Dollar Store Restriction — New Orleans

Decisions made by city officials in the aftermath of Hurricane Katrina in 2005 left some devastated areas of the city, especially New Orleans East and the Algiers neighborhood, particularly vulnerable to the invasive spread of dollar store chains. Almost 15 years later, these neighborhoods are facing a surplus of these stores. Three major chains now operate 36 locations in the city, but a full third of those concentrate in New Orleans East, an area with a population of about 75,000. Algiers, a neighborhood with about 25,000 residents, has six dollar stores (even more per resident than “The East” has).

One consequence of an over-abundance of dollar stores is that they crowd out full-service grocery stores, making it hard for local grocers to eke out a living and discouraging investment by traditional supermarket chains. Today, New Orleans East only has three full-service grocery stores and many of the city’s neighborhoods have qualified as “food deserts,” particularly because dollar stores do not carry fresh foods.

Fortunately, communities in New Orleans are taking action. As the dollar stores multiplied throughout the city, residents and businesses in New Orleans East and Algiers vocalized their concerns with representatives on the New Orleans City Council. Councilmember Cyndi Nguyen, who represents New Orleans East, and Councilmember Kristin Gisleson Palmer, whose district includes Algiers, took lead on confronting the problem.

Councilmember Palmer told us over email, “This is an issue that is critical to both of our districts considering the high number of small box retailers in the East and in Algiers. Our neighborhoods deserve a wide variety of businesses to address their day to day needs, and that means in part, ensuring the proper spacing between this type of retailer, to prevent them from dominating specific areas in the city.”

Standout Report and Recommendations

As an initial step in confronting dollar store concentration, the Council passed a motion in June of 2018 directing the New Orleans’ City Planning Commission to conduct a comprehensive study to “appropriately classify, define, and regulate ‘small box discount stores’” along a number of dimensions and criteria. The resulting study is one of the most detailed documents to date on the dollar store crisis. It also presents key findings that are consistent with ILSR’s own research, including that the number of dollar store locations generally correspond to low median income levels and that neighborhoods with the strongest dollar store presence tend to be food deserts.

The report also recommends increasing the allowable square footage for grocery stores and extending the city’s pre-existing Fresh Food Retailer Initiative, which provides direct low-interest and forgivable loans to retailers selling produce in low-income neighborhoods.

On October 17, 2019, the New Orleans’ City Council acted on the study’s recommendations by approving changes to the City’s Comprehensive Zoning Ordinance. These changes limit dollar store oversaturation in the city by creating a two-mile dispersal restriction for the stores that includes New Orleans East and Algiers. A one-mile restriction will apply elsewhere in the city.

On November 7, 2019, also at the recommendation of the Planning Commission, the City Council approved several regulatory changes to encourage agricultural development. This City altered zoning language and use standards related to food, allowing urban farmers to produce, package, and sell value-added food products on land designated for for agricultural use.

Public Support for Dollar Stores Rules and Recommendations

In developing their new rules, the Planning Commission engaged a range of experts and community members — including grocers, small business owners, and other stakeholders — and garnered a strong show of support. Elisa Muñoz-Miller, Executive Director of New Orleans Food Policy Advisory Committee, a group that advised and advocated for the changes, welcomed the decisions. “The changes to the CZO reflect the Council’s commitment to ensuring all New Orleanians have access to fresh, healthy food,” she said. Dana Eness and Maryann Miller of New Orleans’ Stay Local, a local independent business alliance, testified in support of the changes on behalf of their members, and cited ILSR’s work on the issue. “This is the right step after finding that the proliferation of dollar stores is deterring full-service grocers from opening in some neighborhoods.”

More


Below we have excerpted the relevant zoning ordinance language adopted by the New Orleans. The City Council’s agendas are available here for October 17, and here for November 7. The full text of the City’s Zoning Ordinance can be found here.


The dollar store motion appears in the City Council’s agenda from October 17 this way:

  1. ZONING DOCKET NO. 78/19 –CITY COUNCIL MOTION NO. M-19-237

Brief:

Requesting Text amendments to the Comprehensive Zoning Ordinance that will incorporate recommendations and initiatives contained in the2018 “Small Box Retail Diversity Study” including but not limited to:

  • Establish and/or revise definitions of Small Box Variety Store, Fresh or Fresh Frozen Food, and Grocery Store.
  • Define and or update applicable use standards for Small Box Variety Store. Small Box Variety Store standards Should include area restrictions and spacing requirements between such stores, as well as trash, litter cleanup, and storage requirements.
  • On use tables found in Articles 7 to 17, indicate zoning districts where the following uses are permitted or conditional: Small Box Variety Store, Grocery Store, and Retail Goods Establishment.
  • Establish and/or update maximum total floor area for qualifying grocery stores in food desert areas.
  • Establish and/or strengthen site design standards applicable to Small Box Variety Store, Grocery Store, and Retail Goods Establishment, to promote neighborhood compatibility.

