Disappointing Decision by Kroger Company to Shut Down 2 Seattle QFC Stores; Future Plans for Key Wedgwood Site



APRIL 4, 2023 UPDATE: Wedgwood Community Council hears again from new developer of the shopping center

The Wedgwood Community Council again hosted the local real estate developer that has big plans to construct a 5-story housing project with street-level retail and underground parking, anchored by a new grocery store on 35th Ave NE at NE 85th Street. That level of density is already allowed by the current zoning on that parcel.

Many constituents know I’m not shy about leveraging my former private sector experience to go toe-to-toe with real estate developers to maximize benefits to the public from new projects. But, frankly, Wedgwood couldn’t do much better than having Security Properties on this project. There are several advantages with Security Properties: (a) headquartered in Seattle (appreciation for and accountable to their hometown); (b) a national footprint, so they have extensive experience and have spread their investment risk; and (c) their business model is a long-term hold rather than “buy, build, then bye-bye.” Moreover, they have agreed to honor my top requests: (1) listen carefully and communicate frequently to the neighborhood; (2) build out enough retail space to attract a grocery store AND enable all existing retail stores to return (though some will decide not to return); and (3) provide some affordable housing on site. Thus far, I believe they have gone above and beyond, despite City Hall recently watering down requirements for developers to seek public input on proposed projects.

The elephant in the room for many neighbors is, “What will happen to our Wedgwood Broiler?” While space will be provided for the beloved Broiler to return, that’s up to the owners of that small business and they have signaled they might not return. While it’s true that newly constructed buildings often cause permanent displacement by charging higher rents, which — along with the need to hibernate or relocate for 2 years of construction — make it hard for mom & pop (single location) businesses to survive, the owners of the Broiler simply might not want to keep it going :(. Stay tuned.

This big new project is a great reminder for why it’s a great time to get involved in your community council. To get involved with the Wedgwood Community Council (which meets on the 1st Tuesday evening of each month), CLICK HERE and for other Northeast Seattle neighborhoods, CLICK HERE.

  • For the developer’s website of the proposed project, CLICK HERE.
  • For the Wedgwood Community Council’s detailed announcement of their April 4, 2023 meeting, CLICK HERE.
  • For the minutes of the November 2022 community council meeting with the developer, CLICK HERE.
  • To provide comments directly to the developer, CLICK HERE.

AUGUST 2, 2022 UPDATE: Council Ends Extra COVID-era Hazard Pay for Seattle Grocery Workers

While the grocery worker hazard pay requirement would have ended whenever the Mayor Harrell ends the Civil Emergency declared back in March 2020 at the outset of the COVID pandemic, I appreciated the mayor sending to the Council legislation (Council Bill 120372) to end the extra hazard pay. Seattle has been requiring mid-size and large grocers to pay $4/hour extra to its frontline workers since the first quarter of 2021. While I supported that original hazard pay, its past time to end it (see January 25, 2022 blog post for key reasons). Consistent with my votes in December 2021 and January 2022, I voted to end this unique hazard pay and, this time, I was joined by a majority of my colleagues. The hazard pay requirement will end 30 days after the Mayor signs his bill (i.e. in September of this year).

JULY 29, 2022 UPDATE: Redevelopment Plans for Wedgwood Shopping Center

As mentioned in the June 29, 2022 edition of the Daily Journal of Commerce and discussed recently at the Wedgwood Community Council, the Wedgwood shopping center on the southeast corner of 35th Ave NE and 85th Street (you know — home to the Broiler and Van Gough Coffee) is likely to be redeveloped. Normally, I would not comment on a potential purchase in the middle of its due diligence period, but it was already reported in the media — so here’s an excerpt from the article:

“The 2-acre North Seattle property, owned by an area family, hasn’t traded in decades…Now, with architect Solomon Cordwell Buenz, prospective buyer Security Properties has filed an early redevelopment plan. The proposal hasn’t yet entered design review. It describes a midrise apartment building with 280 units over retail/commercial space. The latter would have 34,500 square feet for an unnamed grocer on the north corner, at North 85th Street. On the south corner, North 82nd Street, would be another 14,000 square feet of commercial space. Five stories seems likely for a site that’s zoned up to 55 feet. Security Properties has ample experience with similar midrise projects like the planned Magnolia Albertsons redo, and past Fremont PCC and apartments…Security Properties says it would like to retain current tenants in the new development.”

