SWEET AUBURN CURB MARKET

SUPPLEMENT TO COMMUNITY DEVELOPMENT

BLOCK GRANT APPLICATION

Executive Summary

• The Municipal Market Company (“Management”) is requesting a Community Development Block Grant in the

amount of $2.6 million in order to make critical capital improvements to the 85-year-old Sweet Auburn Curb

Market building, which will have the added benefit of dramatically improving its energy efficiency.

• These planned improvements will include reparation of the deteriorating façade and roof, redesigned common

area fixtures and lighting, and will also allow for the renovation of certain vendor spaces.

• The requested grant will not only revive the Market; the capital improvements will directly translate into higher

rental payments to the City as foot traffic increases and Management generates a stronger net operating income.

• Some current vendors within the Market struggle to turn a profit, a result of high utility costs and a significant reduction in foot traffic to the Market as the demographic/economic profile of the neighborhood has changed.

• Given its location and history, the proposed Market renovations can help anchor the Sweet Auburn

revitalization, provide tourists with a new attraction, expand the customer base to include the growing area

neighborhoods, and help draw Atlanta metro-area residents to Downtown.

• The resulting increase in Downtown foot traffic would generate significant sales tax & parking revenues,

improve property values, create new jobs, and instill a new sense of civic pride in local residents.

• Although Management has achieved business efficiencies which have allowed the Market to remain open for

the past few years, there is an imperative need to both reduce the Market’s high utility costs and increase foot traffic, in order to make the Market a profitable enterprise for the City.

• The goal of these building improvements will be to create an environment that continues to serve the needs of

lower income households in the area and honors the Market’s history, but also appeals to new residents and

students in the area.

• Due to the convenient location at a major highway entrance between Downtown’s office/hotel district and the

burgeoning residential neighborhoods east of Downtown, every day thousands of local residents, students,

workers, tourists and conventioneers pass the Sweet Auburn Curb Market.

• Many residential neighborhoods proximate to the Market, including Old Fourth Ward, Inman Park,

Cabbagetown, Grant Park and East Atlanta, have seen a dramatic increase in household growth, and are now some of the most economically and racially diverse neighborhoods in Atlanta.

• In addition to new residents, Georgia State University will soon complete a new 600 bed dormitory just a block

from the Market, and already has facilities housing over 2,500 students within a short walk of the Market.

• The Sweet Auburn Curb Market has struggled to attract any significant number of these new residents and

students, due in part to the focus on maintaining the building’s infrastructure, and in part to the fact that the

Market lacks a variety of offerings to attract a broader base of customers.

• Management has received significant interest from several promising new vendors capable of attracting this

untapped customer base; however these commitments are contingent on capital improvements first being made to the building to improve the overall consumer experience.

• A team of highly qualified, civic-minded professionals has been assembled to strategically upgrade the facilities

without the need to significantly disrupt businesses in the Market or displace existing tenants.

The Market’s customer base is shrinking as the demographic/economic profile of the area changes.

Between 1990 and 2008, the median household income within a two-mile radius of the Sweet Auburn

Curb Market has nearly tripled, increasing from $13,000 to $37,000. The Market has experienced a

tremendous slowdown in foot traffic in recent years, as rising property values have led to the

displacement of many of the area’s low-income households. The Market’s produce, meat and fish vendors, previously supported by these households, are now struggling to stay in business. Food court

vendors in the Market, supported primarily by Grady Hospital employees and visitors, also struggle as the

hospital reduces its workforce, shortens workweeks, and allows fewer breaks. The result has been that tenants can barely afford to pay the rent and utility expenses required to keep the Market in operation.

While these vendors play an essential part of the Market’s purpose, they must be able to co-exist with

new vendors who will broaden the Market’s appeal.

There is significant opportunity to attract many customers that do not currently visit the Market.

The neighborhoods surrounding the Sweet Auburn Market, including Downtown, Old Fourth Ward, Grant Park, Inman Park and East Atlanta, have seen significant capital investment in recent years. Today,

there are over double the number of households living within one mile of the Curb Market that there were

in 1990, and the median home value is over $250,000. These neighborhoods offer a unique combination of history, proximity to major office cores and convenient highway access that appeals to a diverse group

of residents. As a result, the area’s residents and businesses are now more racially and economically

diverse than ever before. In 2009 alone, the neighborhood will add thousands of new apartment units, and Georgia State University will soon have nearly 3,000 students living in various dormitory facilities within

a few blocks of the Market. Many retail businesses in the area are now flourishing, and a variety of

successful establishments now surround the Market. Despite the increased popularity of the area, most

new residents have never visited the Market. The Market has tremendous potential to attract many of these new residents and students, yet it has not been successful thus far.

