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A Director's
Chair: Building our Future
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by Lorrie Graham
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Building blocks have super
powers; they can be wondrous tools to reach a goal. I discovered the
powers of building blocks when I babysat an 18-month-old little boy who
did nothing but cry the first time I watched him. He stopped crying
when I stacked up the blocks and then he toppled them to the floor. We
had great fun and this became the ritual for his transition from being
with mom and dad to being with me.
My goal with that little boy was to distract him until his parents
returned, but building blocks can be more than toys, they can be tools.
The Honest Weight Food Co-op is using the amazing powers of building
blocks to create an opportunity for all of us, each and every
shareholder, to have a stake in the success of our new building. With
shareholder loans and building blocks, every last one of us will be
able to look at the new store and say, “I made this possible.”
Along with Building Blocks, there are Shareholder Loans, grants and
loans from local organizations, all of which are needed to make up the
difference between the bank mortgage and the actual costs involved. The
Shareholder Loan Program for our new Co-op is structured so that each
shareholder may loan a minimum of $1,000 to the Co-op (the average
loan, to date, is $4,000). Each shareholder may choose when their loan
matures, from 5 to 10 years after the new store opens. The annual
interest rate, also chosen by the shareholder, ranges from 1% to 4% for
loans less than $10,000 and 1% to 6% for loans of $10,000 and above.
Because every shareholder should be given the opportunity to invest in
the new store, and not everyone has the requisite $1,000, the idea for
Building Blocks emerged.
The final form the Building Blocks will take hasn’t been fully worked
out. They may be like a savings bond, where you purchase it for one
amount and then, at maturity, you cash it in for the face value, which
is the capital plus accrued interest. Another possibility is that
Building Blocks will be Honest Weight Food Co-op coupons purchased at a
discount, which can be used in the store for face value after a
specified date. Whatever form the lawyers and accountants approve,
Building Blocks are an important part of the fund-raising for the new
store; they make it possible for shareholder who cannot make a loan
$1,000 or more to contribute to building the Coop’s new home.
Whether you can loan the Co-op $50,000 at 1% interest for 10 years, or
your budget allows for a Building Block, it is important that all of us
do whatever we can to support our new store. If you haven’t joined the
Co-op, now is a great time to join, so you too can invest in the
Co-op’s future.
Some readers may be worried that the expenses of moving may be too much
for the Honest Weight Food Co-op. Well, over the years some good
decisions have been made and our Co-op is thriving and growing. Here is
a quick overview of the construction budget and budget projections for
the new store. The final total for constructing, equipping, and
stocking our new store hasn’t been finalized. When it is, there will be
a membership meeting to vote on the budget. At this time, the breakdown
is tentatively $6.5 million for the building, $2.75 million for
equipment, $350,000 for additional inventory, $900,000 for fees (such
as architects and construction manager), plus money to promote the
opening of the new store.
All of this comes to between $11 million and $12 million. Projected
sales, after the move, are conservatively based on industry standards
for increased sales space in similar stores. It is estimated that
Honest Weight Food Co-op will realize a 50% increase in sales in the
first year of the new store, which is lower than the industry average
for this size expansion. Projected growth for the subsequent years (15%
the second year, 10% the third year, 7% the fourth year, and 5% the
fifth year) is lower than the annual sales growth currently experienced
by the Co-op. A market study is being completed for the Co-op, which is
due by the end of February. This study will tell us what we can expect
in terms of sales based on the Capital District market area.
I hope that you are excited about the new store. I know the staff,
board of directors, and member workers are very excited. Watch in the
store for the architect’s model of the new building, and I hope that
you will join me in finding a way to help fund the new store.
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