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Clara City, Minn. – The loss of a grocery store can start the gradual decline of a small town.

With the grocery store gone — along with the regular customers it draws — other businesses are at risk of suffering as well.

“The grocery store is the key to keeping other businesses like the bank and the hardware store,” said Gene Wenstrom, a former state legislator who works with rural Minnesota cities as a development consultant. “The more retail you have, the better, because it kind of keeps everybody in town.”

With that in mind, this Chippewa County town of 1,300 residents some 110 miles west of the Twin Cities took aggressive steps to ensure that it wouldn’t be left without a local market.

“They had a grocery store, but it wasn’t able to offer some of the things — like fresh produce — that the regional centers like Willmar and Marshall can offer,” said Laura Ostlie, a planner for the Upper Minnesota Valley Regional Development Commission.

“It was old and sort of dingy, and the owners were getting close to retirement.”

City officials and residents collaborated on a project that not only brought a new grocery store but called for razing several dilapidated buildings in the downtown area, clearing the way for other businesses to land there.

Key to the work was a group of local investors that put up more than half of the project’s $1.5 million tab. The investors have chosen not to be identified, but Wenstrom and others said the market wouldn’t exist without them.

Other financial incentives included a tax-increment financing grant from the city, which allows businesses credit for taxes that normally would be paid, and a $200,000 low-interest loan from the Upper Minnesota Valley commission.

To run the market, the group turned to Brett Almich, the third generation of a Granite Falls family that’s been operating grocery stores in the area for more than 70 years. Almich’s grandfather Bud started the business in the late 1940s, and Almich took over from his father, Bill, and his uncle Jim almost 20 years ago.

After Clara City approached him, Almich bought out the owner of the existing grocery, then leased the new, 10,000-square-foot market on “very reasonable” terms. He said there’s no way he could have built his own building and made the finances work, and taking over the existing grocery with its run-down building made no sense, either.

“You’re not going to get any owner coming there to build a building and start a business in a town of 1,200 people,” he said. “I wouldn’t see a return on my investment for 20 to 25 years.”

After leasing the building, Almich invested about $500,000 in equipment and fixtures, he said.

Almich’s Market opened in late 2016 and has been steadily gaining customers. But it’s taking some time to wean residents off their grocery runs to Willmar and Montevideo, both about 20 miles away.

“Each year, sales have been growing. Is it exactly where I thought it would be? No,” Almich said. “But we’re still early into it. I really enjoy the community and there are a lot of wonderful people there.”

Sarah Simons, who lives in Clara City and teaches in Montevideo, appreciates having the market in town. A Coborn’s store in Montevideo closed not long ago, she said, reducing the area’s grocery options.

“It’s beautiful,” she said, shopping with her 4-year-old daughter Quinn. “I’m so glad they built it.”

The next target for Clara City is a pharmacy, which could be located in the grocery store.

“He’s operating a very good store,” Wenstrom said. “People are very happy in town and very grateful for this.”

John Reinan • 612-673-7402