I reached out to Security Properties to encourage them to conduct a robust community engagement process. Security Properties is a highly experienced developer/owner, based in Seattle, but with a national footprint owning an array of multifamily housing and mixed-use developments. They have already reached out to the existing commercial tenants there and want to bring back a grocery store if they proceed to redevelop that important site.

If you want to stay up to speed on this development and/or provide input, I recommend participating in the Wedgwood Community Council: https://www.wedgwoodcc.org/getinvolved/

JANUARY 25, 2022 UPDATE: Voting to Overturn Mayor’s veto

The legislative journey of Seattle’s ordinance adopted a year ago (January 2021) to require owners of grocery stores in Seattle to pay their workers hazard pay of an additional $4 per hour continues:  just last month, the City Council voted 8 to 0 to sunset those additional payments, but former Mayor Durkan surprisingly vetoed Council’s reasonable sunset bill as she departed office. Then, this week, a majority of the Council reversed itself by voting to sustain (accept) her veto, citing various reasons such as the uncertain future of the coronavirus.  

While I voted for the original bill to support Seattle grocery workers with hazard pay AND I supported efforts to keep it in place for a full year due to the “delta” variant of the coronavirus, I was torn about whether to continue those payments into 2022.  Several of my colleagues made reasonable points to uphold Mayor Durkan’s decision.  Ultimately, however, I decided to be consistent with my December 2021 vote and so I voted to override Durkan’s veto so that the hazard pay requirements could sunset in 30 days. But only our newly elected Councilmember Sara Nelson and I voted to override, so the special hazard pay for just grocery workers will continue for an unknown amount of time – until Mayor Harrell ends the official civil emergency, unless another bill is introduced to sunset it sooner. (One of the problems with using the civil emergency date for an end date for relief measures is our budget officials may want us to keep the civil emergency orders in place even after the public health concerns have subsided so as to ensure maximum reimbursement from the federal government on virus-related programs.)  

For Seattle Times coverage of my Council colleagues voting to sustain (keep) former Mayor Durkan’s veto, CLICK HERE.

I want to acknowledge that grocery workers — and workers in numerous industries that bravely serve Seattle every day — should ideally be paid more and be able to work the quantity of hours they need. A key question for me is, when is it a city government’s role to intervene and require business owners to pay above their current compensation? The pandemic has spurred the creation and expansion of many relief programs funded by several different sources (the best from the federal government which does not need to balance its budget) — and I have supported nearly all these interventions because a pandemic is an extraordinary crisis warranting extraordinary responses.  

Several constituents voiced concern with my original vote in January 2021 to support grocery workers after the Cincinnati-based Kroger company announced the closing of its beloved QFC grocery store in Wedgwood. That was a difficult vote, but I stand by the decision. Tellingly, as soon as the Council sunset the hazard pay in December 2021, QFC declined to reopen that store, emphasizing their claim that the hazard pay merely accelerated their decision to close an underperforming store.  I expressed my disappointment with Kroger, both when they closed the store and when they refused to reopen. Then Mayor Durkan, without consulting the City Council, ended up vetoing the sunset bill at the last minute, thereby keeping hazard pay in place.   

