Eastside Food Co-op

The little co-op that could

After almost eight years of effort by neighbors in Northeast Minneapolis, the Eastside Food Co-op, a 6,600-square-foot natural foods grocery store, opened on December 4, 2003. Billing itself as a “one-stop shopping experience,” the co-op carries fresh and frozen meats, a wide dairy selection, two aisles of packaged groceries, bulk foods, herbs and spices, health and body care products, and a gorgeous produce section featuring organic fruits and vegetables. A small deli with hot soup and beverages, baked goods, and grab-and-go salads completes the mix.

Early efforts
Behind this store is the story of “the little co-op that could.”

In the early 1980s, the existing food co-op in Northeast Minneapolis closed, mainly due to poor management, as the story goes. Within a few years, Northeast neighbors were organizing to bring this asset back. The first couple efforts failed; the groups lacked both the skills and the people-power to maintain momentum. One group, Northeast Community Co-op, got as far as selling 135 memberships before the leadership burned out and gave up the effort.

In 1999 a small group of members revived the organization and incorporated it as the Eastside Food Cooperative (EFC). They said, “We think we CAN build a co-op in Northeast Minneapolis.” They began meeting on a regular basis, sponsored potlucks to keep up community interest, held a plant sale to raise funds, and began publishing a newsletter.

During the winter of 1999-2000 a feasibility study was conducted by a team of students at the University of St. Thomas Small Business Institute. The study was done pro bono, and the team came back with good news: “We think you CAN build a co-op in Northeast Minneapolis.” In fact, their instructor stated, “If you don’t do it soon, someone else will.” With energies renewed, the EFC board continued the work of developing a mission statement, enlisting more members, drafting a business plan, and planning a second plant sale as well as a local farmers market.

As part of its community outreach, Eastside Food Co-op presented its project to the Holland Neighborhood Improvement Association (one of 13 neighborhood associations in Northeast) and asked for its support. At HNIA’s October 2000 general meeting, neighbors voted to grant the co-op $50,000 of Neighborhood Revitalization Program (NRP) funds and to give it free office space. They said, “We think we CAN build a co-op in Northeast Minneapolis.”

NRP is a 10-year program that enables neighborhoods in the city of Minneapolis to plan and fund projects, improve housing stock, and engage in community development. Over the next two years, four more neighborhoods—Windom Park, Audubon Park, Waite Park and Sheridan—decided to invest in the Eastside Food Cooperative, bringing total support from NRP grants and loans to over $500,000. In addition, the co-op was the recipient of a $7,200 Community Initiatives Program grant and an $11,000 Neighborhood Initiatives Program grant, which provided technical assistance and matching funds for low-income folks who wished to become co-op members. (See sidebar on “Capital Sources and Uses.”)

In January 2001, the co-op hired its first staff person, Project Manager Ken Jerome-Stern. Ken came to the job with experience in co-ops and economic development. In addition to fielding phone calls, opening mail, supporting the board, and completing the business plan, Ken made presentations to neighborhood groups, found technical support resources, and began working with the site planning committee to find a location for the store.

A marketing study conducted by Steve Dorn of Cooperative Development Services was completed in the fall of 2001. Based on the study, the board selected as its primary site a soon-to-be-built senior apartment project that would include about 7,000 square feet of ground-floor retail space.

While the business plan for this site was being finalized and presented to area banks, the board made plans for a member loan campaign, with a goal of raising $250,000. A slogan was adopted, “We Own It—Now Let’s Build It! Our Member Loan Program Is the Link.” The campaign was kicked off in February 2002.

Phase One of the loan drive consisted of a series of “house parties,” in which the project manager and a board member made the “pitch” to a group of members, answered questions, and facilitated a brainstorming session about folks’ vision for their co-op. This format was very useful in enabling members and board members to meet each other, giving the board and staff more experience in articulating the goals of the co-op, and giving members a chance to say once again, “We think we CAN build a co-op in Northeast Minneapolis!” We raised about $110,000 in loans and pledges.

In 2002, a very big year for Eastside Food Co-op, we raised over $8,000 through our annual plant sale and a pancake breakfast. Member loans reached $180,000, while membership grew past the 500 mark. We secured loan agreements from the stakeholder neighborhoods. We continued to increase organizational capacity through trainings with Bill Gessner of Cooperative Development Services and the addition of two more board members.

One result of that increased capacity was choosing a new site for our project. The project of which we had planned to be a part had “stalled out” in early 2002, and we needed to pursue another site. In late October, the co-op signed a purchase agreement on a building and parking lot one block from Central and Lowry, the third busiest intersection in the city.

The prospect of buying a building, adding over $600,000 to the $1.2 million project cost, made it essential that we secure the rest of the funding for the project—soon—as well as hire a design/build team and a general manager.

Of the six banks where we applied for a $500,000 mortgage on the property, our local Northeast Bank was the first to respond. The $100,000 down payment came from member loan funds. The bank further invested in our project with a second loan and a line of credit, enabling us to completely close our funding gap and move one giant step closer to contracting for the NRP monies that had been committed two years earlier.

2003: the store is prepared
As 2003 began, the momentum that had been building reached a head, and things began moving very fast. The building purchase occurred in mid-March, and the following week the board hired Amy Fields, formerly of the Community Mercantile in Lawrence, Kansas, to be the general manager. Architects Partners & Sirny began working on store layout and design, with the help of Blooming Prairie’s P. J. Hoffman. The board approved a “1% for Art” project, committing one percent of the project budget to commission artwork from local artists to enhance the store.

Our builder began construction on August 18, and on August 20 the co-op held a ground-breaking ceremony honoring all those members and other community stakeholders who contributed so much toward making this co-op food store a reality.

Our store opened on Thursday, December 4. It’s a great feeling to have reached the top of the hill. Now we are shopping at the Eastside Food Co-op and chanting, “We KNEW we could, we KNEW we could . . .”

I’d especially like to thank fellow board members, Lauren Culbert, Leslie Watson, Rod Stevens, Kevin Reich, Pat Hickey, Cilla Utne, Cari Pinkowski and Tony Anastasia, as well as former board members Norma Thomson, Stephanie Lundeen, Sophia Shuran, Jeff Zeitler, and Kathy Ahlers.

See other articles from this issue: #111 March - April - 2004