The Early History of F4DC’s Role in Community-Based Efforts to Build a Cooperative Grocery Store at Bessemer Center

Bessemer Center, Northeast Greensboro (Photo by Eric Ginsburg, Yes Weekly)

Earlier this week, I drafted this history to clear up some confusions about how and when work on the Renaissance Community Coop started, and the role that F4DC has played. We decided to post this history on our website so that more people have access to it during this period when City Council is deciding whether and how it will support the coop. We also thought that in the long term (5-10 years from now), people might be interested to see in some detail the ways that F4DC has chosen to work in its local community. You can see that community organizing of the kind we’re supporting on the grocery store project is connected to long time frames, networks of relationships, and developing ideas.

It’s important to say that this particular written history mainly covers the early work on the coop, which was spearheaded by F4DC. At this point, in 2013, the coop development work is led by the Renaissance Cooperative Committee, to which F4DC provides technical support. But in 2011 and most of 2012, F4DC was playing the leading role, which is why this history is titled the way it is: its emphasis is on the early days, before the RCC had assumed the lead. I eagerly await the history as written by the RCC, which will have its own perspective and community-based flavor!

Since 1998, when the Winn-Dixie closed, Ed Whitfield (co-director of F4DC) and I have independently followed and occasionally connected to Northeast Greensboro residents’ efforts to bring a grocery store to the site of the old Winn-Dixie. Both of us attended early meetings of Concerned Citizens of Northeast Greensboro, just to see what was going on, and to lend our occasional support as private citizens.

In 2010 and 2011, Ed and I established a tighter focus for F4DC’s work, with a strong emphasis on cooperative economics. In the course of entering this arena, we discussed among ourselves the possibility of a community-owned grocery store on Phillips Avenue.

In fall of 2011, Ed and I had a discussion with Goldie Wells (President of Citizens for Economic and Environmental Justice (CEEJ) and founder of Concerned Citizens) about the possibility of a coop grocery store in the site of the old Winn-Dixie. At that time, Goldie wasn’t particularly interested, because she thought Sav-a-Lot was coming in. By the end of that year, it was apparent that the Sav-aLot deal was dead.

In winter-spring of 2011-2012, Ed and Sohnie Black (an F4DC staff member with a personal interest in the grocery store) began mentioning the idea of a coop grocery store in CEEJ and Concerned Citizens meetings. People showed interest, and a few took home copies of a “how to” manual for starting food coops put out by the National Cooperative Grocers Association that we circulated.

In March of 2012, I reached out to Dyan Arkin, the City Planning Department staff member with responsibility for the Bessemer Center, to discuss the possibility of a coop grocery store. It took a while to set up the meeting, but we finally met in early June. Dyan went to some length to help us understand the history of the by-that-time “past due” contract with East Market Street Development Corporation and New Bessemer Associates (the 75% occupancy deal). She encouraged us to give the coop grocery a try, since there seemed to be no other action on the Center at that time.

On July 10th, Ed, Sohnie, and I convened an exploratory meeting with Ralph Johnson, Bob Davis (co-chairs of Concerned Citizens), Wes McGuire, Mac Sims (East Market Street Development Corporation), Jim Kee, and Dyan Arkin, in which we explained how coops work, and asked for their ideas about whether/how to proceed. Goldie Wells was invited to the meeting but was unable to attend.

The very next morning, with no consultation with F4DC, Concerned Citizens or CEEJ, Jim scheduled a press conference at the Bessemer Center, and at least one TV station filmed Jim’s press conference. The news story, which can be viewed in its entirety here, included these statements and quotes:

The Concerned Citizens group who live in East Greensboro is talking about starting a co-op grocery store. In this case it would be owned by investors and people in the community who would also invest.

“The great thing about a co-op is that the community gets to decide what they want in the store, how they want the store to look, how they want the store to operate,” said Kee.

Jim also mentioned F4DC’s role in helping to find financing for a coop grocery store and compared the potential of the Northeast Greensboro effort to the recent successful coop grocery startup in Burlington, Company Shops Market. (F4DC had provided information about Company Shops the night before, as an example of how a community came together to build itself a grocery store.)

In late July and early August, Ed, Sohnie, and I made presentations about the coop approach at CEEJ, Concerned Citizens, and Woodmere Park neighborhood association meetings, to drum up interest for a field trip to Company Shops Market.

On August 8, 2012, F4DC sponsored the field trip to Company Shops Market, and took 2 van-loads of folks from the neighborhood to tour, eat lunch, and talk to a founding board member and the general manager of Company Shops. Jim Kee, Ralph Johnson, Bob Davis, Goldie Wells, and Mac Sims were on the trip, as were many of the people who went on to form the core of the RCC Steering Committee. About 25 people from the neighborhood decided over lunch at Company Shops to continue to explore how they might, as ordinary people working together, form a coop grocery store.

