While Chicagoans wait for Ohio-based Yellow Banana to open its Save A Lot locations a year after receiving City Council approval, the company has run into legal headwinds in its home state and recently sold its grocery stores in Florida.
A lawsuit filed Oct. 23 in federal district court of Ohio by produce distributor Sanson Produce said Yellow Banana failed to pay the company, racking up $356,720 for fresh fruits and vegetables sold from June to September and purchased on credit. It’s unclear which Yellow Banana stores it supplied. Ohio-based Sanson doesn’t distribute in Illinois, the company told the Sun-Times.
Sanson requested damages and equitable relief. The suit was dismissed Monday by Sanson. The company and its attorney declined to comment, or say if a settlement was reached. A spokesperson for Yellow Banana said the company doesn’t comment on litigation matters.
But the lawsuit with Sanson wasn’t the company’s only problem. In early October, one Ohio store had to limit its hours and store shelves sat empty for weeks, according to Ohio news outlet The Real Deal Press.
Meanwhile, the city of Chicago wasn’t aware of the lawsuit against Yellow Banana, said Peter Strazzabosco, deputy commissioner for the Department of Planning and Development.
He said news of the lawsuit doesn’t change its deal with Yellow Banana, as long as the grocery chain follows the redevelopment agreement approved by City Council.
“Compliance will continue according to the redevelopment agreement,” he said.
Yellow Banana has courted controversy in Chicago since it was awarded more than $25 million in tax increment financing and federal tax grants to rehab and revitalize Save A Lot stores on Chicago’s South and West sides.
On Oct. 23, the same day Sanson filed its lawsuit, city employees tried to contact Yellow Banana to receive updates about its opening plans following a resident’s inquiry into Yellow Banana, according to emails obtained by the Sun-Times through a public records request.
Emails show staff in the Bureau of Economic Development tried calling and leaving voicemails for Yellow Banana CEO Joe Canfield but only received an “automated response,” according to an email.
“Did you hear from these guys yet? Now [Ald. Greg] Mitchell asking me about the status of both locations in his ward too,” Tim Jeffries, managing deputy commissioner, emailed to Financial Planning Analyst Billy Grams.
Questioning the timeline
The series of emails reviewed by the Sun-Times show a pattern of Yellow Banana failing to communicate with the city and changing its timeline for store renovations.
In July, Kenya Merritt, the newly-appointed deputy mayor of business and neighborhood development, wanted specifics on Yellow Banana’s timeline for the now eight stores that were approved for funding, emails show.
Isaac Smoak, World Business Chicago director of community impact, emailed Merritt that Canfield only provided information for four stores after he requested a “clear timeline.” The timeline for those stores was later pushed back again.
“I think it would be good to get a more robust timeline from Yellow Banana, given the substantial funding they have received,” Smoak wrote.
Yellow Banana was approved for a total of $18.3 million in grant funding through the Chicago Recovery Fund. It was also approved to receive a total of nearly $7 million in federal funding for two stores.
Fewer stores
Yellow Banana operates stores in Ohio, Texas and Wisconsin. It owned locations in Florida until Oct. 1, when it finalized the sale of four stores to Ascend Grocery, a Yellow Banana spokesperson confirmed.
The company has 10 locations in Chicago, with five that are open including a controversial Englewood site that took over a former Whole Foods.
Two — Gresham and West Garfield Park — are closed for renovation. Its Woodlawn location has remained closed since May, after a break-in. Another two locations are expected to open — one in Riverdale and another store whose location has yet to be announced.
The Gresham store was initially slated to open at the end of 2022, but the opening date has been pushed back several times, with Canfield in August citing “permit delays,” according to Block Club.
But city records show construction permits for the Gresham location were approved in October 2022. And emails showed the city had already given the green light to start construction.
Ald. David Moore (17th) told the Sun-Times in November that there were no permit delays and the Gresham store was expected to open around Thanksgiving.
Thanksgiving came and went without an opening.
A Yellow Banana spokesperson said Wednesday that “construction and equipment installation delays” have stalled the openings for the Gresham and West Garfield Park stores.
The opening dates are now projected for the first quarter of 2024.
This story has been updated to clarify Yellow Banana’s grant funding.
