New London — A letter of intent has been signed between the developer of Parcel J, at the corner of Bank and Howard streets, and the Fiddleheads Natural Food Co-op that would double the size of the grocery and move it from its current location on Broad Street.

Richard Virgin, general manager at Fiddleheads, and Kyle Klewin, a partner in Klewin Development of Groton, recently announced the proposed partnership.

Fiddleheads would take 16,500 square feet of ground retail space. An additional 1,500 square feet would be available to a yet undisclosed retailer.

Klewin said he had other offers from other grocers but believed that Fiddleheads would be a better fit because it buys local, supports the community and believes in providing healthy products.

“We are extremely pleased that Fiddleheads has decided to occupy our retail space at the Parcel J development,” said Klewin. “Their commitment will mean more services and food offerings for the community as well as many more jobs for New London. Fiddleheads is a Connecticut-based business that has a commitment to their community and the state of Connecticut by hiring locally, sourcing food locally, servicing the local community, and providing much needed jobs to southeastern Connecticut.”

Parcel J has been vacant for decades, ever since the New London Redevelopment Agency bought the land in 1972 as part of a citywide Urban Renewal Plan.

Virgin said Fiddleheads wasn’t actively looking for a new location, but expanding from around 8,000 square feet to more than 16,000 would provide the co-op with a “unique opportunity.” He said a special meeting was held in mid-June to announce the proposed agreement, which was well received by members. The co-op has about 2,000 household members.

Virgin said he and Klewin began discussions in April and came to an agreement in May, but both signed a confidentiality agreement that said they would make the announcement in June after Klewin applied for some state financing. He said a market study was recently done that showed the proposed location would support an operation like Fiddleheads.

Virgin said the co-op still plans to proceed with its expansion into the area that formerly housed the Labor Ready employment service, since the new grocery location will be a couple of years in the making. He said this expansion would allow them to bring in more offerings such as fresh fish, more prepared foods, deli-type items and fresh meats.

Earlier this year Klewin received approval from the Planning and Zoning Commission for a development at the corner of Bank and Howard streets consisting of a grocery store on the ground level and apartments on three floors above. The housing portion of the development would include 43 apartments.

Klewin is working to secure funding for the roughly $13.5 million project. He said he has applied for a $5 million grant in Competitive Housing Assistance for Multifamily Properties from the Department of Economic and Community Development in addition to Connecticut Housing Finance Authority financing.

Once he secures funding, Klewin said, he hopes to break ground within the next 12 months.

i.larraneta@theday.com