1,000
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1778

Gerber Building Q&A

April 15, 2020
Q: How did the Board come to the decision that led to telling the CTA that Chicago Market wanted to pull out of the Gerber site? 
A: We felt that the project at Gerber was viable and we were working diligently toward that goal. It was only in the last 6 months or so that we began to see things that concerned us and our consultants and we have been working to try to address those risk factors.

We believed that with careful store design planning the operational concerns could be overcome. It was only this January that the Board heard from additional grocery experts that convinced us the operational inefficiencies are too expensive for us to overcome. 

The site presents numerous challenges:
- it is a thin wedge that is not ideal for grocery layout
- it has a staircase pinching the center, hampering product and shopper flow
- it has a difficult loading situation
- even though two entryways make sense to access the 'L' shoppers as well as the parking lot shoppers, staffing two checkouts and managing security at both greatly increases labor costs 

It was a mistake to see the signed lease as implied proof that all was well and the project was moving forward there. The lease opened the door for the possibility and was a positive step forward, but together we needed to raise the funds, ensure we could cost-effectively operate a store in the space, and come together as an engaged organization. And we have not yet done that. Our project will not move forward unless and until we can prove and ensure our feasibility in the following areas - financial, operational, and organizational.

We also acknowledge communication mistakes we've made as a board and are learning from them. We will do better sharing information with you going forward. 

Q: Were there other factors at play?
A: 
Yes, in addition to the operational concerns described above, the Board looked at our funding situation. We worked hard on two Owner loan campaigns but came up very short of our goal. ($600,000 vs $1.8M) In the meantime, our funding gap has grown some as we collected more accurate construction and equipment costs. The Board does not feel we have the ability to raise the needed funds to open at the Gerber location in the required timeline. The bank loan and TIF funding portions of our funding plan remained in place and appear viable, though delayed, but they could not be realized without the Owner portion being fully funded. Resetting now will let us take a realistic look at what amount we feel we can raise and also at how we raise it, so that we can open a store successfully.

And lastly, the Board feels we are currently in a weak position in terms of organizational capacity and Owner engagement. Our fifteen-person Board has shrunk in recent months to only 6. In most cases directors stepped down because their busy personal and work lives made it impossible to commit time to the Co-op. Some of them also expressed concern about the project being feasible at Gerber. At its current diminished staffing level, the Board cannot get all the work done that needs to happen. We need to reconnect with you, our Owners, to include you more and reinvigorate our Board and volunteer teams for the work ahead. Special thanks to the remaining Board members and active volunteers for their continuing commitment.

Q: Is the Gerber building completely ruled out?
A: 
No. We are currently in negotiations with the CTA and they are working hard with us to help address timeline and operational concerns. We'll take what we learn from them back to our consultants for a further assessment to see whether our previous operational concerns can be addressed. Nonetheless, we still have funding and organizational capacity concerns as well. We, the Co-op community, need to support this financially and with volunteer effort too in order to make this location work.

Q: When will we know?
A: Unfortunately the Covid-19 crisis has slowed all the wheels, both for the CTA and for us. We're in frequent contact with them and will keep you more regularly updated on our progress, but it is delayed by the current pandemic. The first step we'll take once we have their responses to our requests will be to spend time with a consultant group in an assessment of operational feasibility. This will take them two months, but there is a question of how soon they can begin given the health crisis. 

Q: What happens with our money?
A: The need for Owner equity when a co-op is starting up is in large part to cover the startup costs. A grocery store does not open without a lot of pre-opening costs such as architect and store designer fees; market study costs; insurance; real estate broker fees; site security deposit; and website and marketing materials which add up over time. Pursuing the site meant we had to commit to these costs in order to move the project forward, but now means our reserves are spent. The Board is having to carefully use someOwner loan funds but is restricting that as much as possible. 

Q: If the project at the Gerber Building proves to not be feasible, what would be next?
A: The Co-op is still working toward its Vision. We Owners feel strongly that there is a viable business need to fill - a community-based grocery store that provides better daily access to local foods and connects us to our farmers and food producers. And a store that does so with sustainability front and center in bulk offerings, reduced packaging, fill-your-own, composting and more. 

IF the feasibility assessment we do in the next few months testing operational, funding and organizational capacity shows the location is not viable for us, the Board would like to work closely with Owners to develop a "Plan B". 

Remember that the magic of a co-op is that we own it together and that it is meant to serve our collective needs. Whether we stay at Gerber or need to reassess and look elsewhere, we will work together toward the right solution for us. 

Q: What can we as Owners do?
A: Volunteer. Share your ideas. Support the business you own together. Come to meetings with us (they'll be online, of course!) and dig in. Be a new kind of volunteer with your Co-op, one who takes the lead and makes things happen. We fell short on funding - how can we solve that? We need more Owners - how can we talk it up and encourage people to join us? We need Owners to be engaged - how can we make that happen?

Our Board has openings and needs new energy and skills. Many of our terrific Board members have had to step down because, well, they're terrific and their job and their family had increasing demands on their time. Being on a co-op startup Board means you're on a "working Board", but as one of our Board members said recently, it's really more like just being part of a startup business. So we need to spread the word and find some new energy and creative thinking from people with skills and the time to commit.

What skills? Project and financial management, business planning and development, fundraising, marketing, and volunteer management and engagement are all skills the Co-op's Board needs. If this is you (or you know someone great to recommend), email us. 

Your Co-op needs operational capital. Consider whether you can Level Up to strengthen your Co-op. Or loan or make a donation. (Email us to make a pledge for your loan.) Or lead a fundraising team. Or recruit a new Owner. These things matter to the business you own.

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