In addition to residents and students, the Market has the potential to draw significantly more tourists and conventioneers, as dining options are limited in Sweet Auburn. The location is strategically located

between the Martin Luther King, Jr. Center and Centennial Park/Pemberton Place, home to the Georgia

Aquarium, the World of Coke, and the future Civil and Human Rights Museum. The Market is also

located along the proposed streetcar route along Edgewood Ave, which would allow the Market to serve as a destination and meeting point for downtown visitors using the rail system.

A lack of diverse product offerings is preventing Curb Market from attracting new customers.

While low cost and ethnic specialty items must remain a focal part of the Market’s selection, the

Management’s plan to revitalize the market focuses on product diversity and quality of product as the core elements of the tenant evaluation process. National eating habits have become healthier and more

adventurous in recent years, and as a result public markets all over the country are beginning to see an

increase in popularity. But unlike public markets in other major cities, the Sweet Auburn Curb Market

does not currently offer sufficient product diversity and quality to attract a wide variety of the households now living and working in the area. Many Curb Market tenants choose to sell products for which demand

has declined, or which another vendor already sells. While these products are essential to the character

and function of the Market, the level of product redundancy is extremely high. For example, the market currently has three competing meat vendors and three produce vendors selling identical product

purchased from the same wholesaler.

The Market cannot attract new & more diverse tenants without specific building improvements.

Without leasing space to a more diverse group of vendors, the Market’s foot traffic will likely continue to

decline, or remain stagnant. Should this be the case, we fear that Atlanta’s only urban-based city market

will never reach the potential it is clearly capable of. The 84-year-old building has not had any major

improvements made to it since 1992, when the building was upgraded in anticipation of the Olympics. Management has received interest from a variety of new vendors who would significantly improve foot

traffic, however each of these prospective tenants has stated that their interest is contingent on the

necessary building improvements/upgrades being made. While the foundation of the building itself is in excellent shape, the building’s common areas, fixtures and vendor areas are in need of upgrading, and

layout is somewhat inefficient and confusion. Without necessary investments in the Market by the City,

Management will not be able to solicit and attract these new tenants.

All new tenants will be evaluated based on diversity, quality and cost of products.

As leases on these redundant vendors expire, Management will renew one or two meat and produce vendors, and the remaining tenants will be replaced with vendors who meet Management’s evaluation

criteria and bring a new, high quality and affordable product to the Market. For example, a new owner

recently took over the bakery, one of the most visible stalls in the Market. Although the previous bakery’s owners could not do enough business to pay rent, the new bakery is already a success in just a

few weeks. The bakery has demonstrated that vendors can appeal to consumers of all income levels by

offering a high quality product at an affordable price. Management intends to continue to pursue more tenants with a similar philosophy and understanding of the marketplace.

Management will help to promote and foster minority-owned and local businesses.

Management has also made it a priority to fill the Market with local and minority-owned businesses,

rather than national chains. Once appropriate funding is established, the Market hopes to establish a

minority business incubator program, which will provide a percentage of space and possible upstart funding for minority business owners an environment to teach new business owners essential

entrepreneurial skills. The program’s goal will be to allow successful businesses to eventually move

beyond the market and into the immediate neighborhoods of Sweet Auburn/Old Fourth Ward, in order to

provide new businesses with similar opportunities.

The Market’s Management is operationally sound and ready to lease space to new tenants.

For the past several years, Management has focused on sorting out the Municipal Market Company’s

financials, which were left in disarray by previous Management. Despite the slowdown in overall foot

traffic in recent years, the Market is currently breaking even from a financial standpoint, requiring no operational support from the City. In addition to identifying and fixing the Market’s accounting and

leasing issues, Management has spent much of its time ensuring that existing tenants are following stricter

sanitary guidelines. Management is now much more careful and strategic in its evaluation of prospective

new vendors, as well as existing vendors whose leases come up for renewal.

Management has identified and obtained estimates on these necessary building improvements.

