Food Co-op Looks at Sites

Columbus, Indiana
By external news source

A local food cooperative is conducting detailed studies of two potential sites for a grocery store after opting out of the lease for a site on the north side of Columbus.

Columbus Food Co-op is studying the markets and sites, estimating costs and generating 10-year financial forecasts, said Kevin McCracken, the board’s president. It could take as little as a month or up to six months before the board has enough information to determine if it wants to begin negotiations for either site, he said.

Both properties are within the city limits, but because of nondisclosure agreements McCracken said he could not offer specific details about the sites.

“The sites are visible. And from a rental management perspective, they are desirable and accessible,” he said.

Columbus Food Co-op started as an idea in 2010.

It had been looking at opening a grocery at the former Aldi store at 1750 25th St. Startup costs for the project, including remodeling the 16,000-square-foot building, were projected at about $1.8 million.

The co-op had about $324,000 already toward the project. Commercial lenders also promised about $726,000, contingent on the co-op raising $750,000 through a capital campaign. About $432,000 had been secured through collections and pledges, said SaraBeth Drybread, the cooperative’s community outreach coordinator.

An Oct. 29 lease opt-out deadline loomed as the co-op still needed more capital and was continuing to pay to hold the site.

Two previous lease extensions for the property had been successfully negotiated, but attempts to negotiate a third extension were unsuccessful, McCracken said.

“Those holding costs were adding up every month. The board felt it couldn’t afford to hold the site because of the cost. We came up with a proposal, a financially conservative proposal, but the owner was unwilling to budge,” McCracken said.

The co-op’s leadership notified the owner of the former Aldi property of its intent to vacate by Oct. 29.

Co-op members were updated about that decision and the two new potential sites during the co-op’s Nov. 17 annual meeting, Drybread said.

Cooperative leaders always try to be aware of what properties are available and could be possibilities for the grocery store, McCracken said. The two new options were identified during the summer as a backup plan in case the co-op had to opt out of its lease, he added.

“The early indication is that they could be at least as viable and be more affordable,” McCracken said.

Final costs for each property and how much would need to be raised through a capital campaign aren’t known yet. The co-op is reaching on how viable and affordable the two properties are, and whether either is ultimately worth the investment, he said.

The co-op won’t start a capital campaign before then, McCracken said. However, the cooperative continues to seek new members.

The co-op has 854 members, up from 700 when it first leased the Aldi site in November 2014, DryBread said.

A co-op is cooperatively run by its member-owners. A primary difference between a co-op and a traditional chain grocery store is a greater emphasis on quality and service without pressures to meet profit level of corporate-owned stores, McCracken said previously.

What’s next

The Columbus Food Co-op is in the process of studying two properties as a potential site for a grocery store.

The co-op needs to finalize for each property a market study and site evaluation, cost projections and sources and uses of funding, and a 10-year financial forecast.

Once all that information is obtained, the co-op’s board will determine whether to open negotiations with either property owner.

The process could take anywhere from one to six months.