Brent Bosch (left) and Larry Goebel purchased Jubilee Foods from tony Bosch in October 2001. Teh new store opened August 2000.
By Lori Ehde
A town that only five years ago supported three grocery stores will be down to one following the sale of Jubilee Foods to Glen’s Food Center this week.
According to a purchase agreement signed Saturday, Glen Gust will buy the Jubilee Foods building from Brent Bosch and Larry Goebel, who have co-owned the business since it reopened in its new location August 2000.
Gust will move his operations into the 30,000-square-foot Jubilee building, and the existing 20,000-square-foot building will be offered for sale.
The Jubilee store in Luverne will close its doors Saturday, Jan. 25.
"The trend in the grocery business is toward bigger stores," Goebel said in a statement released Tuesday. "Unfortunately, towns of 5,000 people cannot support more than one bigger store, and we have two here."
Meanwhile, Bosch and his father, Tony, are negotiating the purchase of two Sunshine Supermarkets in Sioux Falls.
"Obviously, this is a huge risk for our organization, but it’s an opportunity I’m looking forward to," Brent Bosch said. "These opportunities don’t come along very often, which, like a lot of things in life, force us to make tough decisions."
Jubilee Foods in Luverne employs about 20 full-time employees, and about 50 others part time.
"We’re going to be taking care of our employees in helping them find jobs," Bosch said.
"Granted this is a negative thing for Luverne, but we’re trying to make this as positive as possible."
Opportunity to expand
Several weeks after Jubilee closes, Gust will reopen the doors as Glen’s Food Center, and his current location on Cedar and Lincoln streets will be closed after 27 years of operating there.
"I’m out of space and out of parking, and it will be a great opportunity for my employees and my customers, if everything works out," he said.
Glen’s currently employs 83 people, about 30 of whom are full-time.
"My concern now is to get someone else in my existing building," Gust said. "There might be a little mini mall downtown, you never know."
Gust said the deal came through so quickly — in the past two weeks — that he hasn’t had a chance to see what interest there might be for a new occupant for his current space.
When asked if his $1.99 milk prices will stay the same, Gust said, "You better believe it."
He said the First National Bank branch will continue its operations there and store policies will remain the same.
"I hope my customers trust me enough to know that I’ll run my store like I always have," he said.
"It’ll just be a newer, bigger operation, I guess. I don’t anticipate any changes other than a new location."
Glen’s will remain open to customers through the transition to the new building, but may need to close early on a final Sunday night to move the computers.
‘Sign of the times’
Both grocers say the deal was driven by market forces.
"It’s a sign of the times," Gust said. "People are a lot more mobile these days. Sometimes they forget their local person is the one supporting all their activities."
Gust said market analysts say towns smaller than 7,500 can’t support two stores. He added that he feels secure that Glen’s will thrive long-term in Luverne.
"Glen’s will be fine. All we need to do is continue as we’re doing taking care of our customers," he said.
Bosch also pointed to competing markets in nearby towns as a reason for closing Jubilee.
"Unfortunately, in this day and age, independent grocers are forced to get bigger or get out in order to compete," he said.
"With stores like Wal-mart 30 miles in two directions from Luverne, and strong local competition, there is no room to expand our business here."
Bosch added that he’s enjoyed his time managing Jubilee in Luverne.
"The last three years of my life living in Luverne have been a very rewarding experience, both professionally and personally."
Goebel said he plans to continue to manage the Rock Rapids Jubilee Store and live in Luverne.
Tale of two groceries and thoughts on Tax Increment Financing
The assessed market value of Glen’s Food Center, located downtown one block north of Main Street, is $400,300.
The 27-year-old business generated $14,102 in property taxes in 2002.
The assessed market value of Jubilee Foods, located downtown one block south of Main Street is $1,351,800.
It contributed $20,380 to local property tax coffers in 2002.
In addition, Bosch paid nearly $31,000 to the city of Luverne as an annual installment on the Tax Increment Financing loan.
Luverne Economic Development Corporation contributed $570,000 in TIF loans to the $3 million project.
TIF is used as a tool to encourage developers to clear away blighted, low-tax-generating properties and to redevelop the land with new buildings that yield higher taxes.
When a new structure is built, the property owner pays the full taxes, but the difference between the original taxable value and the new value is used over a period of years to pay for the cost of redevelopment.
As new owner of the property, Gust will assume the same payments, and will benefit from the 25-year TIF agreement.
When TIF on the Jubilee deal was approved, Gust was among the most vocal residents to oppose it, since Jubilee Foods was an existing thriving business.
Despite the fact that he’ll now benefit from that arrangement, Gust says his opinion remains the same.
"If it’s not creating jobs and bringing new people to the community, then it’s not being used in the right way," he said Tuesday.
"My opinion on TIF is exactly the same."