Reasons to Phase Out Hazard Pay for Grocery Workers:

  • Seattle has already imposed this special hazard pay for a year. 
  • The supplemental pay would end not immediately, but rather after a 30-day notice period. 
  • Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases said this past Sunday, things “look like they’re going in the right direction right now.” https://www.seattletimes.com/nation-world/fauci-says-u-s-omicron-outbreak-going-in-the-right-direction/  This week, BOTH the University of Washington and Seattle University announced a return to in-person classes. For the current trends of COVID cases and hospitalizations, as reported by King County Public Health, CLICK HERE.  
  • Beyond the government-imposed minimum wage and sick leave policies, workers and their employers should typically negotiate compensation and benefits without a local government dictating what it must be. The local union United Food & Commercial Workers (UFCW, Local 21) is effective throughout Washington State in advocating for the grocery workers they represent, in organizing workers who may want to form a union, and in influencing many elected officials.  
  • Temporary hazard pay for grocery workers already ended months ago in all 35 California jurisdictions that originally required it and it has also ended in about half of the Washington State jurisdictions that required it: Bainbridge Island, Federal Way and the unincorporated areas of King County and Snohomish County. (Bellingham, Burien, Edmonds, and Olympia still require it.) 
  • Ending the hazard pay in Seattle could make it more financially feasible for other stores to move into the Wedgwood location and to open new stores throughout Seattle. 
  • As we strive to emerge from the COVID pandemic, I believe it may be time to transition away from the emergency measures we put into place over the past two years, unless such measures are required by public health authorities or funded by the federal government.   
  • Let’s continue to encourage requirements for vaccinations, boosters, the wearing of masks, and other preventative measures strongly recommended by public health authorities. 

Even though the outgoing Mayor kept this intervention in place, her veto was over a month ago and her veto letter left open the opportunity to sunset it soon.  Unless the public health conditions decline substantially, I hope the new Mayor will support phasing out this and other extraordinary interventions that we all supported during the past two years of the pandemic, unless the measures are required by public health authorities or the funding is provided by the federal government.   

DECEMBER 22, 2021 UPDATE:

For Seattle Times article “Mayor Jenny Durkan will use veto to keep hazard pay in place for Seattle grocery workers,” CLICK HERE.

DECEMBER 17, 2021 UPDATE:

For Seattle Times article “QFC has no plans to reopen Wedgwood store, despite repeal of city law that prompted closure,” CLICK HERE.

DECEMBER 13, 2021 UPDATE:

Today the Seattle City Council passed Council Bill 120119 with an 8 to 0 vote to repeal grocery worker hazard pay. As is standard with our legislation, this will go into effect 30 days after the Mayor signs it and she’s expected to sign it within the next 10 days. To read the actual bill that we adopted, CLICK HERE. In addition to encouraging other grocery store companies to consider that location over the past few months, today I reached out again to both QFC and to the owner of the shopping center.

JULY 26, AUGUST 9, SEPTEMBER 13, 2021 UPDATE: Legislation to Repeal Hazard Pay Held Due to Delta Variant

While the Seattle City Council’s Finance Committee on July 9, 2021 recommended the repeal of the temporary grocery hazard pay, the recent surge of the “Delta variant” of the coronavirus persuaded all Councilmembers to hold the legislation until more information could be obtained. For the legislative history, CLICK HERE.

JUNE 24, UPDATE:

City Council will Reconsider Grocery Worker Hazard Pay in July

When City Council passed temporary hazard pay for grocery store workers of an additional $4/hour in January, there were tentative plans for reconsidering the ordinance based on public health indicators in a few months. The original Council Bill stated, “City Council intends to consider modifying or eliminating hazard pay requirements after four or months of implementation and review of the current health, safety, and economic risks of frontline work during the COVID-19 emergency.”  I’m pleased to report that the Finance Committee, chaired by Councilmember Mosqueda, followed through and hosted a panel to revisit the ordinance earlier this month.

Based primarily on safety data and the experiences of grocery workers, the committee determined that it is time to consider ending hazard pay. I want to thank the ordinance’s sponsor Councilmember Teresa Mosqueda, representatives of the employers (grocery store owners), and the grocery workers union UFCW Local 21 for taking the time to have an in-depth discussion. CLICK HERE to take a look at the presentation from Seattle-King County Public Health.

Councilmember Mosqueda plans to have legislation to sunset hazard pay in the Finance Committee on July 9, 2021.

Regarding the beloved QFC store that the Cincinnati-based Kroger Company decided to close in the Wedgwood neighborhood at 35th Ave NE and NE 85th Street, I continue to encourage grocers to expand to that location.

