Marsh store on hold: Grocery chain halts plan for much-ballyhooed Atlas replacement

October 24, 2005

Farrar broke the news to residents this month after speaking with Arthur Marsh, the store's namesake, who lives in the area.

A source inside Marsh confirmed the project is on hold, but company officials declined repeated opportunities to elaborate.

Marsh is pulling back from the project at a time it's under increasing financial strain. In its most recent quarter, the Indianapolis-based company posted a profit of just $674,000 on revenue of $410 million.

In an August statement, CEO

Marsh Supermarkets Inc. has frozen its plan to build an Arthur's Fresh Market at the former Atlas grocery site at 54th Street and College Avenue, an upsetting turnabout for residents of the north-side neighborhood.

"The community has bent over Don Marsh said "results were not up to our expectations. We have identified a number of cost reduction and other profit improvement actions which we expect to implement during the remainder of fiscal 2006."

Marsh has a negative credit rating of Bfrom Standard & Poor's. In August, Moody's Investors Service placed the company on review for a possible downgrade, in part because of its "modest levels of operating cash flow." Neighborhood residents were jubilant a year ago when Marsh announced it was buying the site of the former Atlas grocery, which closed in 2002 after 55 years in business.

Farrar said Arthur Marsh told her demolition had been scheduled to start by next month. Arthur Marsh is executive vice president of Marsh Supermarkets and is a son of CEO Don Marsh.

City officials hope the project eventually moves forward. In late July, they offered Marsh a five-year tax abatement for the site valued at more than $150,000, said Gordon Hendry, director of economic development.

"Marsh is a great corporate citizen in Indianapolis and we believe they have the best of intentions," Hendry said. Marsh has not accepted or declined the abatement.

Although the city approved Marsh's rezoning plans over the summer, the company never sought work permits, said Justin Ohlemiller, spokesman for the Department of Metropolitan Development.

Plans filed with the city called for the demolition of the former Atlas store as well as the former CATH Inc. coffee shop and a vacant office building. Marsh would then build a 22,400-square-foot Arthur's. If Marsh eventually goes through with the plan, it would be the third Arthur's, a format designed for urban neighborhoods that lack a big-box grocery store.

Meridian Kessler fits the bill, neighborhood residents say.

"There are almost no grocery stores if you go south of the 62nd Street area," said James Garrettson, president of the neighborhood association. "The end result is people are coming north from way south of 38th Street. The first grocery is the Kroger on 62nd Street. The only other grocery store is the Safeway on Illinois Street [at 56th]."

The demographics of the area remain favorable. According to St. Louis-based Colliers Turley Martin Tucker, the average household income within one mile of 54th and College is $74,332 and rising.

"Without question, [the location] would be extremely successful if the right store moved in," said Don Williams, senior vice president and manager of retail for Colliers.

Merchants and neighbors said the animosity toward Marsh would subside immediately if the company broke ground.

"If there were an Arthur's, people would go swarming back," Farrar said.

For the time being, residents say, just picking up the trash would be nice. Small liquor bottles, debris, weeds, shopping carts and a turned-over newspaper kiosk litter the property. The equipment auction advertised on the old Atlas billboard is for last November, not this year.

"In its present state with the fencing all the way around it and the increased amount of graffiti, it's becoming a significant blight on that intersection," said John Byrne, who's a vice president at Colliers and a partner in nearby Yat's Cajun restaurant.

Smoked eel, morel mushrooms and fine meats were just a few of the specialty items that made Atlas a destination for shoppers from across central Indiana.

"People came to Atlas not just from Meridian Kessler," Garrettson said. "They came from Irvington, from the far-west side, the south side. They came simply because they learned it stocked things like Ethiopian purple mambo sauce."

Neighborhood residents say Marsh can capture the same community adoration if it ever moves forward.

"If Arthur's Fresh Market came in, it could be viewed as a specialty store, not as another generic retailer," Farrar said.

Marsh operates 69 Marsh Supermarkets in addition to 38 LoBill Foods stores, two Arthur's Fresh Markets and 161 Village Pantry convenience stores.
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