The Renaissance Community Coop will bring $1.3 million in private investment to Phillips Avenue, and has already raised more than half of that amount.
The Renaissance Community Coop (RCC) is really on a roll! Self-Help Credit Union has stepped up with a term sheet offering $700,000 toward the start up costs for launching a community-owned grocery store in the Renaissance Center on Phillips Avenue. Now, Self-Help didn’t do this out of some charitable impulse. Sure, they’re a credit union with a mission of community development, but they’re also successful bankers who have to properly evaluate and underwrite all the risks associated with any loan they make. Like any bank, they want their money back—with interest.
Self-Help looked at the RCC’s market study, pro forma, and proposal, and decided the coop was a solid investment. A solid investment, that is, given certain conditions, including ongoing City ownership of the shopping center in which the coop will operate. Self-Help added this condition because they think that’s the best situation to nurture the coop and lay the groundwork for an even larger investment in community ownership: the community buying the whole shopping center.
No doubt, the news about Self-Help’s willingness to lend to the coop had a strong impact on Greensboro City Council members. That news, plus the over 100 people who turned out in support of the coop, turned last week’s City Council meeting into a bit of a love-fest for the coop. Virtually every member of Council plus both developer groups declared their support for the RCC effort.
The Council meeting was long and ultimately no conclusion was reached. After more than four hours of listening to the various proposals and public commentary, followed by discussion among themselves, Council members decided to postpone the decision about the long-term ownership of the Renaissance Shopping Center until their June 4th meeting. Whichever way the Council decides (continued City ownership of the Center versus passing ownership to a private developer), it looks like the coop has a home. So I left the City Council meeting pretty happy, even though I was confused about one aspect of the conversation.
Here’s the thing that puzzles me: Again and again, I heard several Council members say in support of the idea of selling the Renaissance Center to a private development group: “In this economy, we can’t afford to turn our back on private investment!” I wanted to jump up out of my seat and yell, “Wait a minute! That’s exactly what you’ll be doing, if you sell the Center to a private developer. Because that’s endangering the $700,000 loan from Self Help, which is explicitly tied to the City retaining ownership of the shopping center or selling it to the community!”
Council members, for the most part, seemed oblivious to the idea that the coop was itself bringing a significant amount of money to the table. Instead, many seemed to be treating the coop as a very worthy, popular, “charitable” enterprise. This was puzzling to me: In the RCC’s presentations to Council and in all the information we had circulated to Council members in face-to-face meetings, we had carefully spelled out our plans for raising the $2 million we needed to open the grocery store. Yes, we are asking for a $100,000 grant and a $600,000 loan from the City. Lots of businesses have asked for and received economic development support of this kind from the City. More importantly, the RCC is also bringing $1.3 million of our own money to the table. That $1.3 million is what any banker would call “private investment.”
Maybe there’s some confusion about this word “private.” When City Council members were throwing the word around in regard to the proposal from the private development group that wants to gain ownership of the shopping center, I think they meant “dollars not coming from taxpayers.” That is the same meaning I am putting on the term when I say that the coop will bring $1.3 million in private investment to the project.
With the Self-Help offer included, the RCC already has $745,000 of our private investment in hand or pledged. That’s a whole lot more than any of the other proposing groups have demonstrated.
And we are well on our way in raising the $600,000 more that we need, from member equity, owner loans, local and regional foundations, and community development financial institutions who specialize in lending to coops. If you want to see the details on our financing plan, check out the “Capital Requirements” worksheet that’s included in the RCC’s pro forma, which is available on the RCC website.
It’ll be a whole lot easier to raise this money when decisions are finalized, assuring the coop has a certain home in the Renaissance Center with the financial backing of the City. Here’s hoping everyone on City Council comes to understand the sizable investment the coop is making in our community, and makes the best decision for the community and the coop!