APRIL 22, 2021 UPDATE:

photo courtesy of community leader Gabe Galanda

I was invited by the event organizers to participate in a Thank You and Farewell for the workers, and here are my prepared remarks:

  • I want to thank the grocery workers for serving the community for so many years — and especially during this hazardous time during the COVID pandemic.
  • I want to thank the community leaders who organized this thoughtful funding campaign for the workers in addition to the ongoing support from their union.
  • Today’s event is another reminder of how much the community cares about its neighborhood businesses.
  • As we emerge from the COVID pandemic, we need to make sure every neighborhood has businesses that not only thrive, but also care about the community, too. 
  • Thank you, everyone, for being here today.

I think we can agree we were all disappointed by the Kroger company’s decision to shut down the wonderful grocery store. But that out-of-state company made their decision. Blaming their decision on a temporary City Hall law that benefits workers during COVID doesn’t hold water because that corporation is sitting on $2 billion in cash – and that’s on top of the substantial profits they earned in 2020.

On a positive note, I spoke to QFC earlier this week and they confirmed that there are no layoffs — all the workers who wanted to stay with QFC have a transfer already lined up with no loss in benefits.

I think Kroger’s made a bad business decision to leave this amazing community with its generous customer base and I look forward to welcoming a new store with open arms.

I personally contacted several different grocery store owners to pitch the neighborhood to them.  I’m also in contact with the owner of this entire shopping center so he knows that I’m available to help to attract a new anchor tenant here.  Wedgwood is wonderful and it’s open for business! Also check out the other fantastic small businesses near this location: The Wedgwood Broiler,  Van Gogh Coffeehouse, Wedgwood Hair Studio, Tropical Berry, Blue Poppy Floral, and Wedgwood Ale House.  

For Seattle Times article, CLICK HERE.

APRIL 9, 2021 UPDATE: As reported by KUOW News:

“Bare shelves have appeared at two Seattle grocery stores slated for closure on April 24. QFC said it is closing the stores in part because of Seattle’s $4-an-hour “hazard pay” ordinance.

“Hey, hey QFC! Share your profits, stop the greed!” members of the United Food and Commercial Workers union shouted Thursday as they waved signs outside one of the closing stores, located in the Wedgwood neighborhood of northeast Seattle…

QFC spokesperson Tiffany Sanders said in a statement that the company is now “meeting with each associate at the two affected stores to help them transition into a new position at one of our other locations if possible.”

Cook said she doesn’t know where she’s going yet. But even with this stress, she said getting hazard pay during the pandemic has still been “a major win” and she has no regrets.

“It was the one time ever when I’ve worked in a retail job where I felt like we were important for society,” she said, adding that the extra pay allowed people to take more time off to reduce their risk of getting Covid.

Most grocers granted $2-an-hour hazard pay last April and May. Then this past February, Seattle mandated $4-an-hour hazard pay for frontline grocery workers for the duration of the pandemic.

QFC said Seattle’s ordinance increased operating costs at stores by an average of 22%, which was “financially unsustainable” at the two locations. QFC’s parent company Kroger is closing stores where hazard pay was enacted in California as well.

Sanders said QFC is hosting vaccination clinics for staff, and awarding $100 to every employee who receives it. She said, “We continue to believe that vaccinations — not extra pay — are the surest way to keep our stores safe for all who work and visit.”

For a link to the KUOW article, CLICK HERE.

