Capital Campaign Countdown!
TL;DR: We've outgrown our shell! (Scroll to the bottom for the highlights)
It is no secret that Spiral Food Co-op has hit the limit of what we can do within the confines of our 1872sq. ft. space. We were bursting at the seams almost as soon as we moved into the space and expansion talks started almost immediately. Since Matt Malecha came on board in 2015 he has been cultivating a team who can take on a project of this magnitude. From stabilizing the company infrastructure and joining forces with National Co+op Grocers (NCG), it looks like our little store is finally able to start taking steps toward expanding!
The Planning Phase:
Before we are able to execute on any plan, Spiral Food Co-op must raise funds for the project through what is called a Capital Campaign. Most Spiral veterans will be familiar with this term sense we went through a fundraising period in order to move into our current location in 2011. This round of fundraising is more similar to 2011 than our request for assistance in 2018, when we sold shares of the Co-op to our owners to increase stability for the store. We are profoundly grateful to those members who were able to pitch in to both, propel our co-op forward and keep us afloat during two big shifts in our history. We are, once again, asking for your support. However, this time we are raising money because we are doing well and we want to continue that amazing momentum.
We need more space! Spiral needs to grow for a number of reasons, chiefly, we would like to take full advantage of our newly forged relationship to NCG and their pricing by bringing in more products, expanding variety, and reducing prices.
Based on the results of a market study in 2018, three locations in Hastings we identified for the expansion of Spiral Food Co-op. Since 2019 the team has evaluated several different plans for purchasing, renting, and redevelopment. Along with MidCountry bank, we think all parties have found an exciting solution to the issues of: “where do we expand?” and “how much can we afford?” This decision gives us information about how much money Spiral needs to raise from its owners, and how much work will need to be done to complete this project.
The First Step:
We are excited to announce that it is the intention of Spiral Food Co-op to purchase the building at 1250 Frontage Road (our current location) and expand the store into the entire footprint of the building. This would bring the square footage of our retail space from 1,872 square feet to 5,000 square feet, almost tripling it! This means we will be able to expand the variety of foods and brands that we offer, carry more back stock (so that we’re less likely to run out of the things customers love!), and increase the size of our deli; just to name a few highlights.
The Capital Campaign:
This is where we ask our owners and our community for their support raising the funds necessary to expand. Our goal is to raise $500,000 from the community.
This shared fiscal responsibility is one of the many benefits of membership because it provides a rare opportunity to invest directly into the local economy. The shares that are purchased, are purchased from an entity that you drive by on Highway 55 every day. Every dollar that is lent to Spiral stays in the community. Whether that means we purchase directly from local farmers or we source our goods from the warehouse in Prescott, WI. Your dollars have a real impact on the Hastings community, including other small businesses, that you will be able to witness firsthand as we expand.
Cooperative Principle #3 is currently coming into play as the Spiral attempts to secure financial assistance like bank loans. Since ownership of the cooperative is spread across 1400 owners, in our case, there is no collateral that Spiral can use to reduce the bank’s risk other than the groceries on the shelves. For this reason, when cooperatives need to expand, the lending institution requires that cooperatives raise a portion of the project cost from their owners. To the bank, this signals that there is investment from the owners and interest from the local community to see this project thrive.
The project cost comes to 1.9 million dollars, and our goal is to raise $500,000 from our owners. This is slightly more than 20% of the total cost, but every dollar that we raise from our community is a dollar that we don’t have to borrow from the bank.
Next Steps:
On August 1, 2020 we are going to be Rounding Up At the Register for the Spiral Capital Campaign effort. We aren’t quite ready to start taking checks for Preferred Shares or Member Loans yet, but we are ready to start talking about the project, answering questions, and taking pre-commitments. All donations that are made at the register will go toward the Capital Campaign, and you can round up any amount. Any money that we generate through Round Up will be tabulated as donation, but, since Spiral is a for profit business, these donations are not eligible for deductions on your taxes.
Also starting on August 1st we will be starting our biggest owner drive ever. Our goal is to sign 300 new owners up. This $30,000 commitment goes toward our goal of raising $500,000 in order to begin our expansion project. In addition, each new owner will have the opportunity to contribute to the Capital Campaign by gaining access to Preferred Shares and Member Loans simply by becoming owners. Not to mention all of the fresh faces in the store will help add to the excitement of our upcoming expansion.
Postscript:
There is a third event happening on August 1, 2020. We are rolling out our co+op basics program. This program offers a significant discount on a variety of items that our shoppers buy on a regular basis. Be on the lookout for more information about that program, and also come and shop after August 1st to take advantage of the new pricing!
TL;DR:
1 - It is our goal to buy 1250 Frontage Road in order to expand the footprint of our existing store.
2 - We are in the beginning phases of getting commitments for our Capital Campaign effort.
3 - The Capital Campaign effort will help us raise $500,000 for our expansion project.
4 - Please Round Up at the register, become an owner if you aren’t already one, and if you are an owner, please request more information by emailing marketing@spiral.coop. Capital Campaign packets will be available soon!
5 - Ask us all the questions! We want to answer them.