ERIE — Erie residents are considering if the benefit of having a grocery store in town is worth the risk of paying for it if it fails.
The Erie City Council agreed in a May 20 special meeting to send all city utility customers a survey with one question — “Do you support the City of Erie purchasing Stub’s Market?” City Clerk Cindy Lero said the survey was sent out on about May 28 and came with a self-addressed, stamped envelope, with a deadline of June 20 to respond. No count of the replies had been made as of Monday, she said.
While the survey has just one question with only two possible answers — yes or no — the city included several details including an explanation, the pros of the city buying the store and the cons of the store closing and what would happen if the city buys the store and it later closes because of a lack of support. The answer to that question is what seems to concern many people in Erie.
If the city bought the store and was forced to close it because of financial losses, all of the about 600 utility customers would have to help pay off the remaining debt. Based on the original amount of the debt to be paid over the course of 10 years, the amount that would be added to utility bills would be less than $5 per month. The survey states that the fee may not be needed, even if the store fails, depending on what money is received after liquidation of assets.
The Erie City Council has been considering the purchase of Stub’s since at least last summer. In an Aug. 26, 2019, meeting, the council discussed the possibility with Shirlene Mahurin, who owns the store with her husband, David “Stub” Mahurin. The Mahurins approached the city about buying the store after they had trouble finding interested parties on the open market.
Shirley Mahurin, who manages the store, said she and her husband simply want to retire after owning the store off and on for about 16 years. They opened Stub’s Market originally in 2004. The flood of 2007 knocked them out of business when their building was heavily damaged. The Mahurins decided to rebuild, and opened the new building in 2009. They operated Stub’s until the first time they decided to retire, leasing the building to G&W Foods in 2011. After G&W closed in 2012, the Mahurins reopened Stub’s.
Small-town grocery stores in rural areas just don’t attract as much interest from investors or potential operators as in the past. While the Mahurins obviously would benefit financially from the sale of the store to the city, Shirley Mahurin thinks Erie residents also would benefit from the convenience of having the only grocery store in town remain open.
“I think most all of the little towns need a grocery store of some type,” she said.
Besides the limited supply of food at the local Dollar General and convenience stores, there is no other option for groceries in Erie. Losing the store would mean a drive at least to St. Paul Supermarket, which is owned by the city of St. Paul, but many people would opt for a longer trip to Chanute or Parsons. Besides the inconvenience for shoppers, Erie would lose out on the sales tax generated from food purchases. That revenue is spent on necessary services such as street repairs. Shopping in Parsons would result in sales tax revenue being shifted not only from Erie but also from Neosho County.
Faced with the risk of losing Stub’s Market, the Erie economic development committee negotiated a deal with the Mahurins that would pay the couple $300,000 for the building and fixtures, plus inventory value at the time of the sale and 0.5% of gross sales for 10 years. Based on 2018 and 2019 sales, that amount would total $60,000 to $70,000. The city council discussed the proposal in an April 20 meeting and stipulated that there would be no contract offered unless there is community support. That’s when the survey came into play.
Mahurin said she knows “absolutely nothing” about how the public is responding to the proposal and hasn’t heard any comments from customers.
“We hope it works,” she said.
Erie Mayor Darrell Bauer also hopes it works. Bauer said while there are a lot of factors for the public to consider, he’s all for the proposal. Private ownership of the store, he said, would be the best option, but if the Mahurins can’t find someone to buy Stub’s, other options need to be explored.
“We need a grocery store in town pretty bad in my opinion,” Bauer said.
Bauer said it’s tough for grocery stores in rural towns today. The advent of Walmart has changed not just those towns, but all of America, he said. Also, many people who live in Erie drive to work in other cities every day and some may shop in those other towns before coming home.
The mayor said he and the city council have received feedback “in both directions.” Although personally he hasn’t heard any real opposition, Bauer said council members have.
“I suppose there is because there is always naysayers,” he said.
Besides mentioning the obvious benefit of convenience for residents, the city’s survey lists the retention of about $20,000 in sales tax revenue if the store remains open. It also lists the potential loss of jobs if the market closes. Shirley Mahurin said the store usually employs seven or eight people, about half of whom work full time.
“Most of our employees live right here in town,” she said.
Despite the struggles that many grocery stores in rural communities face, she said Stub’s has done “fairly well.” The economic development committee, which includes local bankers, were given the store’s financial records before making a recommendation to the city council. The survey states that the committee believes based on current information that the store would support itself without requiring additional funds from utility account holders.
Lifetime Erie resident Carol Harris thinks the city should buy the store if that’s what it takes to keep it open.
“I realize there will come a time when I can’t go out of town to get groceries, and I think we need a store,” she said.
Her daughter, Cindy Friedrich, a city council member, agrees that a grocery store is probably in the best interest of the community that consists largely of retirees, some of whom can’t or don’t want to drive out of town for groceries.
Friedrich initially was in favor of the city buying Stub’s, but now she’s not sure. She wants to study the finances involved before making a decision. Eddie Hibbs III, owner and publisher of The Erie Record, brought up a lot of questions during a council meeting this week, she said. The questions, Hibbs told the council, were conveyed to him from the public.
