$300k in Construction Costs is Unaccounted for

There are two tools that are very helpful when trying to understand what is happening with the Bethlehem Food Co-op Market. One is Pennsylvania’s Right-to-Know Law, which compelled the city to share documents. The other is the Freedom of Information Act, or FOIA, the law that compels the federal government, in this case the Department of Housing and Urban Development, to supply its documents.

The city itself acts as a fiduciary for the Co-op when it comes to the two grants it received. One grant was a Community Development Block Grant (CDBG) for $162,500. The other grant, significantly larger at $2.9 million, was a HUD grant.

The City of Bethlehem’s $162,500 Community Development Block Grant (CDBG) was intended to cover business planning and development expenses.

Under the agreement, the money could be used for accounting and legal fees, design and project management services, office setup, employee training, salaries and insurance costs related to developing the store. The grant was designed to help the Co-op prepare for opening, rather than to subsidize its ordinary grocery operations indefinitely. The agreement established a performance period of January 1, 2019, through December 30, 2022, and required the project to benefit low- and moderate-income residents.

The $2.9 million federal Community Project Funding grant awarded through the U.S. Department of Housing and Urban Development (HUD) was intended to finance the development and construction of the Bethlehem Food Co-op’s community-owned grocery store at 250 East Broad Street. Unlike the earlier $162,500 CDBG grant, which focused on business planning and preparation, this much larger award was designed to help turn the proposed store into an operating business. The money was budgeted for construction and renovations, refrigeration and other grocery equipment, supplies, occupancy costs, employee salaries and benefits, and project management. The project’s stated purpose was to establish a grocery store serving Bethlehem residents, including those in low- and moderate-income neighborhoods, while supporting local economic development. The original project narrative anticipated that the store would open in January 2024.

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