MARCH 25, 2021 UPDATE (from our newsletter):

A federal judge tossed out the lawsuit by the grocery industry, which attempted to block Seattle’s COVID-era requirement to pay $4 an hour in hazard pay to frontline grocery workers. (Council Bill 119990 is now Ordinance 126274 and it went into effect February 3, 2021.) For the Seattle Times article, CLICK HERE. (Note: King County followed Seattle and passed a nearly identical law for unincorporated areas.) While Seattle’s win in court confirms the legal authorization for the city government’s relief requirements for low-wage grocery workers, it does not help to keep open the beloved QFC that Kroger company has cynically vowed to shutter on April 24. My focus continues in two areas:  (1) do whatever I can as the District City Councilmember to help secure a good grocery or similar store in that location (on the border of District 4 and District 5) and (2) make sure City Hall honors its promise “to consider modifying or eliminating hazard pay requirements after four [sic] months of implementation and review of the current health, safety, and economic risks of frontline work during the COVID-19 emergency,” as stated by the temporary, new law (which I voted for). We need to make sure the sponsors of the legislation keep their word to conduct that review and we need to speed vaccines to all front-line workers, including grocery workers — who the Governor recently prioritized.  If City Hall does not eventually phase out or sunset new taxes or regulatory changes pitched to
the public as “necessary due to COVID,” then I believe what credibility exists between City Hall and the public will erode.

The QFC will remain open at least through April 24 and, while not a permanent substitute for those shopping in person, nearby grocery stores include Safeway on 35th Avenue NE at NE 75th Street, the larger University Village QFC store, the PCC Market on 40th Avenue NE and NE 65th Street, and the Metropolitan Market at 5250 40th Avenue NE. The Traders Joe’s in the University District (5555 Roosevelt Way NE) is probably too far away for most Wedgwood residents, though fans of that store will often go the extra mile.

In addition to support from the grocery workers labor union (UFCW, Local 21), I’d like to thank the community for creating a “Go Fund Me” effort with 100% to benefit the grocery workers, especially those who are not able to be transferred to other QFC stores in the area.  At the same time, I would hope that Kroger company updates its plans and decides to stay for at least the rest of its long-term lease at the current site.

Speaking of Wedgwood, the Wedgwood Community Council has been back in business for the past few months. My office attended their most recently monthly meeting on March 2 (they meet on the first Tuesday of each month). For the WCC’s website and new blog posts, CLICK HERE.

MARCH 9, 2021 UPDATE:

The King County Council followed Seattle’s lead and passed a nearly identical hazard pay increase of $4 an hour for frontline grocery workers within the unincorporated areas of the county. For the Seattle Times article, CLICK HERE.

According to the Seattle Times, County Councilmember Rod Dembowski, who represents the entire Wedgwood neighborhood, sponsored the legislation to acknowledge that grocery workers are “essential to the public function of getting food into people’s hands and homes,” he said at the bill’s introduction last month. Hazard pay was given to grocery store employees at the beginning of the pandemic but was inexplicably cut off, Dembowski said: “The pay went away, but the pandemic didn’t and the risk didn’t.” “I think that it’s the right thing to do for people who are going above and beyond the regular call of duty,” Dembowski said.

FEBRUARY 16, 2021 (original post):

I was very disappointed by the decision of the Cincinnati-based Kroger Company to shut down on April 24 two of their 15 QFC stores in Seattle, including the beloved QFC in Wedgwood.

As soon as I learned of this (February 16), I called Corporate Affairs for Kroger/QFC to ask if they would reconsider. They confirmed that both stores had been already underperforming financially. While Kroger’s November 2020 financial statements show the company sitting on over $2 billion in cash and larger chain stores typically have the “economies of scale” to handle temporary financial fluctuations, Kroger seeks to have each store stand on its own profits, which is difficult because grocers typically operate with thin margins. Despite the “cause and effect” framing by some local media outlets, the City Council’s recent decision to require temporary hazard pay to frontline grocery workers during the rest of the COVID pandemic was not the cause of the closures, but rather solidified and potentially sped up the inevitable.

Kroger/QFC appreciated my reaching out and they are well aware of my ongoing efforts to provide a positive business environment for long-term employers in our city, including my votes against new payroll tax proposals during this recession and my recent economic strategy for an inclusive recovery. We discussed the extraordinary stress and uncertainty caused by the COVID pandemic, which makes our legislative votes as well as decisions by business owners more difficult and complex.

