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Stepherson Incorporated, dba Superlo Foods

ID: ED20191102
Inner City Economic Development Loan
County Comission District: | City Council District:

Summary

William R. (Randy) Stepherson on behalf of Stepherson Incorporated (Applicant), dba Superlo Foods, was approved for a
$100,000 Loan to complete equipment financing for a new supermarket at 2269 Lamar Avenue. Total costs for construction and equipment are estimated to be $650,955 excluding approximately $650,000 for inventory and the existing building value of $750,000.

Launched in 1944 as Stepherson Brothers, the company has operated continuously in Memphis as Big Star, Stepherson's Food Store and Superlo Foods. Randy Stepherson and his partner Bob Reed have owned the stores since buying Mr. Stepherson's family interest in 1978. Prior to returning to the family business, Mr. Stepherson was a CPA with Rhea and Ivy. Mr. Reed was a teacher in Cairo, Illinois. Today the company owns seven locations in the City of Memphis and one in Southaven, Mississippi.

With a few exceptions, the company operates in lower income areas. Superlo Foods has an everyday low-price structure and takes great pride in offering customers true savings on their grocery bill. Approximately 25% of the company's business comes from SNAP (Supplemental Nutrition Assistance Program) benefits. The new Lamar location is on the edge of Orange Mound.

This loan will help Mr. Stepherson complete financing for a 37,500 square foot supermarket in space formerly occupied by Kroger. There are 96,574 people within a 3-mile radius with median household incomes of $31,065. The project is in a severely distressed New Markets Tax Credit Eligible Census Tract with a 48% poverty rate.
Limited food options are available at a nearby Sav-A-Lot and an ALDI almost two miles away.

This store will create approximately 28 full-time positions at an average wage of$35,513 in addition to more than 40 part-time positions. As important, the investment will prevent a prominent, yet vacant, building from becoming blighted.

The Applicant will be seeking a PILOT from EDGE at the November Board Meeting to reduce operating expenses. Housing and Community Development is financing $100,000 for building improvements. Inventory is being financed through the distributor. The Applicant is requesting a $100,000 EDGE loan to fill a gap between these sources and private financing, making this project financially feasible.

In addition to the City of Memphis, the project is supported by the Mt. Pisgah CME Church.

Loan Term:

7

Interest Rate:

2

Projected New Jobs:

28

Projected Retained Jobs:

Not applicable

Average Payroll:

$35,513

Loan Amount:

$100,000

Loan Use:

Not applicable

Total Projected Capital Investment:

$100,000
Real Property:
Not applicable

Acquisition:
Not applicable

Construction:
Not applicable

Renovation:
Not applicable

Machinery & Equipment:
Not applicable

Furniture, Fixtures, Office:
Not applicable

Equipment:
Not applicable

Fees & Soft Costs:
Not applicable

Permanent Working Capital:
Not applicable

Miscellaneous:
Not applicable

Approved

11/6/2019

Closing

Not approved

Stepherson Incorporated, dba Superlo Foods

2269 Lamar, Memphis, TN 38114