While the raw building space has tremendous potential to offer an exciting and fulfilling customer

experience, the Market’s current layout is arbitrary and difficult to navigate. All of the identified building

issues can be solved through strategically locating tenants within the Market, adding smart and functional design elements, and creating a more cohesive theme for vendor stalls and common areas. The proposed

improvements will make for a more comfortable environment, reduce tenant expenses, and reduce

Management overhead.

Proposed Improvements

1. Upgrade the electrical & lighting systems as needed to serve the all of the Market’s needs now and into the foreseeable future.

2. Perform code-required structural upgrades (plumbing, fire) and additional sensible and prudent

upgrades to improve the safety of the Market’s buildings. 3. Provide sensible and cost-effective upgrades to the mechanical systems, roof and insulation to allow

for the efficient environmental control of the interior spaces. 4. Upgrade of the common areas, façade, signage and public restrooms to current retail standards. 5. Remodel under-performing retail spaces in the Market to increase their vitality and profitability.

A team of dedicated and civic-minded professionals has been assembled to see the project through.

In addition to the current Market manager, Pamela Joiner, three new individuals have been brought on in

order to help the Market with redevelopment planning and attracting new tenants.

Alex Brounstein

Alex approached Management one year ago with the concept we have presented in this application. Alex

possesses a unique combination of development, legal, branding and restaurant experience that will allow the project to move forward quickly, with precision and good judgment. Along with his family, Alex

owned and operated a highly successful almost thirty-year-old gourmet market in Boca Raton, Florida, as

well as a wholesale bakery. A former real estate attorney, Alex also has provided consulting services for

real estate developers in the areas of feasibility, strategy, and project execution. Alex received both his undergraduate degree and a JD/MBA from Emory University. A resident of Old Fourth Ward, Alex has a

vested interest in seeing this project succeed.

Darren Carr

Darren, a native of England, is one of Atlanta’s budding restaurateurs. His first successful project is Top

Flr – located in Midtown next to Mary Mac’s Tea Room, the restaurant has received national accolades

for its food, atmosphere and beverage selection, and was recently named one of America’s top 10 wine bars by Bon Appetit Magazine. Darren joins the team to provide his operational knowledge and ability to

tap into Atlanta’s culinary world. Darren will help the businesses within the Market thrive through

innovative methods such as reducing operational costs via collective purchasing efforts.

Paul Vranicar

Paul is a native of Atlanta and an attorney Holland & Knight, whose clients include ADA, AHA and the City of Atlanta. Paul works in areas relating to commercial litigation involving development and real

estate disputes, as well as government representation and public policy & regulation. He has worked with

federal, local and private financing of public and private projects, and has experience relating to tax

allocation districts and representing municipalities to ensure compliance with contractual obligations. Paul will serve an advisory role as certain issues and challenges arise during the Market’s revitalization

efforts, and will contribute to the scope and aesthetic vision for the market.

Capital Improvement Projects

FY 2009

Municipal Market Company

Sweet Auburn Curb Market

209 Edgewood Ave Se

Atlanta, GA 30303

Category Description Estimate Notes

Hard

copy

Quote

Electrical Energy Audit 5,000$ Quote from ___ Y

Electrical Thermographic Survey to identify possible "hot spots" that may be fire hazards. 3,000$ Quote from McBride Electric N

Fire Systems Upgrade sprinkler system per latest fire codes 9,030$ Per quote from Cintas Fire Systems Y

Floors Holes need to be repaired, Unused drains need to be fixed or removed. 15,000$

Holes create a hazard for tenants, employees, and

customers. N

HVAC Add "Blow Down" at loading dock door & main entry to reduce HVAC use. 4,730$ Quote from Shumate Mechanical Y

Lighting

Retrofit light fixtures (Based on prox 35k up and 15k basement) Exhisting fixtures outdated and

estimate reduction in energy use of at least 25%. 64,800$

Per quote from Greenspeed Energy Solutions-Includes

separating circuits to allow partial activation during the

day.

