Illinois New Stores in Food Deserts Program

The Illinois New Stores in Food Deserts Program provides Illinois-based grocery operators and local government entities with reimbursement grants of $500,000 to $5.2 million to establish new grocery stores in Illinois census tracts that qualify as food deserts. Administered by the Illinois Department of Commerce and Economic Opportunity (DCEO) as part of the broader Illinois Grocery Initiative (authorized by Public Act 103-0561), the program has approximately $20.8 million in total funding available in the current round and anticipates 4 to 8 awards. The goal is to combat food insecurity by supporting the creation of grocery stores in areas that meet specific criteria related to poverty, population density, and limited fresh food accessibility.

Eligibility is limited to units of local government and to independent grocers or cooperatives with fewer than 500 employees and no more than four grocery locations (both for-profit and nonprofit organizations qualify). To be eligible, the proposed grocery location must be within a census tract that meets both a low income threshold and a low food access threshold. Low income thresholds include a poverty rate of at least 15 percent, or a median family income below the statewide median (for non-metropolitan tracts) or below the greater of the statewide or metropolitan area median (for tracts within a metropolitan statistical area). Low food access thresholds require that at least 33 percent of the tract's population (or 500 residents) live more than 10 miles from the nearest grocery store in rural tracts, or more than half a mile in urban tracts. The store must be classified under NAICS code 445110 (supermarket or grocery retailer) or as a meat, fruit and vegetable, or seafood retailer, cannot derive more than 30 percent of its revenue from alcohol and tobacco sales, must sell unprocessed fresh foods such as meats, fruits, and vegetables, and must prepare to accept both SNAP and WIC benefits. Prior recipients of New Stores in Food Deserts grants are not eligible to receive additional grants at the same location.

Grant funds may be used for real estate and related expenses, site development, construction of a new facility or renovation of an existing facility, furniture, fixtures, and equipment, and working capital for the first 24 months of store operations (including employee wages, utility costs, initial inventory of food, and other operating expenses that support the retail sale of food). This round of the program also introduces the option to incorporate pharmacy operations into the new grocery store to help address the lack of access to prescription medications and pharmacist consultations in some communities. Applicants incorporating a pharmacy may also fund initial inventory of prescription medications and pharmacy-related capital expenditures through the grant. Inclusion of a pharmacy is not required, and applicants are not penalized for excluding one. Grant funds cannot be used to purchase equipment, supplies, or inventory unrelated to the provision of food (such as lottery equipment or non-food inventory), and expenditures associated with delivery services (such as vehicles and driver wages) are not eligible for reimbursement.

Applicants who do not incorporate a pharmacy are required to provide a 25 percent match of total project costs (representing a 1:3 match), while applicants incorporating a pharmacy have a reduced match requirement of 15 percent. Matching funds may come from any non-state sources such as local municipal funds, federal funds, or private investment, and in-kind contributions and expenditures incurred prior to receipt of the Notice of State Award cannot count toward the match. Grants are issued on a reimbursement basis, with grantees submitting paid invoices for approved expenditures. Applicants may request an advance of up to two months' worth of expenditures at DCEO's discretion. Applications are scored competitively across three main categories (Need, Capacity, and Quality), and each application must include at least two Letters of Support (with at least one coming from an elected official serving the project area).