By Matt Stanley/General Manager
Published in the Co-op’s Spring 2016 Newsletter
You’ve heard us talk a lot over the last year and a half about our Co-op’s growth plans. Please be assured that despite a lack of big announcements about the where and when of our new store, lots of work is happening to prepare us for our expansion. Our focus on preparedness will ensure that when we do open the doors to an expanded location we will be successful. In the meantime, our store is growing rapidly in the current location and space is becoming a real challenge, both for shoppers and employees!
A critical step was checked off our to-do list when the owners attending our March Special Meeting at 14 Street Cafe unanimously voted to adopt preferred shares into our Articles of incorporation. We now have a powerful financial tool and new owner benefit at our disposal to raise the necessary equity to build our new store!
So now begins the hard work of preparing an effective capital campaign. By effective, I mean lots of member participation. For the purposes of this article, I want to plant the seed of an idea. What does it mean to invest in a local food co-op? Is it something we might consider as an alternative to traditional investments? What are the compelling reasons to purchase preferred shares?
In a capital campaign, the Co-op will reach out to the owners who use and benefit from the goods and services of the business to invest together to help it grow and thrive. A clear distinction to be made here is that the Co-op is not asking for handouts. Rather than making a donation, we’ll be asking you to invest in dividend-earning preferred shares.
I think the most compelling reason to invest in your Co-op is that it offers an opportunity to make a modest rate of return (3-4%) on something you’ll watch grow right here in your own community. You’ll see new jobs get created, more local products filling up the grocery shelves, and more fellow community members seeking out the Co-op as a way to live healthier lives. Even the strictest socially responsible index funds won’t let us watch our money turn into positive projects in our own community. Furthermore, parts of these portfolios won’t align with our values nearly as much as our food Co-op.
For the Co-op, the money we raise from preferred shares will create the necessary equity to leverage any third-party loans necessary to complete the project. The more capital we raise through preferred shares the less we need to borrow from a bank. The minimum investment in our preferred shares offering as per our recently approved designation rights is $2,500. For most of us, this is not an insignificant amount. We’ll be seeking an average investment of considerably more than that in order to reach our goal.
There are other ways to help us reach our goal of opening a new store if this minimum investment is beyond your household’s means. You can pay off your common share and even invest an extra $100 (for a total of $300), or you can encourage a friend to join the Co-op. Shopping at the Co-op as much as possible is a powerful way to demonstrate your support, too!
Finally, our capital campaign will require a dedicated team of board members, staff, and other volunteers. If you have experience with fundraising and want to lend a hand, please let me know (matt@astoria.coop).
For a detailed look at the approved designation rights, please check our web page. In the meantime, please trust that we are working hard to open an expanded location that will better serve our growing body of owners and staff.