Downtown Los Angeles has often been called a food desert for its lack of grocery options. But while major chains such as Trader Joe’s and Whole Foods Market have so far ignored residents’ pleas to bring stores to the area, a couple of entrepreneurs are trying to start an oasis.

Carolyn Paxton, the owner of a dog accessory business, and Keri Aivazis, a one-time business consultant, plan to open a small, upscale natural food market called Urban Radish in the Arts District in March. Construction to convert a former 8,000-square-foot warehouse on Mateo Street began this month.

But for the two, who have no prior experience in the grocery business, the odds are long. After all, they are opening a store away from the area’s populous core and plan to sell only a limited selection.

Paxton admitted that the products will be more expensive than those at other stores, but she hopes customers will recognize the quality of the organic, locally grown produce and high-end specialty items.

“We’ve been going to farms and doing our due diligence to find the best tasting food there is,” Paxton said. “We refuse to compromise to get produce from Mexico – that ripens in a dark room in a box – just because people want cheap. The quality and taste have to be there.”

There are currently a handful of grocery options downtown, including Ralphs, Target and, soon, a Wal-Mart Neighborhood Market in Chinatown. But other popular chains such as Trader Joe’s and Whole Foods have bypassed downtown completely, and many residents say the area is underserved.

Urban Radish, which will be the only grocery store in the Arts District, hopes to appeal to the higher-income residents of that neighborhood, a 60-block area east of the historic core of downtown.

But Hal Bastian, senior vice president and director of economic development for the Downtown Center Business Improvement District, said the market’s somewhat remote location could limit its appeal.

“It’ll take some effort for people to get there,” he said. “They’ve got to do some strong outreach in the community.”

Urban markets

The idea for the market came about 18 months ago after Aivazis lived for a short time in New York, where she saw successful small markets in upscale urban areas. She started discussing the concept with Paxton, her former neighbor, who had moved to the Arts District and had noticed a distinct lack of grocery options.

On most weekdays during lunch, for example, Ralphs employees roll out temporary cash registers to keep up with the rush of customers. Many people who live downtown say they visit grocery stores in neighboring communities such as South Pasadena and Silver Lake.

“We have plenty of restaurants coming in, but we don’t have a market,” Paxton said. “People don’t have the money to go every day and sit at Urth Café or sit at Church & State. We need a grocery store where you can get some toilet paper and lunch meats and fruits and vegetables. It’s all people talk about here.”

They looked at two buildings in the Arts District before signing a lease last year with downtown real estate company Linear City Development LLC for the warehouse and parking lot at 660 Mateo St. The women hired downtown commercial real estate and development firm Creative Space to consult on the project and build out the space. With only 6,500 square feet of selling space, the store will be smaller than a typical Trader Joe’s.

Paxton, 52, and Aivazis, 45, are financing much of the market themselves, using money they made through previous careers and investments. Paxton formerly worked in biotech sales and marketing, and opened a dog accessories business called Chi Wow Wow, which she still does on the side. Aivazis worked as a consultant.

When banks refused to loan them money because they had both quit their jobs to open Urban Radish, they began applying for more specialized loans. Earlier this month, the duo received notice that they had been approved for a loan through California Fresh Works, a private-public loan fund that helps grocery businesses bring healthy food to underserved communities.

“As two businesswomen who have not previously been in the grocery business, we were a long shot in getting this funding,” Paxton said. “But we did it. It was a huge pat on our backs.”

Once construction is completed, Urban Radish will offer a variety of traditional grocery services on a small scale. Paxton said the store will have a deli and a bakery to sell various prepared foods, a produce section with “highly perishable” vine-ripened fruits and vegetables, and a wine and beer section that will also offer olive oil tastings. Eventually, the duo hopes to hire an in-house butcher, too.

Paxton said that the market is generally more expensive than a traditional grocery store. But if there is an area that can afford the high prices, it is the Arts District: A recent survey by the Arts District Business Improvement District found that residents had an average annual household income of more than $126,000.

Still, the duo has made special efforts to accommodate the low-income artists who first laid claim to the neighborhood.

“We don’t want to exclude anybody,” Paxton said. “So one of the things we felt would be ideal is a beautiful bulk foods section. We’ll offer heirloom grains, quality beans, really great food that can be priced right because we’ll buy it in bulk.”

‘Sort of starved’

But some observers are skeptical that Urban Radish will satisfy residents clamoring for something bigger.

“Downtown is, in a sense, sort of starved,” said Rachel Rosenberg, executive vice president at retail real estate company RKF in Santa Monica. “A market like this, however interesting and notable, just can’t service the residential base the way we would typically associate with a Trader Joe’s or a Whole Foods.”

Bastian, of the Downtown Center BID, agreed that many people there hope for a Trader Joe’s, but he said the company does not seem interested.

Estela Lopez, executive director of the Arts District BID, said she would rather have a market that wants to be there than hope for one that isn’t interested.

“I think we can wait and wait and wait for Trader Joe’s or Whole Foods, or we can embrace the people who already understand the district and downtown and want to contribute to our livability,” she said. “That’s what they’re doing, and I’m very happy that they’re doing it.”