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Sharing ideas and giving input for proposed Co-op relocation project

By Paul Cultrera
Phone: 916 736-6800 ext. 101 • Fax: 916 736-6410 • E-mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

S
ince the announcement that we had found a site two blocks away on a parcel bordered by 28th and 29th Street on the west and east, and by R and S Streets on the north and south that could serve as the Co-op’s new home, we have been busy working out the details associated with such a move. Here’s a quick summary of what has been happening:
  • A complete financial pro forma that details the project’s costs along with projections of operating revenues, expenses and cash flows for the next six years has been prepared.
  • We have had conversations with three financial institutions that are interested in taking part in the project and to whom the pro forma will be sent.
  • We have contracted with the National Cooperative Grocers Association’s (NCGA) Development Corporation (DC) to provide assistance with the project. Based on its experience with many similar co-op relocations, the DC will also create a project pro forma that we will compare to ours to test the validity of our assumptions. The DC will also supply store layout and equipment sourcing services and will then be on hand to help open the new store.
  • John Lassner, our real estate attorney, has drafted a proposed lease which is now being worked out with the developer’s attorney.
  • We have solicited input from our staff and managers regarding the design elements that they believe the new store will need to incorporate.
  • We have begun working with the local architectural firm of Mogavero & Notestine (M&N) who will serve as the architect of record for the project’s tenant improvements. We will be relying on their extensive experience in sustainable design as we develop the “green” features of the new store.
  • On March 6 we held our quarterly owner meeting that was attended by over 80 Co-op owners who had the opportunity to share their ideas, enthusiasm and concerns about the project.
  • Along with the project’s developer, we have also met with the boards of directors of the two neighborhood associations (Newton- Booth and Midtown) that the new site is located in or near to give them details of the project and to hear their concerns.

The Co-op's Bylaws require that “any loans that in aggregate exceed the net worth of the Cooperative” be authorized by the Coop’s owners. Accordingly the Co-op’s Board will call for a vote via a mailed ballot to approve the project’s financing. We had anticipated that such a vote would have taken place in mid-March, but the need to work on all of the above has pushed that timeline back. Once we have received loan proposals from the banks, we will call for a series of owner meetings where the project’s costs and benefits can be discussed prior to the vote. We will publicize these meetings in-store, on our Website, on our Facebook page and via our email list (if you are not already subscribed to that list you can do so by going here ).

W
e have been hearing lots of ideas about the new store from owners and will take them all into consideration as plans develop. You can send any specific ideas that you would like us to hear about to me at This e-mail address is being protected from spambots. You need JavaScript enabled to view it . While being able to incorporate every idea that we hear from our thousands of owners is probably not possible, now is the time to make them heard. If the project’s financing is approved by owners, we will have to move quickly to draw up final design and construction plans. The experience that both the NCGA’s DC and M&N have will be of great value to us in that process.

As exciting as the proposed relocation is, it also generates some justified anxiety. At the March owner meeting, I was asked how I could be sure that the relocated store would generate enough sales to justify its costs. The honest answer is, of course, I cannot guarantee what the sales at a larger store two blocks away with twice the car and four times the bike parking will be, any more than I can predict the weather or the winner of the next presidential election. But I can say that there are many examples of co-ops that have made similar moves that we have studied and learned from. Not the least of which is from our own history. When we moved to Alhambra Blvd. from the Freeport Blvd. site in 1989, annual sales at the time were about $2 million. In the first year at our current site they grew by more than 100%. Within ten years they were over $13 million and now they are at $27 million. Expectations for the new store are that sales would grow by 20% in the first year and by about 45% over the course of the first four years in operation. In the last four years, without adding any sales area or parking spaces, our sales have already grown by 30%. While history does not always repeat itself, these examples do provide some comfort when I wake up at 3 a.m. from some dream in which I am standing in a new store and I’m the only person there. And I hope they may provide some context for all of us as we contemplate this venture together.

Note: To see the Co-op’s response to the allegations being made about the project by Carpenters Union Local #46 click here.

 

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