Cost of Redevelopment Project
Potential Job Creation from Project
Kiar Gamsho grew up in a Detroit-based grocery store family. He worked beside his father throughout high school and college. In his mid-twenties, he decided to join the family business and help expand its reach across the state. Kiar knew the business well and now had an accounting degree but he still needed some guidance on market research and preparing commercial loan packages.
How the SBDC helped
The first store Kiar opened in Kalamazoo had been a success and was welcomed by the community. He was thinking about adding a second location but was uncertain if the community needed two grocery stores. Kiar reached out to the Michigan SBDC Southwest Region for guidance on doing a market analysis. Upon discovering there was such a need, he utilized the services of the SBDC to help him prepare two commercial loan packages for the new project.
The initial project kicked off in 2015 with Kiar obtaining a $1.5 million loan to purchase a shuttered grocery store. Then in 2017, he secured $6 million in financing from the Michigan Good Food Fund as part of an $8 million New Markets Tax Credit transaction with Capital Impact Partners. The $9.4 million project allowed for the revitalization of the former 60,000 square foot supermarket into a multi-purpose complex to house a 30,000 square foot urban grocery store, a 13,000 square foot hardware store, and an additional 14,000 square foot for future tenants. The project created close to 70 new jobs initially with the potential to reach more than 115 once the complex is full.
Kiar Gamsho is a second-generation grocer. His father, Sam, has been a grocer for more than three decades and is a member of the family-owned Shina Group based out of Detroit. Being the child of an entrepreneur typically means you work in the family business and this was definitely true for Kiar. When not focusing his time on his studies in high school and college, he worked side-by-side with his father learning the business.
In 2005, Kiar graduated from Oakland University with a Bachelor of Science degree in Accounting. Afterwards he worked a short time as an accountant in the public sector before leaving his “desk” job to pursue his true passion of following in his father’s footsteps. This lead Kiar to an exciting opportunity to jump back into the family business, Shina Group, and be part of the company’s expansion outside of Metro Detroit.
About the same time, the Northside Neighborhood of Kalamazoo had just lost its community redevelopment-grocery store and reached out to the family for help in filling the void. In 2009, a team from the company –Kiar, his father (Sam), his brother (Tom), brother-n-law (Dean Sadek), and Sam Shina –set out to bring their urban grocery store concept to the vacant store. The following year they opened their first West Michigan store –Park Street Market –in June 2010. Kiar served as Managing Director of the store.
Fast forward a few years, the Park Street Market is doing well and has received numerous accolades from the community, and rumors hit the streets of Kalamazoo that another long-time supermarket is struggling. It was also at this time that Kiar met Business Consultant, John Schmidt, from the SBDC Southwest Region. John has an extensive background and executive-level expertise in the food and restaurant industry, and an equally strong network. Initially, Kiar tapped into the resources of the SBDC to determine if there was a need to add a second grocery store into the Kalamazoo community. Once he had validated there was, he began a dialog with the owners of the struggling supermarket.
As plans for the new store started to fall into place, Kiar worked with John to fine tune his financials and projections for the store, and together they prepared two loan application packages. One for the purchase of the building and the other for redevelopment of the shuttered grocery store.
“John is a wealth of knowledge and serves as a mentor to entrepreneurs and an ambassador for small business,” said Kiar Gamsho, CEO and Managing Director for Park Street Market and Midtown Fresh Market. “He’s always there to answer the tough questions for us, lead us in the right direction, and connect the dots.”
A $1.5 million loan to purchase the building was obtained in 2015. It took a bit longer, lots of leg of work, and a ton of patience before financing was secured to revitalize the complex. In 2017, Midtown Marketplace came to life when the Michigan Good Food Fund provided $6 million in financing as part of an $8 million New Markets Tax Credit transaction with Capital Impact Partners.
The $9.4 million redevelopment project included the total renovation of the former 60,000 square foot supermarket and façade into a new multi-purpose complex. Ideally the complex will feature a diverse mix of tenants, with the grocery store taking up half the space, that creates a lifestyle center for the community. The renovation also included the reduction of their footprint by eliminating close to 3,000 square feet from the building and adding more green space to the 5-acre lot. Upon completion, the project will have created more than 115 new jobs between the construction workers and employees of the new tenants.
“He’s been my quarterback,” Kiar shared. “From encouraging us to look at the New Market Tax Credits, setting up meetings with City and State officials, to connecting us with local vendors, John has been our go-to-guy in pushing Midtown forward.”
In 2018, Midtown Fresh Market and ACE Hardware opened their doors at the new complex. The remaining 14,000 square feet of space will be built-to-suit with the possibility of adding another four to seven businesses.
Midtown Fresh Market is a full-service grocery store dedicated to providing fresh and organic produce, and products from local vendors. During the harvest season you’ll find produce from many local farms. You can also enjoy coffee from Zingerman’s Coffee Company and find delicious baked goods exclusively from the famous local baker, Maria Brennan, and her Victorian Bakery team. The store also features an on-site butcher, a diverse selection of ethnic food, kitchen and café with two chefs, craft beers, specialty wines, and more.
Within the first six months of operations, Midtown Fresh Market created close to 50 jobs and saw more than a 110% growth rate. Plus, they were also named the Best Small Business for the SBDC Southwest Region.The market has also been selected as a finalist for Consumers Energy Project of the Year Award.