Location, Citywide. The recommendation of the City Planning Commission being “FOR MODIFIED APPROVAL”.

Annotation:(All Cms., Cn. Deadline 11/4/19).

ON DEADLINE. APPROVED. See Motion No. M-19-420.


Proposed Changes to Comprehensive Zoning Code [From Zoning Docket Proposal approved October 17, 2019]

Proposed deletions are shown below in strikethrough text while proposed insertions are shown below with new language shown in underlined text.

  1. Permitted and Conditional Uses

Article 10, Section 10.2.A –Permitted and Conditional Uses

Article 12, Section 12.2.A –Permitted and Conditional Uses

Article 14, Section 14.2.A –Permitted and Conditional Uses

Article 15, Section 15.2.A –Permitted and Conditional Uses

Article 16, Section 16.2–Permitted and Conditional Uses

Article 17, Section 17.3.A –Permitted and Conditional Uses

2. Maximum Total Floor Area for Commercial Uses

Article 18, Section 18.3 –SC Suburban Corridor Use Restriction Overlay District 

18.3.A Applicability 

[…]

18.3.B Use Restrictions

When allowed as a permitted use in the base zoning district, the following uses require conditional use approval in accordance with Section 4.3

  1. Bar
  2. Car Wash
  3. Restaurant, Fast Food
  4. Retail Sales of Packaged Alcoholic Beverages. Grocery stores are exempt.

18.3.CSC Sub-District Standards

The SC Sub-District applies to all lots with frontage on any of the below streets:

  1. Newton Street
  2. General Meyer Avenue

18.3.C.1 Floor Area Limitation Increase

Grocery stores, as described in Section 26.6, that dedicate thirty percent (30%) or more of shelf space and display area to fresh or fresh frozen foods, as described in Section 26.6, shall be entitled to an additional 5,000 square feet of floor area by right.

 

Article 18, Section 18.4 –ENORC Eastern New Orleans Renaissance Corridor Use Restriction Overlay District

18.4.A Applicability

[…]

18.4.B Use Restrictions

1.When allowed as a permitted use in the base zoning district, the following uses require conditional use approval in accordance with Section 4.3:

  1. Bar
  2. Retail Sales of Packaged Alcoholic Beverages. Grocery stores are exempt.

[…]

18.4. CENORC Sub-District Standards

The ENORC Sub-District applies to all lots with frontage on any of the below streets:

  1. Hayne Boulevard
  2. Downman Road
  3. Morrison Road

18.4.C.1 Floor Area Limitation Increase

Grocery stores, as described in Section 26.6, that dedicate thirty percent (30%) or more of shelf space and display area to fresh or fresh frozen foods, as described in Section 26.6, shall be entitled to an additional 5,000 square feet of floor area by right.

Article 18, Section 18.5 HUC Historic Urban Corridor Use Restriction Overlay District

18.5.A Applicability 

[…]

18.5.B Use Restrictions

When allowed as a permitted use in the base zoning district, the following uses require conditional use approval in accordance with Section 4.3:

[…]
  1. Retail Sales of Packaged Alcoholic Beverages. Grocery stores are exempt.

18.5.CHUC Sub-District Standards

The HUC Sub-District applies to all lots with frontage on any of the below streets:

  1. N. Claiborne Avenue
  2. St. Claude Avenue

18.5.C.1 Floor Area Limitation Increase

Grocery stores, as described in Section 26.6, that dedicate thirty percent (30%) or more of shelf space and display area to fresh or fresh frozen foods, as described in Section 26.6,shall be entitled to an additional 5,000 square feet of floor area by right.

Use Standards

Article 20.3.MMM –Small Box Variety Store

  1. A small box variety store is prohibited within two (2) miles or 10,560 feet, of any other small box variety store, except within the following boundaries where a small box variety store is prohibited within one (1) mile, or 5,280 feet, of any other small box variety store. The required separation distance must be measured in a straight line from the nearest point on the lot line of the other property occupied by a small box variety store.
  2. The area generally bounded, on the east bank of the Mississippi River, by the Orleans/Jefferson Parish line, Metairie Road, Interstate 10, Norfolk-Southern Railroad track, Orleans Avenue, City Park Avenue, Wisner Boulevard, Interstate 610, Florida Boulevard, the Orleans/St. Bernard Parish line, and the Mississippi River; on the west bank of the Mississippi River, by Atlantic Avenue, Bodenger Boulevard, the Orleans/Jefferson Parish line, and the Mississippi River.
  3. One litter can shall be placed for every thirty (30) linear feet of street frontage. At least one (1) litter can shall be placed directly outside the primary entrance. Where more than one (1) litter can is required, the operator shall place additional cans outside the structure in locations generally used by customers, according to their discretion.
  1. The operator of the small box variety store shall provide daily litter cleanup of the site and along the public rights-of-way abutting the property.
  1. Outside storage is prohibited except for propane tanks. All business, servicing, processing, and storage operations shall be located within the structure.