Throughout the fall, these folks met regularly, studied, and got more people involved. Jim Kee attended a few of these meetings. In November, the group decided to formalize its organizational efforts, and voted to name itself the Renaissance Coop Committee, because they knew the name of the shopping center was slated to change and because they liked the association with the concept of “rebirth.” The Renaissance Coop Committee publicized the fact that they would be electing officers at their next meeting in December. A front page Peacemaker article featured the RCC and its efforts.

In its December 3rd meeting, which, like all its meetings, was open to the public, the RCC elected officers and decided to commission a market study, to assess the viability of operating a full-service grocery store. Jim Kee was in attendance at that meeting, and Ed asked him if it was time for the community to formally ask the City to stop seeking a grocery store for the site, because the coop was going to take care of that need. Jim responded that there was no need to slow the process down since it had been many years since the grocery store had closed and there was no progress. “You couldn’t go any slower,” he said. He then went on to say that he wanted to remain open to any and all proposals, but that there was nothing in the works at that time.

Two weeks later, at a specially called CEEJ meeting to discuss the proposed sale of Redevelopment Commission property on Phillips Avenue to Dollar General, Skip Alston made an announcement that he was working with a group of investors who wanted to bring a full service grocery store and a renovated shopping center to the Bessemer Center. He stated that he had been working with Jim Kee on this for a few weeks. When coop people in the crowd asked Skip if he knew that there was a community group interested in opening a community owned cooperative grocery store, he responded that he did not know anything about that. Skip was then asked if his group of developers would be interested in working with the coop in a scenario where the coop group would operate the grocery store and his developers would operate businesses in the remainder of the Center. He responded that his group was not interested in that. “No,” he said. “We want the whole thing.”

The next night, at the December 18th City Council meeting, Jim Kee formally asked City Council to work with the new development group that Skip represented on the proposal that would include giving the ownership of Renaissance Center to Skip’s group of investors. In that discussion he made no mention of the community’s interest in opening a coop grocery store. In his presentation, Jim stated that he had been working with Skip on the project for the past two months.

Epilogue: In mid-February, 2013, Skip contacted the RCC to offer the coop a corner of the grocery store that his group of investors would own and operate and to say that the coop might even have its own cash register there. He was told that the coop was interested in opening a full service grocery store, not just a fresh vegetable section of a larger store. He said that he did not know this. It was later erroneously reported to City Council that Skip’s investors had offered to support the coop and that the coop had rejected the offer.

Since that time, there has been continued work in the community by the RCC leadership group and growing understanding and support for the coop grocery store. Skip and his investors met with the RCC and amended their original offer to say that they are now willing to lease the grocery store space to the coop at the same rates the coop requested from the City. RCC also met with New Bessemer Associates, the developers who are seeking the contract for doing the construction and upfit work on the Center, but are not seeking ownership. They too expressed a willingness to work with the coop and offered the fact that they had built the successful Deep Roots expansion as proof of their competence and willingness to work with coops.

Private investment is private investment, whether it comes from individuals or a community

Bessemer Center, Northeast Greensboro (Photo by Eric Ginsburg, Yes Weekly)

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.

Bessemer Center, Northeast Greensboro (Photo by Eric Ginsburg, Yes Weekly)
Bessemer Center, Northeast Greensboro (Photo by Eric Ginsburg, Yes Weekly)

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!

Eliminating food deserts and building community ownership are keys to sustainable development

Steve Dubb and David Zuckerman recently published a great article explaining how eliminating food deserts is critical to developing sustainable communities. This is precisely what the folks in Northeast Greensboro are working on through the Renaissance Community Coop. We are thrilled to join them in this effort and excited about the transformative potential it has for their community, and the city of Greensboro more broadly.

The authors point out that grassroots focused economic development is important – critically important – but that community ownership is equally vital and often times overlooked. They go on to briefly outline other communities using community-owned cooperatives to eliminate food deserts and build community wealth:

One strategy for ensuring community ownership can be seen in Pittsburgh’s Hill District. In 2008, community organizations successfully negotiated the city’s first ever Community Benefits Agreement (CBA). As part of this agreement, the Hill House Economic Development Corporation received $2 million in commitments from the Pittsburgh Penguins and the Pittsburgh Urban Redevelopment Authority to help develop the neighborhood’s first grocery store in over 30 years.

Importantly, Hill House EDC continues to own the land on which the store is built, ensuring that lease payments provide earned income revenue for years to come to financially support the nonprofit. Additionally, as part of the CBA, Hill District residents referred by a newly established First Source Center receive first consideration for all hires.

