Hyde Park Co-op Closes After 75 Years
Chicago’s Co-op Markets, known historically as Hyde Park Co-op, closed in late January 2008 after operating since 1932. In a late 2007 referendum, co-op members supported closing the store by 61 percent to 39 percent. The board of directors approved that choice seven to one.
One of the oldest and largest of the nation’s consumer cooperatives, Hyde Park Co-op for several decades successfully operated a full-service supermarket. Taking its name from the surrounding neighborhood, the co-op anchored a small shopping center on commercial property owned by the nearby University of Chicago.
The co-op’s end was a sad occasion not only for members in the Hyde Park area but also for cooperators elsewhere. Over the years, Hyde Park Co-op had hosted co-op conferences and management meetings, and up to the 1990s it provided one of the remaining ties to a generation of consumer cooperatives launched in the 1930s and 1940s. Former Hyde Park Co-op manager Howard Bowers mentored several current co-op managers, and later a co-op scholarship fund was named in his honor (see page 8).
Based in a 32,000-square-foot facility located on 55th Street near Lake Shore Drive, Hyde Park Co-op operated profitably for many years and typically gave a year-end patronage refund to its thousands of member-owners. But over time, its store size seemed small in comparison with most competing supermarkets.
Seeking to expand its sales base, the co-op committed to a large, new venture. But after it opened a much larger second store in 1999 on 47th Street in an Empowerment Zone redevelopment project, the co-op’s fortunes suffered a permanent downturn. The surrounding development that was to accompany the grocery retail never materialized. The co-op lost money during five years of operating the new store.
Financing and leasing for the project was complex. The lessor of the 47th Street store site, Certified Grocers, was also the co-op’s primary distributor and would not let the co-op out of its lease. Even after the store was closed in January 2005, persistent efforts to find another company to take over the lease failed. Consequently, the co-op continued paying rent of over $1 million per year for an unused site.
During this period the co-op took over a third, small store in the Hyde Park neighborhood, a facility also owned by the University. But the co-op sold that operation in 2006.
Heavy debt service made maintenance and improvements to the 55th Street store difficult. Added problems in 2007 included major power outages, a bumpy transition to a new cash register system, a robbery, and cash flow shortages with vendor supply gaps. In early 2007, the co-op stayed current with vendors by withholding rent payments to the University of Chicago.
Subsequently, the University offered to forgive $1.2 million in rent in exchange for the co-op giving up the location. In late November, a co-op referendum offered members a choice of bankruptcy, which would allow abandonment of the 47th Street lease and a chance of recovery, or closing the co-op and letting the University find another retailer for the 55th Street store. A flurry of debate occurred at board and member meetings and in the co-op’s newsletter. Many directors and co-op members accused the University of underhanded tactics in the weeks leading up to the vote.
Following the December vote, the co-op’s board of directors announced that members had approved closing the co-op. Subsequently, the board voted to support this direction. The closing of Hyde Park was planned for January 2008.