Alfalfa’s debts deepen: grocer now owes nearly $300k to Boulder and Louisville over unpaid sales taxes

Company officials cite ‘legacy issues’

Yasko Tsunekawa stocks fresh produce while setting up for the grand opening of the Alfalfa’s on South Boulder Road in Louisville in 2014.

Alfalfa’s debts have deepened in recent months, with records showing the grocer now owing nearly $300,000 over unpaid sales taxes between Boulder and Louisville.

Tax liens, reaching back to November through last month, reveal the company — Alfalfa’s Market Inc. — owes $147,439.47 and $135,464.67 to Boulder and Louisville, respectively. Those figures take into account the penalties and interest on the original taxes owed.

The debts may raise awkward questions in the communities in which Alfalfa’s has become a staple; in Louisville, city leaders in 2013 lured the company in with several large figure incentives, which included offering the 27,800-square-foot store a full rebate of the sales tax revenues it generated in the first three years of operation — capped at $800,000.

The natural grocer also received a 50% rebate of the use taxes and permit fees paid to the city.

The store, located at 785 E. South Boulder Road, was billed as the anchor tenant for a roughly $31 million redevelopment of the city’s old Safeway site, which included a high-end apartment complex, structured parking and thousands of square feet of commercial space.

The company, which recently celebrated its 40th year of operation, has declined to comment on specific terms, such as how it came to owe such an amount or how it plans to repay it, though in a statement officials appear to characterize the gap as an issue its new ownership partly inherited when it purchased the company.

“Alfalfa’s is in the middle of a positive transformation,” Alfalfa’s spokeswoman Heather Collins said in a prepared statement, adding that “the new ownership group continues to heal all of its legacy issues.”

“At Alfalfa’s we continue to and look forward to supporting the communities we serve.”

In late 2017, Mark Retzloff and Barney Feinblum sold their majority shares in the company to Mark Homlish and William “Tripp” Wall. Financial terms of the private deal, including price and amount of shares sold, were not disclosed.

Though Frank Hagan, a shareholder in the original Alfalfa’s and the revamp, said at the time that Feinblum and Retzloff had brought too much debt into the company and sold their shares for “10 cents on the dollar.”

“They dug a deep hole,” he told the Camera in 2017.

Hagan said at the time that the original operation was “lean,” but a planned revamp was poised to add more stores, including a corporate staff of dozens. The Boulder store underperformed, and more funding was needed from investors to open the Louisville location, which also failed to deliver enough revenue to repay the debt.

Louisville’s Finance Director Kevin Watson on Thursday declined to comment on the debt or if the company had begun to pay any of it back, saying only that the city was in “conversation” with the grocer about its repayment. Joel Wagner, Boulder’s Tax and Special Projects Manager, echoed a similar sentiment, though declined to disclose specific circumstances.

Upon the revelation in February that Alfalfa’s had originally fallen behind in its payments to Louisville, Watson said the likeliest recourse, if any, would be to cite the company, rather than seizing the business as the code allows, a resolution Louisville has used sparsely in the last decade.

“It’s technically a violation of city code,” Watson said at the time, “and in the past that’s the direction we have gone.”

Similarly, Boulder’s “code views sales taxes a lien on tangible property” — typically referring to merchandise, furniture, fixtures, tools, equipment, inventory and all cash and bank accounts — Wagner said.

“Our code allows us to certify a lien with the county and additional steps include court summons… seizure of the business,” he said, adding that “when outstanding balances are paid, we release the liens.”

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