on all claims triable to a jury. They were represented by the firm of Scruggs, Dodd & Brisendine Attorneys, P.A. in Fort Payne. 

However, the City had to scrap its original deal with the company because of an error in a figure in the agreement, rendering the legal action against that particular deal moot. After a re-do of the agreement, the plaintiffs did not file a new complaint. The city had to hold another public hearing prior to the Amendment 772 hearing that resulted in a Madison County circuit judge giving the OK in December for the deal to move forward.

That completed the process of validating the deal under the legal framework tying conditions to a city or county’s ability to offer financial incentives to retailers.

According to the judge’s order, the city followed the proper process and “no taxpayer or citizen of the city offered evidence in opposition to the Plaintiff’s Petition.”

Project proceeds

The store is expected to open early next year, according to a press release from Food City. Here’s what else the company had to say about the new store:

“The location will include an in-store bakery and deli, complete with a hot food bar, large café seating area, fireplace, Asian wok, fresh food bar offering a variety of soup, salad and fruit selections, hickory wood smoker, brick pizza oven, and fresh sushi. Full-service meat and seafood departments will offer top-quality meats, including Certified Angus Beef and pre-marinated/seasoned oven ready products.

“In-house butchers will be available to hand cut steaks and fresh meat to order. Expanded grocery, frozen food and produce departments will go well beyond the normal fare with a huge selection of specialty, gourmet, and vegan items.  

“The Food City Floral Boutique will be staffed with a designer seven days a week and offer a full assortment of fresh-cut floral arrangements, bouquets, gift items, and more.

“Rapid checkout service will be provided by six traditional check-out lanes and seven self-checkouts. GoCart curbside pick-up and home delivery will be available for customers wishing to shop on-line.The store will also include a Food City Pharmacy, Food City Gas N’ Go featuring top quality fuel/diesel, and a Starbucks cafe, offering a wide assortment of blended hot/cold coffees and beverages.  

  “The new location will also feature several award-winning energy saving concepts, ranging from energy efficient glass cooler doors, parking lot lights and refrigeration systems to motion sensors and 100% LED lighting.” 

  “Our customers can expect to find exceptional customer service and top-quality products at the lowest possible prices, along with great variety/selection and some exciting new services,” CEO Steven C. Smith said.