 

Article 26, Section 26.6 –Definitions 

Small Box Variety Store: A retail store between 5,000 and 15,000 square feet that sells at retail an assortment of physical goods, products, or merchandise directly to the consumer, including food or beverages for off-premises consumption, household products, personal grooming and health products, and other consumer goods. Small box variety stores do not include small box stores that:

  1. contain a prescription pharmacy;
  2. sell gasoline or diesel fuel;
  3. primarily sell specialty food items (e.g. meat, seafood, cheese, or oils and vinegars);
  4. dedicate at least 15% of shelf space to fresh or fresh frozen foods; or
  5. dedicate less than 5% of shelf space to food sales.

Fresh or Fresh Frozen Food: Food for human consumption that is unprocessed, or otherwise in its raw state; food that was quickly frozen while still fresh.1This includes unprocessed meat and seafood.

 

Grocery Store: A retail establishment primarily engaged in the sale of items in multiple of the following categories: a general line of groceries, packaged frozen food, dairy products, poultry and poultry products, confectioneries, fish and seafood, meats and meat products, fresh fruits and vegetables, and other grocery and related products where fresh or fresh frozen foods including fresh meat, poultry, seafood, and produce make up 25 percent or more of the shelf space and display area. A grocery store with at least 20,000 square feet of gross floor area is authorized to sell packaged alcoholic beverages.

 

Lastly, the City Council motion directs the City Planning Commission to consider establishing and/or strengthening site design standards applicable to Small Box Variety Store, Grocery Store, and Retail Goods Establishment, to promote neighborhood compatibility. The precise language for the text change would be left to the discretion of the City Planning Commission.


Proposed Changes to Comprehensive Zoning Code [From Zoning Docket Proposal approved November 7, 2019]

The motion proposes to incorporate the recommendations contained in the 2018 “Small Box Retail Diversity Study”. These recommendations include amending the definition of “Agriculture”, establishing a definition of “Home-Processed Food Products”, and amending several use standards of agriculture uses, as follows. The proposed language is shown below with new language shown in underlined, bold text and deleted language in strikethrough text.

Article 26 –Definitions

Agriculture. Land on which crops are grown and/or livestock are raised for sale, commercial use, personal food production, donation, or educational purposes. Retail sales and home food processing are permitted for all agriculture uses, subject to Section 20.3.C.

***

Home Processed Food Products. “Low-risk foods” in accordance with LA Rev Stat § 40:4.9. Home processed food products do not include animal products.

***

Article 20, Section 20.3.C – Agriculture

 

20.3.C.1 – Additional Bulk & Yard Regulations

All structures and other improvements are subject to the bulk and yard regulations of the district, except as provided below:

  1. There are no yard requirements for the planting of crops.
  2. All structures used for the keeping of livestock shall be located a minimum of twenty-five (25) feet from any lot line. This does not apply to apiaries, chicken coops, pigeon coops, and aquaponic structures, which shall meet the accessory structure requirements of Section 21.6.
  3. Accessory structures associated with agricultural uses are permitted on lots without a principal structure.
[…]

***

Article 20.3.C.3 – Food Preparation, Processing, and Packaging

  1. No food or other products of any plants or livestock may be prepared, processed, or packaged in any residential district, except in the R-RE District. However, the canning of plants or plant products Home food processing is permitted as part of any agricultural use.
  2. Food may be prepared, processed, or packaged at an agricultural use located in any non-residential zoning district in which food processing is a permitted use, or in any zoning district where food processing is a conditional use, upon approval.
  3. In any zoning district in which food processing is classified as a conditional use, a property owner may apply for a conditional use to permit the preparation, processing, or packaging of food or other products of any plants or livestock raised on the agricultural use.

[…]

***

Article 20.3.C.6 – Retail Sales

Retail sales for an agricultural use are permitted at farm stands within the Open Space Districts, Rural Development Districts, and any non-residential district, in all zoning districts in which agriculture is a permitted use, or, where it is a conditional use, upon approval, subject to the following standards:

a. Farm stands shall conform to the provisions of Section 21.6.

b. Retail sales are limited to the following:

  1. Crops grown and/or livestock raised on the farm where the farm stand is located.
  2. Other unprocessed food products, or home processed food products such as jams, jellies, pickles, sauces, or baked goods created on the farm where the farm stand is located.

 

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Charlie Thaxton

Charlie Thaxton was a researcher with the Institute for Local Self-Reliance’s Independent Business Initiative in 2018-2019. He studied local economies, small businesses, civics, and their connection to social capital and wellness.