'Steve, you got it!'
How a neighborhood’s devotion and influence saved the Jenifer Street Market.
Kim Dilley and Steve McKenzie have been business partners at the Jenifer Street Market for 41 years. Now they own the 7,600-square-foot store thanks to more than $70,000 raised by the local neighborhood to help put their bid over the top in a closed-door land auction.
Photography by Shawn Harper
From the pages of In Business magazine.
Business transactions happen every day, but the recent trials and tribulations of the Jenifer Street Market were no ordinary sale.
After 41 years, Steve McKenzie and his business partner, Kim Dilley, finally own the corner outright. On Dec. 16, as Dilley stayed back to run the business, McKenzie presented the highest bid to Circuit Court Judge Frank Remington. It was their second attempt to secure the building from their landlord, Schoep’s Ice Cream, which filed for receivership in mid-October.
In the early 1970s, McKenzie and Dilley were employees at an A&P grocery store on East Washington Avenue [now Hy-Vee]. When the national grocery chain closed the Madison store, the colleagues decided that going into business together would be better than visiting the unemployment office on a weekly basis.
They purchased the business, at 2038 Jenifer St., on July 2, 1979. It had been operating as a supermarket/convenience store, a concept that clearly wasn’t working because McKenzie and Dilley were the fifth owners in five years.
“We had no idea what to expect,” McKenzie admits. “I was 23 years old and we were excited about the idea and being in charge of our own destiny.” Never did they anticipate that 41 years later, they’d still be running the store.
Back then, the neighborhood, McKenzie says, left something to be desired. Just a block and a half away, Atwood was lined with bars and fights were common. The Barrymore Theatre was considered a blue theater for a while, and the Feds noticed, too, McKenzie says, because the neighborhood received tax credits for renovation and development. “There was some concern that it was slipping.”
The near-east side neighborhood, now known as SASY [Schenk-Atwood-Starkweather-Yahara], has made quite a resurgence ever since.
The early strategy
McKenzie still has a piece of oak that once extended back to the produce area when he and Dilley first bought the business. Employees had been carving the names of the building’s multiple business names into the wood.
One employee even predicted its next name, carving Jenifer Street Bowling Alley into the wood because the store aisles were empty. “I remember pointing to that sign and saying, ‘No, no, no! Jenifer Street Market!,” he reiterates.
One of the first things the co-owners did was limit the sales of single beers and malt liquors to help curb drinking in the parking lot and reduce the number of bottles strewn on neighbors’ lawns.
Even more important, they made a pact to offer what their clientele asked for and tried to locate it if they didn’t have it. “That strategy took off in a big way,” McKenzie says. “We have survived not only because of the neighborhood but because we adapted to what the customers wanted.”
At about 7,600 square feet, the store is small by today’s standards, yet it’s chock-full of variety — from live lobsters to bakery goods to craft beers. Several times a week, McKenzie makes a produce run to Milwaukee or elsewhere, where he selects specific items he cannot find here.
His theory? “Once you try it, you’ll be back for more,” he smiles, a gleam in his eye. That strategy has also worked.
Rocky path to ownership
McKenzie, with employees at the Jenifer Street Market, is all smiles after securing the store’s future for years to come. Schoep’s Ice Cream, the store’s former landlord, filed for receivership in October.
The events of Dec. 16, 2019 were actually years in the making. When McKenzie and Dilley first purchased the store, they assumed a lease from another company that later sold the land to Schoep’s Ice Cream.
While they never owned the building or the parking lot, they ran the store as if they did, and for the most part their relationship with Paul Thomsen, Schoep’s former president [1974 to 2008], was a cordial one.
“The first 30 years were fabulous,” McKenzie describes. “The last 10, not so much.”
To clarify, about 10 years ago, Thomsen invited McKenzie to tour Schoep’s new building on Manufacturers Drive. “He had extra room for additional compressors and room for more processing space,” McKenzie recalls. “I told him that day, ‘Hey, if you’re looking at moving from downtown, we’d be interested in buying [our parcel].”
Thomsen appeared interested, McKenzie says, prompting an offer soon after. “I could tell by the look on his face that he was pleasantly surprised. He said he’d take it to Schoep’s board of directors at their next meeting.
“[His reaction] seemed to me that he approved of our offer. He wouldn’t have offered to put it in front of the board had it not met his approval,” McKenzie reasons. “Paul was a no-nonsense guy, and we felt really good about the offer afterwards.”
But it wasn’t to be.
According to McKenzie, the Thomsen family decided to bring a non-family member in to replace Thomsen. Media reports say he was a long-time acquaintance of Thomsen’s. McKenzie found him knowledgeable about the ice-cream industry, but very corporate.
“All of a sudden, we heard our offer was being introduced to a new CEO of Schoep’s Ice Cream because Paul was retiring, and the new guy didn’t want to make a big decision that quickly.”