“There are quite a few questions that still need to be answered,” Friedrich said.
Friedrich said concerns have arisen recently that she hadn’t even thought about. She said the city was just getting financial information a little bit at a time. Mostly, she needs more details about the plan, as does the rest of the community.
“There are so many rumors flying around that people don’t know who or what to believe,” Friedrich said.
Friedrich hasn’t heard much about the feelings of the public on the issue, but there certainly are some who feel strongly against the city buying a grocery store.
Millford Hall voiced his opposition succinctly on Tuesday as he visited with a friend at Club Tropics, a bar and grill in Erie.
“I think it’s crazy,” Hall said.
Club Tropics worker Bridget Becker was in step with Hall. She said by the time the city pays for everything, there will be no money to be made, and the Erie residents will have to make up for the loss. Becker agreed with another person at Club Tropics who said the restaurant employees would have to become city workers, possibly with higher pay and full benefits, including a payment from the city into the Kansas Public Employees Retirement System.
By Tuesday, Erie resident Myles Buckridge checked “No” on his survey and mailed it back. He said the grocery store should remain a private business. He also has the same concern as others about the possibility of the store not being successful as a city operation.
“If it loses money, everybody’s got to pick up the tab to cover the losses,” Buckridge said.
Buckridge said the few other people who have discussed the issue with him agree with his sentiments.
“Why should I help out a losing business?” Buckridge said.
Keeping grocery stores open
Although the economic development committee thinks the store would support itself, the residents’ concerns about the store closing perhaps aren’t without merit. When the Mahurins leased the building to G&W Foods when they first planned to retire, G&W closed the store abruptly in the following year, citing a lack of profits.
A city-owned store, however, would only need to break even because city officials would only be concerned about keeping the store open rather than making a profit.
Once a grocery store in a rural community closes and has remained closed for a time, it’s difficult to reopen another store successfully, said Rial Carver, a program manager for Kansas State University’s Rural Grocery Initiative. Carver, who assisted with developing the Erie survey, said when a rural grocery store closes, people are forced to change their shopping patterns and become accustomed to buying groceries elsewhere.
The Rural Grocery Initiative studies grocery stores in rural communities statewide, and Carver said there is a trend for those communities in losing their only source of fresh and healthy food. In 2008, there were 250 grocery stores in cities with a population of 2,500 or less across Kansas. That number dropped to 200 by 2018.
“Grocery stores are closing. That is a trend that is seen in Kansas but also in rural cities across the country,” Carver said.
The Rural Grocery Initiative tries to help rural communities keep their grocery stores open because of their offerings of fresh, healthy food and their positive impacts on the local tax base and the employment the stores maintain. City leaders also point to a local grocery store as a recruitment tool for prospective residents.
“It’s also just a community hub, so we’ve seen grocery stores act as a gathering place for a rural community that may not have another place to gather,” Carver said.
The Rural Grocery Initiative works with communities struggling to keep their stores open and offers alternatives to the best business model of private ownership.
“What we have seen is that when that model just doesn’t exist, it can be helpful in considering alternatives to that model,” Carver said.
One such model gaining steam is city ownership.
The Rural Grocery Initiative points to the St. Paul Supermarket as a success story in that growing trend.
St. Paul had gone without a grocery store since its only one closed in 1985. Mayor Rick Giefer envisioned the city opening a new store ever since he was first elected about 15 years ago. A development committee submitted an application for a U.S. Department of Agriculture no-interest loan, and the loan was guaranteed by the city after an overwhelming vote of support from the town’s residents in 2005. St. Paul Supermarket opened in 2008 with public money that built the store, the St. Paul Area Community Development Corp. and a volunteer group of residents who invested their own money. Joe and Sue Renfro, who formerly owned a store in Altamont, bought the inventory and managed the new store. The Renfros retired in 2013, and the city council decided the city should assume operation of the store, buying out the CDC and the managing couple. St. Paul Supermarket is now a fully municipally owned business and has remained opened for about 12 years.
While some in Erie see the grocery store workers being city employees as a hindrance to the store’s ability to stay afloat, the St. Paul Supermarket’s workers have been city employees since 2013.
Instead of being an obstacle, Carver said, store workers being city employees could have a positive aspect. The Erie store could attract a talented manager from out of town because of the city benefits offered, she said.
The city of Caney, where former Parsons City Manager Fred Gress is city administrator, is considering buying the town’s only grocery store, Carver said.
The Rural Grocery Initiative also offers advice on other alternatives to rural towns. The co-op model features community members pooling their money to buy a store. A group of Erie residents considered that model but ultimately decided against it. The Mahurins sold their Stub’s Market in Moran to a co-op, which renamed the store Marmaton Market. The co-op has operated the store for several years now.
Carver said another model is a school-run grocery store. The Leon school district opened Bluestem Mercantile and uses the store as a teaching tool for students.
“What we’ve learned over the years is that each model can work, but it really needs that community buy-in,” Carver said.
That’s why determining if Erie’s residents support the proposal is so important.