They close by noting that,

A framework for revitalization that includes local purchasing and hiring, employee and community ownership, and anchor institution and community stakeholder support is necessary to guarantee that, over the long term, the community retains control of its important assets.

Ridding communities of food deserts so that the people have access to healthy and affordable food is a cornerstone piece of redeveloping our neighborhoods to be sustainable. Community-owned businesses can play a critical role in this work. Reinvesting money directly back into those communities through democratic processes is equally important. The Renaissance Community Coop is building just such a business and, in the process, re-imagining their community as one that is democratic, just and sustainable.

Read the full article here.

Economic Incentives? Yes, But Directly to the Community

Renaissance Community Co-op
Renaissance Community Co-op
Renaissance Community Co-op

Despite what many people believe, there are not many ways for city governments to directly impact economic development in communities. Cities don’t directly start businesses that provide goods and services and create jobs. Cities will tell you that their job is to create and sustain the infrastructure needed by business, and then let the market take over. That means to let businesses be created where owners will profit, let sellers sell for as much as the buyers are willing to pay, and let jobs be created paying wages that allow investors an adequate return on their capital.

But there are clearly times when market forces are not adequate to provide the development that a community desires. If market forces alone were sufficient, someone would have put vibrant stores back into the Renaissance Center (formerly the Bessemer Center, located on Phillips Avenue in Northeast Greensboro) years ago. What developer after developer has found is that the projected return would not make their investment worthwhile. That does not mean that they could make no profit, only that they couldn’t make enough for their investors to be satisfied.

What the city is able to do in such situations is to offer incentives that ‘sweeten’ the deal for a developer. This benefit to the private developer is justified in the hope that it will lead to a pubic good. The idea is that incentivizing a developer will enable enough profit to justify the investment, and the community will indirectly benefit as a byproduct of the profits made by the developer.

That’s the idea, but things don’t always work out that way in practice. What often happens is that the city buys a distressed property at its market value. It is then made available to a developer at below-market rates, so that the developer can “improve” the property, and thus justify renting it at market rates to entrepreneurs who try to make their businesses succeed. In good economic times this might happen. But in rough economic times, like now, we often see a series of businesses moving in and then failing in newly developed areas. We end up with a lot of empty commercial space, run down business districts and underserved communities. In times like these, high rents can be the death of businesses.

On Phillips Avenue there is an opportunity to directly benefit the community by bypassing the below-market-rate deal to a private developer and instead making an incentive deal directly with the group putting together the community-owned cooperative grocery store. Incentivizing this group would facilitate a vibrant community business operation that would be the hub of future growth in the area. Unburdened by high rent, a coop grocery store could meet the need for convenient, quality food at reasonable prices and allow for surplus to remain in the community to enable additional economic development and further enhance the community.

The city should engage in a public/community partnership with the Renaissance Co-op Committee. This is the community group that is working to build a community-owned cooperative grocery store in the center. In this relationship, the city would agree to make funds available as grants and loans with negotiated rates and payment schedules to help make this project a success as they have done with private developers on other projects. With the reduced cost of business space, a well-designed and efficiently operated cooperative grocery store has a great shot at thriving and becoming an engine for economic development in the area.

We often measure economic development by the amount of capital we can attract. I think we should begin to measure it by the capital we can retain in the community. This is what can be used to enable job creation, satisfy community needs, and increase community wealth. We need to find better ways to measure local economic development activity so that we do not celebrate putting money into a community in such a way as to mainly facilitate sucking wealth out of it rather than keeping it in and building on it.

We have lots of money in our community like a river. But the money flows out as people spend to take care of their wants and needs. Currently money that flows through is gathered by investors seeking the highest returns on their investment. This causes them to seek to invest in areas where they find low taxes, lax environmental protection, and low wages—the very factors that damage communities.

We need to slow this flow. We need to construct dams to create the pools of money that can remain in our communities to be used for ongoing development. Cooperative economic ventures that are by their nature democratically owned and controlled provide a means to do this. When communities control the wealth that they produce they can use it to create jobs, meet community needs and elevate the quality of life even subsidizing the arts and recreation, environmental sustainability and community healthcare. With the proper incentives to the right people, the city’s economic development policy and practices can be important parts of helping this happen in the interest of the city as a whole. Public resources should only be used for public purposes, not to further enrich private investors.

Yes Weekly: Neighborhood aims for co-op grocery in food desert

Bessemer Center, Northeast Greensboro (Photo by Eric Ginsburg, Yes Weekly)

This week’s issue of Yes Weekly features a lengthy article from Eric Ginsburg about the Renaissance Cooperative Committee’s effort to launch a cooperative grocery in Northeast Greensboro. The Fund for Democratic Communities is thrilled to be supporting their work to bring a community-owned store to their neighborhood!

Continue reading Yes Weekly: Neighborhood aims for co-op grocery in food desert