Plumbing Install backflow prevention valve per city requirements (two valves - one for fire system) 39,042$ Quote from RotoRooter Y

Plumbing Plumbing contingency 25,000$ Quote from RotoRooter Y

Security System Add (6 ) cameras to existing system 4,032$ Based on price new system cameras N

Fence Add fence on Edgewood side 9,000$

Reduce cutting through to parking area where cars are

being broken into freauently. N

HVAC Add 2 additional rooftop units 38,880$ Based on quote from Shumate Mechanical

Roof Replace flat roof with reflective material to reduce energy use. (20 year warranty) 264,700$ Quote from Lenox Roofing Y

Doors Update and repair doors and roll down gates. 10,000$ Price pending-Stanley Access

Electrical Replace/Add circuits as needed 50,000$ Need price from results of above survey - estimated N

Painting External-remove old paint, seal brick and repaint all trim 18,000$

Estimate based on quote for one side only (Does not

include yellow metal roof portion)

Painting Pressure wash metal roof material, replace damaged panels, repaint entire roof to match. 38,200$ Based on verbal quote from Lenox Roofing Y

Painting Strip & Seal interior 50,000$ see above

Signs New Signage along Edgewood & Main entrance from parking 100,000$ Lang Signs Y

Exterior Façade Adding outdoor vendor stalls along edgewood 50,000$ N

Exterior Façade Renovation of main entrance façade and awning 50,000$

Windows Replace glass blocks with transparent glazing; add 4 large street level windows along Edgewood 75,000$

Elevator Elevator upgrades 35,000$

Common Area Expansion of seating areas and new tables/seating (indoor & outdoor) 200,000$

Common Area Common Area: Fixtures (awnings above stalls, wall fixtures, large greeting boatd, etc/) 350,000$

Common Area Close off Stairway by bakery 50,000$

Bathrooms Renovate bathrooms 100,000$

Lower Level Cleaning and mechanical upgrades of lower level 30,000$

Design Professional Fees (Architect, Interior, Developer) 500,000$

General Tenant Relocation Expenses/Tenant Improvement Allowance 400,000$

General Contingency expense of 4% 103,537$

Total 2,686,951$

Based on PSF quotes from Art Mix Productions, Perkins &

Will Architects, and Bill Johnson Studios.

Sweet Auburn

Curb Market

e

e

The Public Market a centuries old tradition

e

where communities around the world gather to purchase the freshest ingredients

e

where locals & tourists come to experience a variety of cuisines in a casual environment

e

The Sweet Auburn Curb Market at the cultural heart of Downtown Atlanta

e

The Market – Today

e

A Valuable City Asset in need of repair

e

The Concept simple & clean embraces historic elements activates outdoor space

e

The Concept simple & clean embraces historic elements activates outdoor space

e

The Downtown Atlanta Renaissance is Underway public initiatives & private investment are making the revival a reality

e The neighborhoods surrounding the Market, including Sweet Auburn, Old

4th Ward, Cabbagetown, & Grant Park, have seen a flood of new residents

e Since 1990, the population has doubled and median incomes have tripled

within one mile of the Sweet Auburn Curb Market.

e Downtown has seen an increase in tourism with the addition of the Georgia

Aquarium, World of Coke and future Center for Civil and Human Rights.

e

Renaissance Walk

160 condo units

Georgia State Univ.

3,000+ students

Alexan 360

600 luxury

apartments

Over 7,000 New Residents Within Blocks of The Market a diverse group of renters, students & homeowners

Auburn Pointe

400 total units

Pencil Factory

190 loft condos

e

Cotton Mill Lofts

550 apartments &

condos

Auburn Glen

270 apartments

Mattress Factory

300 apartments

Tribute Lofts

120 condo units

e

Downtown audiences currently spend a majority of their food and beverage dollars elsewhere

Downtown Residents

– 15,790 Downtown households1

– $48M spent annually on food & bev.

Downtown Students

– 29,000 Downtown students

– $25M spent annually on food & bev.

Downtown Employees

– 113,552 Downtown employees

– $214M spent annually on food & bev.

Downtown Conventioneers

– 1,380,167 annual conventioneers

– $360M spent annually on food & bev.

Downtown Tourists

– 4,744,250 annual tourists4

– $115M spent annually on food & bev.

1 CAP; RCLCO

2 Office worker expenditures from ICSC "Office Worker Retail Spending Patterns“

3 Urban Land Institute "Sports, Convention, and Entertainment Facilities, 1996

4 Various sources contributed to the total tourist count and is an estimate to account for overlapping visits. Expenditure figures based on data from the Travel Industry of America.

NOTE: Excludes some retail uses including automotive and electronic/mail order shopping.