I offered to do whatever I could to help to retain the store and/or to have it reconstituted in some form.  I also connected with the store manager to offer any assistance that we can provide and to the union leaders representing the workers at both stores to ensure any transition to new workplaces within the Kroger family of companies happens as smoothly as possible. (I had already connected with the business community – as well as with labor leaders — prior to my vote on this temporary measure).

I realize this detailed and nuanced explanation from an elected official makes no difference if a beloved store closes in our neighborhood (I often shop at that QFC, too!) and so let me say, I will do whatever I can as the District City Councilmember to help secure a good grocery store there. (The store is located in District 4 at the border of District 5.)

The QFC will remain open at least through April 24 and, while not a permanent substitute for those shopping in person, nearby grocery stores include Safeway on 35th Avenue NE at NE 75th Street (and next to University Village), the larger University Village QFC store, the PCC Market on 40th Avenue NE and NE 65th Street, and the Metropolitan Market at 5250 40th Avenue NE. The Traders Joe’s in the University District (5555 Roosevelt Way NE) is probably too far away for most Wedgwood residents, though fans of that store will often go the extra mile.

While this particular bill felt overly rushed, the pandemic has thrust us into a fluid and extraordinary emergency situation and I was able to get answers to the following key questions as I considered how to vote on the proposal:

  • Is it a temporary measure? YES. (The bill calls for a review within 4 months. We need to make sure the bill sponsors keep their word to conduct that review and we need to speed vaccines to all front-line workers, including grocery workers.)
  • Is it providing relief to frontline workers during COVID? YES
  • Do my constituents generally support temporary measures providing relief to frontline workers during COVID? YES.
  • Does it exempt struggling small businesses? YES.
  • Would it impact primarily those businesses headquartered outside of Seattle? YES, though PCC and other locals are impacted.
  • Have I consulted stakeholders (in this case, the business community and the labor union)? YES, though I wish I had more time to have deeper conversations.
  • Did it pass review by our City Council’s Central Staff Analysts? YES.
  • Did Mayor Durkan signal early support for the bill? YES.
  • Does the final bill contain a provision that requires review of the impact after a few months? YES.

For additional context, here are the remarks made last month when this temporary COVID relief measure passed:

Councilmember Pedersen remarks, January 25, 2021 when the bill passed unanimously after the Mayor confirmed she supported it and would sign it: “After rapidly reviewing and researching this proposed ordinance to have larger grocery stores boost the pay of their frontline workers during the pandemic, I have decided to support it.  I consulted with both labor and employers.  I personally want to acknowledge that I think this legislation moved very fast. To hear the legislation at a Friday Committee and then adopt it on Monday can make it difficult for everyone to review it thoroughly. At the same time, I recognize we are in the midst of an public health and economic emergency and, therefore, would not want to further delay the temporary pay boost these workers should be receiving for the hazards they are facing until both shots of the vaccine are administered to everyone.  I will be voting Yes today. Thank you.”

Mayor Jenny Durkan remarks, January 29, 2021: “A disproportionate number of people of color are essential workers, and Seattle must continue to lead the way to provide relief and respect to those that have served our community throughout this pandemic. Grocery store workers have continued to work every day of this challenging time and I am glad we are finally able to recognize and compensate the effort that has kept stores open and communities fed over the past year.”

MORE INFO:

  • For the February 16, 2021 Seattle Times article about Kroger’s announcement to close by April 24 the two QFC stores (Capitol Hill and Wedgwood), CLICK HERE.
  • For statements from the bill’s sponsors in reaction to Kroger’s announcement on February 16, 2021, CLICK HERE and HERE.
  • For Mayor Durkan’s January 29, 2021 press release celebrating the passage of Council’s bill which would go into effect February 3, 2021, CLICK HERE.
  • For a link to Council Bill 119990, the “Grocery Employee Hazard Pay Ordinance,” which the Council adopted January 25, 2021 CLICK HERE.
  • For some historical perspective, check out this 2012 piece called “Groceries and Growth in Wedgwood” by the blog called Wedgwood in Seattle History: CLICK HERE.

Posted: July 28th, 2022 under Councilmember Pedersen

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