Last month was a major turning point for the East Aurora Cooperative Market. We made some big decisions in January and we are on track to reap the benefits of a great deal of forethought and planning.
A Letter of Intent to secure the site has been reviewed by both our prospective landlord and our board and we are hopeful that we can reach a mutual agreement on the terms and secure the site within the next few weeks. There are a number of steps, including environmental studies and design work, that we need to successfully navigate in order to get to a final lease. This is a process that requires a great deal of patience, compromise and the clear understanding that each step needs to be carefully weighed within our financial pro forma. Ultimately, our leasing this site has to fit into that pro forma without straining it beyond reason. We are cautiously optimistic and appreciate your support as we work to make the best decision possible for you, our members.
In the meantime, our next biggest challenge is the capitalization of our store. We are currently planning a capital campaign which will begin at the end of April when we will offer an opportunity for our member owners to invest in the store in one of two ways: through the purchase of Preferred Shares or by making a member loan to the co-op. The Preferred Shares are non-voting shares, (unlike a membership share which has one vote per member). Both options are common ways in which co-ops around the country accrue the capital to finance much of what is necessary to bring the store to fruition, such as design work, construction, equipment, staff hiring, and inventory. Success with our capital campaign is crucial and will increase our chances of receiving loans from outside lenders while limiting how much outside debt we incur.
Recently, you received some mail from us outlining proposed changes to our Bylaws and Certificate of Incorporation that, with a successful campaign, will enhance our financial outlook. Simply put, we are asking to change our Bylaws and Certificate of Incorporation to allow us to offer preferred shares (non-voting shares) in addition to member loans during our capital campaign. Being able to do so will allow us to gain equity and limit our debt because preferred shares translate as equity on a balance sheet, whereas loans are registered as debt. Ultimately, this improves our financial picture and will be favorable when we are seeking banks loans.
We are holding a Special Member Meeting on February 25th at 6:30p.m. in East Aurora, at the Aurora Town Hall, 300 Gleed Avenue, where attendees will vote on the amendments we are proposing. Please plan on attending this very important meeting and exercise your vote. This is a great example of one way your voice can be heard as our store and our organization take shape.
Also in January, the board voted to accept an agreement with the National Cooperative Grocer’s Association’s Development Cooperative (NCGA DC) outlining their assistance in opening our store. Not all start-up cooperatives qualify for this program and being a smaller store, we are both fortunate and thrilled to have their help. They draw from the best practices of hundred of co-ops throughout the country and will aid us in the tasks of managing our pro forma, completing store design, marketing, staffing, purchasing equipment and more, up until a year after the store is open. At that time it is our hope to become full members of NCGA, their parent organization.
A great deal has been accomplished in the last month. We now ask you to do your part and vote on these changes so that we can continue our work in building a store that both suits and serves our community and where you are going to love to shop.