McKenzie says their rent increased 250 percent and Schoep’s terminated the store’s existing lease, forcing McKenzie and Dilley to renegotiate directly in a meeting with the new Schoep’s leader. “It didn’t go well,” McKenzie states.
In fact, he and Dilley walked out.
The store was later put on a one-year lease, leaving them vulnerable, he said.
“In the commercial business, that’s unheard of, especially in a business that takes so much capital investment,” McKenzie argues. “We had very little contact after that.”
The relationship grew contentious.
“My impression was that Schoep’s was very in tune with ice cream manufacturing, but I don’t think their forte was income or investment property. In many ways, I got the sense that we were in the way.”
Defying the odds
Some might say Jenifer Street Market has existed in spite of marketing concepts such as the oft-referenced location, location, location. In fact, someone traveling up or down Atwood Avenue wouldn’t even know the store exists because the corner it occupies, at the intersection of Jenifer and Division streets, is not a major thoroughfare [although in an interesting piece of Madison history, it used to be, McKenzie says].
Through the years, its very existence perplexed executives from out of state searching for the secret sauce that defied all known marketing concepts yet kept the SASY neighborhood so entrenched.
When the ice cream company filed for receivership in October, rumors began swirling about the demise of the Jenifer Street Market, as well.
The 92-year-old Schoep’s employed about 150 workers and reportedly had a banner year in 2017 but recently lost its two largest customers. Saddled with about $19.1 million in debt, the company could not meet its future financial obligations.
The demise of Schoep’s is both sad and surprising, McKenzie acknowledges, and diverted his attention away from the store during the busiest time of year.
Michael Polsky, a court-appointed receiver, was selected to facilitate the sale of Schoep’s assets, including the market’s building and adjacent parking lot, in an effort to pay back more than 60 creditors. Polsky set an auction date for Monday, Dec. 16, at the Concourse Hotel, and McKenzie vowed to submit a bid.
The neighborhood responded immediately to news and social media reports, posting flyers and even forming a SASY Business Development Association almost overnight, as cries for cash began to ring out to help save the market. The reaction, McKenzie says, “made his head spin.”
By the time the court date rolled around, he was emboldened with about $70,000 raised by neighbors and customers hoping to help put his bid over the top.
McKenzie was one of eight bidders at the Schoep’s land auction that day, bidding on 12 “exhibits,” as the ice cream company’s assets were sold off. Bidders hoped to acquire real estate, accounts receivable, ingredient inventory, finished product inventory, royalty rights, or manufacturing equipment, he explains. The Jenifer Street Market and parking lot parcel was one of four real estate exhibits up for sale. After eight hours and numerous bids, McKenzie and his attorney knew they were about a quarter of a million behind in their pursuit.
Things weren’t looking good.
Then something very unexpected happened: A large bidder dropped out. “We were back in!” McKenzie states. “But an hour later, we were told the bank wouldn’t accept any bids because they weren’t high enough. We thought we were out again.”
Finally, at 8:30 p.m., after more than 10 hours and several rounds, McKenzie and his lawyer were called in one last time, fully expecting to be told to go home.
“The judge turns to me and asks for our highest bid and I told him. He turns to the bank representative and asks if they’d accept it, and they said yes, then he looks back at me and says, ‘Congratulations, you got the high bid!’
“I was stunned. I couldn’t process it. Then my attorney turned to me again and said, ‘Steve, you got it!’”
A promising future
The Jenifer Street Market was the only sale accepted that day. The other bids were deemed too low and not accepted. By Feb. 5, Polsky must present a plan to the court that may determine Schoep’s future. Will it be sold to one entity and continue, or become a sad tale of what once was?
McKenzie’s bid of $925,000 was more than twice the market’s assessed value, and its property taxes will double as a result.
But more importantly to the co-owners, in an almost David vs. Goliath moment, the Jenifer Street Market will live on, much to the delight of a near-east side neighborhood that simply wouldn’t allow it to leave — under almost any circumstances.
In fact, leaving is far from their minds now. Dilley practically raised her children in the store, and even brought a crib into the small office for a while.
McKenzie, who left on a pre-planned Caribbean vacation just days after closing, looks forward to enjoying life without uncertainty for the first time in over 10 years.
When the dust settles, the co-owners hope to pursue an ESOP (employee stock- ownership plan) allowing them to ease into retirement.
Says McKenzie: “I never believed we’d get this bid. Everything was against us. I always knew this was a strong neighborhood, but this has been the greatest compliment ever paid to us.
“It’s just overwhelming.”
Click here to sign up for the free IB ezine — your twice-weekly resource for local business news, analysis, voices, and the names you need to know. If you are not already a subscriber to In Business magazine, be sure to sign up for our monthly print edition here.