Great Barrington — After a bumpy start, the Berkshire Co-op’s campaign to raise $1.3 million for its expansion is sprinting toward the finish line at a healthy clip. More than $900,000 in member loans has been raised, with a self-imposed deadline of July 15 just weeks away.
The Co-op raised just $400,000 between November and April, during which time the campaign was halted twice to be reevaluated. Co-op Board President, Dan Seitz said that the fall election took the wind out of a lot of sails and the loan campaign had a hard time gaining footing between that and competing for people’s attention and dollars during the holiday season. The Coop had little luck during the winter months as well because a significant number of Coop members are out of town at that time.
But the campaign got an energetic re-start in May, and another half-million dollars has streamed in since then. “Once we re-started the campaign, it’s been going gangbusters,” said Daniel Esko, the Co-op’s general manager.
The money being raised – in the form of member loans – will be put towards the Co-op’s much-needed expansion. It will be the third expansion for the Coop, which began as a local buying club. In 1981, that buying club with 160 families opened the Co-op’s first physical store in the old granary building on Rossester Street. Before that, deliveries were often picked up in members’ garages. The granary store was renovated in 1993, but it was clear that the space would soon be too small. The Co-op moved into it’s current home in 2003 at a cost of $1.1 million, of which $420,000 was raised through member loans. The Co-op is once again looking to further professionalize with its expansion plans, and the loans are a critical part of funding those plans.
The loans, which are only available to Co-op members who live in Massachusetts and New York, pay between 3 percent and 5 percent interest depending on whether they are below or above $10,000. The loans are for five and seven year terms. By comparison, 10-year U.S. Treasury Notes pay about 2 percent but are guaranteed by the government. The Co-op, however, has never missed a financial obligation in its 35-year-plus history.
“It’s important to emphasize that the Co-op is not asking for donations,” Esko said. “These are loans and ones that have a very reasonable return. We’re essentially asking members to consider parking their money with us for a few years. When you invest in the Co-op, you are investing in the community. As an organization, we put our money where our mouth — creating a better community and a better world.” About 112 Co-op members (out of a possible 3,000) have so far stepped forward to loan the organization money, with loans ranging in size from $1,000 (the minimum) to $65,000.
The Co-op’s plans call for the construction of a new building, just across the parking lot, where Laramie Cleaners was once located. The Co-op will be an anchor tenant, occupying the ground floor of a new three-story office and high-end condo complex, which will be built and owned by Benchmark Development of Lenox. It will be named Powerhouse Square in recognition that the location once housed one of William Stanley’s generators that made history by electrifying downtown Great Barrington with alternating current in 1886. The Co-op’s current home, a former car dealership and fitness club, will be raised to make room for additional parking, to help make up for existing parking that will be absorbed by the new building’s footprint.
The project is expected to cost $3.6 million, with the rest of the capital obtained through more traditional loans — loans that cost the Co-op more money than member loans due to higher commercial rates as well as associated finance fees that can total in the tens of thousands of dollars. Owner loans do not have finance fees.
The Co-op, which moved into its current home in 2003, has badly outgrown the space. The store’s footprint will increase by 6,000-square-feet, for a total of 14,000-square-feet. The retail portion of the store will nearly double, from about 4,000-square-feet to nearly 8,000-square-feet. The increased space will allow for a full-service meat and fish counter (as well as meat prep), a full-service deli, a produce area that will nearly double in size, a smoothie and juice bar, greatly expanded hot bar and salad bar offerings, and an enlarged café area for eating and meeting friends.
Esko said the expansion is needed for a number of reasons, the most critical of which is to remain viable in a competitive retail environment given how many food-shopping options there are in Great Barrington alone. “It’s important to reinvest in an operation every decade to stay competitive,” Esko explained. “We’re four years past due. We should have expanded in 2013, but plans to move down Bridge Street fell through.” The Co-op was determined to remain downtown and was relieved to find a local developer who was aligned with its vision.
In addition to a much larger retail space that is designed to be light and airy, the expansion will also bring other much-needed improvements such as a more professional loading dock protected from inclement weather, new energy-efficient refrigeration equipment, and better designed and roomier kitchen and office space all in one central location. Currently, Co-op operations are divided between the retail store, a cramped kitchen on the second floor, an administrative office on Main Street, and off-site storage. Customers won’t see those improvements, but they should greatly increase the Co-op’s operations efficiency. Customers will likely notice, however, the addition of two more checkout lanes, more bathrooms, and a larger café.
The expansion will also have an impact that affects the Co-op’s underlying mission: to support the local economy. The increased space will not only bring costs down due to economies of scale, but it will also permit the Co-op to hire roughly 20 more employees (with an average hourly wage of about $15.50) for a total of about 80, and to purchase as many as $2 million in local products, up from the current $1 million. The Coop purchases from more than 200 local vendors (local is defined as within a 100-mile radius), and 32 family-owned local farms.
The operation averages about $8 million in sales, but expects that number to increase to $12 million within five years of the store opening. Additional revenue means that the Co-op will be able to expand its outreach programs to those in need as well as local schools, where a dedicated Co-op employee teaches children about nutrition and gives cooking classes.
Great Barrington resident MaryBeth Merritt, a family health advocate at CHP, and a former chair of the town’s agricultural committee, said that she loaned the Co-op money for the expansion because she strongly believes in its mission and values. “It’s not just about having a bigger Co-op; it’s about what a bigger Co-op can do for the community,” Merritt said. “It means more investment in the local economy, including farms, and more jobs for our community — and that means something. Money spent at the Co-op stays in the community, and creates jobs.” She said she also found the loan rates attractive. “If you have a thousand or two to put aside, you’ll get a much better rate than the 0.25 percent you’ll get with a bank CD.”
North Egremont resident Bill Tynan, who has worked at the Co-op for six years, said that he made three loans to the Co-op. “As our CDs matured, we decided to convert those investments into something more meaningful to us. Being an employee of the Co-op, I understand its values and how much more we can do for the community once we expand. Investing in the loan program felt right to us, and the return on our investment also made financial sense.”
“If ever there was a time to invest locally, that time is now,” Seitz said, referencing the nation’s tumultuous political situation. “Supporting the Co-op is a way to support what you believe in here at home — a vibrant downtown and a vibrant local community.”