Signature Associates

Plans come together for Port Huron’s first downtown grocery store in 50 years

If you had told Steve Fernandez and Michele Jones in 2012 that they were going to retire to Port Huron, then spend most of their retirement savings on becoming grocers, they’d have thought you’d been eating funny mushrooms.

In 2012, he was working in Alaska as the Anchorage terminal manager for Koch Industries. Michele, his wife, was the safety program team leader for British Petroleum’s North Slope operations.

He was asked by his bosses at Koch to take a two-year assignment in Marysville to turn around a poorly run polypropylene plant. It was the last thing he wanted to do, work in Michigan, far away from Michele, but his extensive military background had taught him to be a good soldier, so he took the assignment.

But a funny thing happened before he returned to running the Anchorage terminal in 2014. “I really fell in love with St. Clair County. And I drove up north and saw all the beauty Michigan has to offer. I was just enamored with the state,” he said.

“I was in downtown Port Huron over the holidays, and it was like that opening scene from the movie ‘Christmas Story.’ You know, the one with the families downtown and a Christmas parade? I called Michele. I was all choked up. I loved the people. I loved the old buildings. It was idyllic.”

On Michele’s several visits during Steve’s tour of duty, she found herself becoming enamored, too.

“Port Huron reminds me of the town I grew up in, Pueblo, Colo. I just love this town. We fell in love with it,” she said.

They first met in Arizona in 2004, where she was the first woman ever to run a Morton Salt plant and he was plant manager at an AmeriGas Propane Inc. facility that rented land from Morton. They got married in 2007. After they moved to Alaska, they planned to retire in Arizona and bought a retirement home on a golf course in Arizona in 2014.

Yet, when they retired in 2017, it was an easy decision to rent out their retirement home and move to Port Huron. There, they immediately put on their entrepreneurial hats. They invested with a partner in three area restaurants, a partnership that dissolved last February, just before COVID-19 shut all restaurants down.

In February 2018, they purchased an iconic building on Huron Avenue in downtown Port Huron, a former Woolworth’s building that had sat empty for eight years and had long been for sale.

“Everyone said a grocery store, that this was a food desert,” said Fernandez. And had been for decades. A Wrigley’s store downtown closed some 50 years ago and an A&P shut its doors 40 years ago. With a flurry of loft developments, condos and apartment projects in and around downtown in recent years, the consensus was that a full-line grocery store was needed.

They sent letters out to 10 grocery story companies asking if anyone was interested in partnering with them in the Woolworth building. No one was. “So, we took it on ourselves,” said Fernandez.

The building needed a total rehab, and that would take more financing than they were capable of. Using their own money, they did some badly needed roof repair and took off the aluminum cladding that had been installed on the exterior of the building long ago.

Then, to prove that their vision of an upscale grocery along the lines of the Westborn and Holiday markets would work in St. Clair County, and that they would be able grocers despite no experience, they bought a grocery store in Fort Gratiot in October 2018 for $400,000 and rechristened it the Country Style Marketplace.

That same fall, they were invited to give a five-minute presentation on their plans for the downtown building, to be called the Port Huron Country Style Marketplace, to a monthly meeting of 100 or so at Blue Meets Green, a St. Clair County collaboration of public, private and nonprofit sectors that coordinates economic development projects.

“We got rousing applause and support,” said Fernandez. “A grocery store downtown was really a big deal to everyone.”

In fact, six years earlier, the group had identified a downtown grocer as one of its development targets.

“With so many lofts being built downtown, there’d been a lot of talk about the need for a grocery store,” said Dan Casey, CEO of the Economic Development Alliance of St. Clair County.

Jeff Bohm, chairman of the St. Clair County Board of Commissioners, said over the years he had talks with major grocery chains, including Kroger, about opening a store in downtown Port Huron, but there was little interest.

“What I like about Steve and Michele is they aren’t grocery-store people, they are best-practices people. She was a salt-mine manager. He was a manager for the Koch brothers,” he said. “They are phenomenal business owners. They are going to be successful whatever they do.”

Or, as she says: “We didn’t know anything about grocery stores, but processes are processes.”

In addition to all the new loft, condo and apartment dwellers, in pre- and post-COVID worlds, hundreds of people drive downtown every day, working in city or county government, at state and federal courts, for the U.S. Border Patrol and at large banks that call Port Huron their regional headquarters.

A complicated deal

Yet, as much sense as a grocery store made, it wasn’t an easy deal to get done. It wasn’t until last October when a complicated financing for a total of $3.7 million was announced.