7%

12% 37%

13%

31%

Existing Market Audience Breakdown $800 million+ spent annually on food & beverage

e

Now Is The Time to invest in the region’s only historic covered market

e

Creating a World Class Market enhanced facility superior customer experience improved image

e A new, exciting & diverse mix of tenants is necessary to succeed

• Must strike a balance between new tenants and traditional vendors

• Many current vendors are dull, unappealing & even unsanitary

• Must attract quality retailers & offer new products to appeal to a broader base

e Capital improvements must first be made in order to attract new retailers

• Aesthetic qualities of the Sweet Auburn Market are not consistent with world-class markets

• Design consultation with architect to transform space for optimal consumer experience

• Update facility to meet modern standards of a Class A retail space (roof, HVAC, façade)

e Build local & national buzz through focused PR & word of mouth

• Emphasize Atlanta’s role as an increasingly international and sophisticated city.

• Maintain and highlight historical and cultural significance of market.

e

Economic and Cultural Diversity Initiatives

e Minority Business Incubator

• Percentage of space and possible upstart funding for minority business owners

• Provide environment to teach new business owners essential entrepreneurial skills

• Create program to allow successful businesses to eventually move beyond the market

and into the immediate neighborhoods of Sweet Auburn/Old Fourth Ward, in order to

provide new businesses with similar opportunities

e Food Education Programs

• In-market demonstrations on food preparation & ingredient selection

• Provide nutritional information on eating healthy & offer a variety of beneficial products

e

e Draws Atlanta metro-area residents Downtown – an effort that is proved to be difficult

e Will generate a great deal of local and national publicity for Downtown ATL

e Anchors Sweet Auburn revitalization & provides tourists with new attraction

e Creates Downtown jobs

e Generates increased sales tax & parking revenues

e Creates pedestrian environment

e Students, Grady employees & residents need a market & more food options on east side

e Further establishes Atlanta as the culinary capital of the Southeast

Benefits to the city of Atlanta of a well-run market increased tax revenues area revitalization positive publicity

e

Proposed Merchants and Vendors diverse local experienced

Merchants

Bakery & Cafe (existing)

Pork store (existing)

Fishmonger (existing)

Ethnic specialty grocers

Locally raised beef & chicken Organic produce

Cured meats & cheeses

Wine merchant Gourmet kitchen supply

Prepared Food Counters

Soul food & BBQ (existing)

Pizza & panini (existing) Caribbean (existing)

Burgers & fries

New Orleans cuisine

Sandwich, soup & salad Middle Eastern

Ice cream & sweets

Sushi, Teriyaki & Noodles

e

Next Steps

• Fund raising - seek sources of financing for redevelopment

• Key Tenants- Obtain Letters of Intent from influential new vendors

• Neighborhood - Meet with local groups & leaders to get buy-in on the proposal

• Redevelopment - Begin architect evaluation, planning & design process

• Existing Tenants - Begin existing tenant evaluation process

• Publicity - Work with local press to announce market revitalization project &

establishment of minority business incubator

• New Tenant Selection -Begin receiving & evaluating vendor applications from

local food vendors & minority business applicants

e

Redeveloped Curb Market Higher rent to City from increased rental income & decreased utilities

Current Market

Rental Revenues (80% leased, $24/SF) $760,000

Total Expenses $758,000

Net Earnings $2,000

Redeveloped Market

Potential Rental Revenues (100% leased, $35/SF) $1,000,000

Future Expenses $630,000

Net Earnings $370,000

e

Team Bios professional experience passion for food local market knowledge

Alex Brounstein

• Real estate development, legal & consulting background

• JD/MBA from Emory University

• Co-owner of 3rd gen. family-run gourmet market & bakery in Boca Raton, FL

Darren Carr

• Owner of Top Flr, a nationally renowned restaurant in Midtown Atlanta

• Extensive experience in restaurant design, management & concepting

Paul Vranicar

• Attorney at Holland & Knight, practicing in public policy, public infrastructure

financing & commercial development

• Clients include ADA, AHA and City of Atlanta

e

Our Contribution intelligent planning infrastructure investment extensive network

• Dedicated & creative management team

• Extensive connections within restaurant/retail and development sectors

• Provides liaison between city/board, retail tenants & customers

• Investment of capital into the building to provide first-class retail environment

• Re-branding and provide comprehensive image overhaul, including a re

-designed logo, a new website, new signage

• Obtain lease commitments that will provide ideal balance of tenants to ensure

immediate and long-term success of project

• Manage public relations and ensure appropriate publicity in local media outlets

• Continued oversight and operation of property