Honest Weight Food Co-op closer to moving ahead with new store
A rendering of the proposed new store, by Envision Architects.
The Honest Weight Food Co-op announced this week that it's passed the $1 million mark in loans from the public -- and it's now close to moving ahead with its new store.
The co-op already has a site lined up Albany's West End neighborhood -- and a new building has been in the works for years. But a financing snag in March 2010 prompted the co-op to reformulate its plan.
Now it looks like construction could start as early as this fall.
Duke Bouchard, the co-op's CFO, says the total projected cost of the new building is "around $11 million" -- that includes "a new store, equipment, inventory, soft costs, refinancing the land, and a 10% overrun." He says the org has $1.7 million in cash for the project, $1 million in loans from shareholders, and $1.7 million in commitments from subordinate lenders -- with another $100k-200k from subordinate lenders in the works.
That still leaves a $6.5 million chunk. Bouchard says the co-op is currently working with a primary lender to line up the money. He says they're hoping to have a deal completed this fall.
Honest Weight board president Lynne Lekakis says once that deal is in place, the co-op can get going on the building. She told us this week: "We would love it to happen in the next few months, which, depending upon the weather, might enable us to do something before the snow flies."
The co-op is still looking for loans from the public. Lekakis says it would like to raise another $300k that way. She says many people have loaned the co-op money at very favorable rates -- one or two percent -- which will help the org save money.
Honest Weight says it's received 236 loans from individuals, with amounts ranging from $1k-$97k. The average loan amount has been $4,200.
Honest Weight does advertise on AOA.
Find It
Honest Weight's proposed new store
100 Watervliet Ave
Albany, NY 12206
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Comments
I'm glad to see that Charlie Brown will be frequenting the co-op!
... said Jessica R on Aug 27, 2011 at 7:11 AM | link
Wow, that's a significant amount of money for a single store.
I am afraid they are on the track of becoming Pioneer Food Market (read: money mismanagement)
... said Lu on Aug 27, 2011 at 12:35 PM | link
Sometimes projects like this take on a life of their own. Let's hope cool heads prevail at the co-op and the go/no-go decision is a rational one based on the realities of their finances.
It can be difficult to put the breaks on something after so many people have worked so long to make it a reality. And with so many stakeholders who have committed money to the project, it would be even more challenging to change course.
If this were my store, I'm not sure this would be a move I would make. But I wish them all the luck in the world. The HWFC is a vibrant part of the local community, and nobody wants to see them drown under a crushing load of debt.
... said Daniel B. on Aug 27, 2011 at 11:39 PM | link
Glad to see I'm not the only one with reservations about the Coop going ahead with this project in this way. I'd love the luxuries of a new, larger, custom building too, but it would really suck to totally lose the HWFC and I'm afraid that's the path they're on. Not to mention the insane resource consumption involved, when learning to live with less is a value promoted by most who are strongly involved in the Coop.
... said neighbor on Sep 7, 2011 at 11:35 AM | link
I have been a regular customer at the Honest Weight Food Co-op for ten years now. Their prices are usually competitive, most people are friendly, and the bulk selection is the best in the area. I also appreciate the well-loved feel of the store and the concept behind it. It can be a bit crowded both inside and out (parking) although less so since the present location expanded. So when the original proposal for a new location was put forth I was excited.
However some of that excitement was lost when instead of re-using the pre-existing structure voters instead opted for a brand new building. At the time much of the money for the new building was coming from the state (taxpayers) so a 'free' new structure made some sense to many. Still even with the free money the financing for the rest could not be raised and the state money went away as the economy soured.
Now, instead of excitement I am left with annoyance and sadness. I see terms such as CFO (chief financial officer), board president, and figures including $11 million in costs and $6.5 million still needed in loans. This sounds more like a big-business/corporation than a community owned grocery store.
Given these figures, this means the primary lender will be owed more than half of the investment making them the biggest partner in the Co-op. Who will have the most influence over the Co-op's decisions? If things get tight will policy, prices, and people change to suit the biggest investor? Who would get paid back first if things don't work out? I also wonder why this is being pushed so hard with the major financing issues. Who stands to gain from the new building being built and what relationship exists, if any, between them and member/s of the Co-op?
This is not the time (if there ever was one) to build such an expensive and expansive store in a semi-industrial area (bad real-estate investment). Where will the extra customers/sales come from to pay the loans and additional overhead? There's a reason why Whole Foods has not put a store here; that the Pioneer Co-op is struggling; and the only health food store in Schenectady never re-opened. Further, every major grocery store in the area has a fairly well stocked health food department.
In sticking with the co-op concept which has made the present store such a pleasure as well as placing viability over big dreams, I propose the Co-op do the following: Use the $2.7 million in approved loans to bring the building at the new location up to code, move the inventory/equipment from the existing store and use any remaining loan money to do improvements. Keep the rainy day fund ($1.7 million) as a cushion to see how things go. If the new location succeeds and as the loans are paid back, improve what you have over time. This would all keep with the motto: reduce, reuse, recycle which would seem to be what the Co-op has been up until now.
If you are as concerned as I am and have any influence, please speak up. The Co-op is 'just about right' now. A little bigger could be 'just about perfect'. $11 million bigger would be 'just wrong'.
... said David on Sep 27, 2011 at 8:44 PM | link