In the summer of 2019, Michele and Steve had reached out to the Michigan Good Food Fund, a $30 million public-private loan fund that provides financing to food enterprises that benefit underserved communities across Michigan.

The Good Food Fund is a partnership between Capital Impact Partners, a 30-year-old Detroit-based nonprofit that helps coordinate complex real-estate transactions in underserved communities, often raising capital through a combination of state, federal and philanthropic sources; the Ann Arbor-based Fair Food Network, a national nonprofit that supports farmers and increases access to healthy food; the Michigan State University Center for Regional Food Systems; and the Battle Creek-based W.K. Kellogg Foundation.

Investors in the Good Food Fund include Capital Impact Partners, the Kellogg Foundation, Chicago-based Northern Trust Corp., and the Troy-based Kresge Foundation.

Ian Wiesner, director of business development for Capital Impact, got a tour of the former Woolworth building, then visited the Fort Gratiot store.

“Seeing how hands-on they were at the store, that they were owner-operators, how good the store looked, how much they knew about sales, margins and their products were big factors in helping us get comfortable,” he said.

Of Steve and Michele, Wiesner said: “You don’t get a lot of folks going to Port Huron and saying, ‘We’re going to make this home and make a commitment to the city.’ They live downtown. They’re going to have a loft in the new building. They’re all in on Port Huron.”

Wiesner made a second site visit downtown that November, where he was met by Mayor Pauline Repp and a contingent of Blue Meets Green members. “That showed the city was behind this project, and that there was a need for this,” he said.

A feasibility study by MSU said the store made fiscal sense, but it took nearly a year, until last October, to get all the funding pieces in place. “It took time to come together. It was a tough project,” he said.

Wiesner said Capital Impact, through its partnership with members of the Good Food Fund, financed $3.4 million in construction and other financing. The Michigan Economic Development Corp. will reimburse $630,000 of that or 25 percent of the total cost of construction, whichever is less, through a grant when construction is completed, and Croswell-based Eastern Michigan Bank provided an equipment loan of $300,000.

Demo work began in earnest in November and construction should be completed this fall.

Their grocery visions

Steve and Michele spent $100,000 on a complete makeover of the 11,000-square-foot Ft. Gratiot store, with new overhead lighting and wider aisles that brought more of the store into view — a large wine selection in one corner, and an upscale deli along one wall with a wide variety of hot foods made daily and grab-and-go salads.

“It’s a gourmet boutique grocery store. We pride ourselves on that,” said Fernandez.

Jones is a member of the Fort Gratiot Business Association, while he is a member of the St. Clair Chamber of Commerce.

The Fort Gratiot store’s large parking lot has served as host of two COVID-inspired community events. On Labor Day, 150 carloads of people came to a free drive-in showing of the movie “Jumanji 2” on a screen Fernandez and Jones rented.

On Halloween, with traditional trick-or-treating verboten, they had another drive-in showing, this time of the “Addams Family” movie. Michele dressed as Morticia and he as Gomez, and they went around to the 100 or so cars that showed up passing out candy.

“We’ve gone full-speed ahead with the grocery stores,” said Fernandez. “We cashed out our retirement and did exactly what a financial adviser would have said (not to) do. We’ve invested 90 percent of our personal wealth here.”

They have 20 employees in the Fort Gratiot store. They plan on having about 45 downtown, which will be a much bigger store at 24,000 square feet, half on the ground floor and half in the basement, where there will be a wine cellar, a beer cellar and general merchandise like soap, brooms and mops.

The second floor of the building will have three offices for rent and a 1,500-square-foot loft.

They currently live in another loft in downtown Port Huron. “The entire loft is smaller than the front room of our Arizona house,” said Fernandez.

Loft living has given them a feel for what shoppers will need. The market will have rolls of paper towels and toilet paper, but in small quantities. Loft dwellers don’t have storage space for Costco-size packages of 15 or 18 rolls of paper towels or toilet paper. And with no on-site parking, most customers will be on foot, walking over from where they work or from their loft, wanting to walk out with one or two bags, maybe food they need for the next day, not a huge basket filled with a month of stuff.

“Our goal is that just-in-time groceries will become the norm,” he said.

Much of the year, the store will also have tables on the sidewalk outside to offer those buying food to go a place to sit down and eat.

Posted By: Crain’s Detroit Business on March 7, 2021. For more information, please click here to read the source article.

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