Anatomy of the Deal :: Romano’s Grocery
Romano’s Grocery Renovation Timeline
September 2005 – Felicito and Juan Carlos Romano are participating in the first iteration of The Food Trust’s Corner Store Campaign. Snack Smart was a social marketing campaign that tied nutrition education lessons and afterschool activities to healthy snacking and healthy shopping in local corner stores around the participating schools. I was working for The Food Trust’s Supermarket Campaign, which had dedicated financing dollars for food retail markets in underserved areas throughout Pennsylvania to build or renovate their stores. The outreach to small stores like Romano’s to take on more aggressive physical and product upgrades had begun in earnest.
November 2005 – Submitted grant and loan application to the Fresh Food Financing Initiative (the financing program). Loan officer at The Reinvestment Fund (The Food Trust’s partner in FFFI) needed to see a deeper level of accounting and bookkeeping to show the store could take on the debt service of the proposed renovations.
Winter 2006 – Felicito sells store to Juan Carlos, begins new venture in used car arbitrage in Dominican Republic. Juan Carlos and I begin to create bookkeeping and financial projections for store to go after funding.
Spring 2006 – Resubmit application with cleaner books and documentation. Loan officer wants to see two years of tax returns under new ownership, architectural drawings, and construction estimates, timelines, and budgets.
Summer and Fall of 2006 – After several months of vetting, assemble project team. BluPath Design. Clifford James Construction. Get additional grant from William Penn Foundation to explore possibilities of creating a Green Bodega model store.
Winter 2007: Project package complete. Juan Carlos begins to compile his equity stake in renovation costs. We begin to search for additional financing options. (Turned down by every commercial bank, even using SBA products). Tegan Hagy, Farm to School aficionado at The Food Trust, begins to moonlight with our band of merry men putting together the sourcing plan.
May 2007 – Two serendipitous conversations. Colleague at TRF needs to invest in project that will have Green focus. She needs something shovel ready ASAP. I give her Romano’s, she likes for 40% LTV. Colleague at the Philadelphia Development Partnership says she needs more retail clients for her microlending portfolio. I give her Romano’s, she likes for 15% LTV. That money gets the FFFI grant back on the table. FFFI comes through for 20% LTV. Plus Juan’s 25% in cash gives us the money we need with plenty of cushion (so we thought).
Summer of 2007 – Get permits and sealed construction drawings. Juan begins to sell remaining inventory in store. Tegan begins produce sourcing training with Juan. Team recruits Jimmy Iovine of Iovine Brothers to work with Juan on wholesaling produce.
September of 2007 – Demolition begins. Construction stalled due to lack of pertinent building permits. Begin 4am runs to Wholesale Produce Terminal. Flea infestation in basement.
October 2007 – Get permits, but have serious electrical cost overruns (very old existing knob and tube wiring = code violation). Contingency cushion gone. Large steel lintel running through proposed window scheme, changes entire shelving plan. Putting together grand opening marketing plan, but date keeps shifting. Value engineering on materials begins. November 17 opening date set firm.
November 2007 – Running out of time and cash. Get working capital grant for inventory from Patricia Blakely at the Merchant’s Fund. Refrigeration equipment arrives. Mad dash to install fixtures. Begin filming the chaos for posterity. State Senator Dwight Evans confirms. Electrical problem near wet wall causes beverage refrigerators to stall. Project team and owner’s family work 48 hours straight to paint, stock inventory, merchandise, and price products for opening. 3am run to Produce Terminal for opening, but lose price list. Half of The Food Trust comes at dawn to set up for opening.
November 17, 2007 – Store opens. First BITTER COLD day of the fall. Product sampling, food tastings, and free swag given out liberally. Kids mob store after school. Pictures are taken with dignitaries. Project team exhausted and relieved. Stores makes about $400, which is worrisome.
Winter and Spring 2008 – Rough sledding. Housing and credit markets are faltering. Bodegas are closing around Romano’s. Store is making half of it’s old haul, but people are beginning to find the store again. Energy output for the store is super low.
Fall 2008 – Store is getting its swagger back. Juan Carlos, Tegan, and I head to Terra Madre conference to represent Healthy Corner Stores in Italy. We fall in love with Eataly. Grant ends. Report on initial findings and store progress.
2009 and 2010 – Juan Carlos has his first child. I leave the Food Trust to start Urbane Development. Tegan leaves to start a chocolate company. Romano’s starts cooking full Spanish meals. The store makes more money than ever before. The interest in produce ebbs and flows. Juan and I begin machinations for an outdoor addition to store. The grind continues…