Can co-op sell without selling out?
Members consider ‘community-minded development’
The idealists who formed Food Front Cooperative Grocery wanted it all—healthy, local food sold at moderate prices in a store democratically run by “the people.”
Fifty-two years later, owner-members of the shuttered food co-op must decide which, if any, of those goals might be salvaged in a post-Food Front world.
Some still believe the co-op, infused with new loans and inspiration, could make a fresh start, though a hybrid form is the most that the current board of directors can contemplate.
Members are being surveyed to guide the board, which will choose a path and seek membership confirmation in a month or so.
A questionnaire distributed online in mid-December gave strong clues as to board’s leaning on four options.
Reopening
“The board has determined that this option is difficult—nigh impossible—with the current level of expertise, volunteers or funding that we have,” the questionnaire read.
Selling to Market of Choice
Accepting a $1.9 million offer from Market of Choice would be “the quickest, easiest” way to recreate the high-quality, local food store Food Front strived to be, as well as preserving neighborhood-scale architecture.
Community-minded redevelopment
Redevelopment led by Skylab Architecture, a Portland firm with strong Northwest District connections, would come closest to a home run in the eyes of board members.
“Skylab is a world-renowned architecture firm with notable works in environmentally sustainable and cutting edge building designs,” read the questionnaire. “Though it may have a longer lead time, it potentially allows us to keep the co-op values, work with other local institutions, keep a grocery store in the building, and offer more value to the neighborhood and Portland as a whole, holding a space open for creative solutions toward our community needs.”
Selling to highest bidder
“This may become necessary if we run out of funds before moving on any of the other opportunities,” members were advised. “The greatest risk and concern for the neighborhood would be that we have no way of controlling what becomes of the property.”
The alternative paths were fleshed out by four presenters at a board meeting in October attended by about 50 members.
SURVEY RESPONSE?
Reopening with new vision
Although first on the survey, building a better co-op was not entertained until the third hour of a marathon meeting. Board member Collin Ferguson, who recently graduated from St. Mary’s University with a degree in cooperative business management, has studied thriving co-op enterprises in Italy.
A grocery store is merely the launching pad for Ferguson’s vision for Food Front.
“Imagine that instead of just selling, we revolutionize into a shared services cooperative platform,” he said, one that couples technical savvy that extends to membership engagement, shared services and perhaps even real estate investment to “catalyze an exhilarating transformation.”
Market of Choice
If pie in the sky did not light a fire at the assembly, the possibility of selling to Market of Choice did. Company CEO Rick Wright summarized the evolution of his family’s business launched with a Thriftway store in Cottage Grove and taking off in 2000 with a rebranding. The 11 stores in the chain are part of a self-contained company with its own distribution system and central kitchen making many of its products.
Although Market of Choice’s other stores are several times larger than the Food Front building, Wright believes 2375 NW Thurman St. may be an ideal location to test a small-scale model, given the population density and walkability of the area.
Noting that small grocery stores thrive in Europe while struggling in America, Wright is intrigued by the challenge of solving that puzzle.
“If it doesn’t work at this location, it might not be a model that works anywhere in the country,” he said.
“I already have a company that’s large enough to cover my overhead,” Wright said, contrasting his situation to that of Green Zebra, a three-store Portland grocer that closed last year.
Green Zebra founder Lisa Sedlar, one of the presenters at the Food Front meeting, said each of her small stores generated surplus revenue, though not enough to cover central administration.
Wright is offering less than market value for Food Front’s property because he estimates it might take another $2 million to repair and remodel the building, furnish, supply and be ready to open.
He would not promise an opening date but said the uncertainty is mainly in the hands of the Portland Bureau of Development Services and its sluggish building permit process.
“It’s not a shoo-in,” he said. “I just think of it as an interesting project. I love the neighborhood. If I lived in Portland it’s probably the neighborhood I would live in.”
Former Food Front board member Toren Orzeck gushed about the thought of a Market of Choice here.
“To keep this little piece of property as a community hub,” Orzeck said. “Oh, my gosh! It sounds so wonderful.”
“I’m just all in favor. I just can’t see a better option,” he concluded.
Longtime Food Front member Susan Stone was another convert.
“If Rick is going to give us a Market of Choice like the other ones, I just have to say that I’m delighted.
“The question is: What can we move into the future that will keep that spot as a social hub for our neighborhood, because my great fear is that it’s going to turn into condos and break up that wonderful little business district. Whatever we can do to put something there that … adds to the vitality of the neighborhood and be a good business, I would be delighted.”
Community-minded redevelopment
If Wright presented the best hope of a healthy food store, SkyLab founder and principal Jeff Kovel shared broader visions of a package that might including growing food in a greenhouse, affordable housing, street festivals, a hotel and a retail space for Food Front.
Kovel, who has two commercial properties and used to live on Northwest Thurman Street, made the case for a multiuse building that could include a space for a Food Front market.
Kovel would have to convene various partners to determine what elements might be viable, a process requiring at least three years to unfold.
“I could show tons of examples of finished products that would fit really well here,” Kovel said. “I think you can find the right development team, and that’s the role I’m trying to play to help avoid a random development team.
“The worst-case scenario is that a developer comes in and builds a crappy housing project here that nobody likes and ruins the integrity of this block forever, and we’ve seen that happen all over the place.”
Another longtime Food Front member, Jere Grimm, wants the co-op to aim high.
“If Market of Choice could partner with a development of five stories, and those five stories would provide the affordable housing that’s so terribly lacking in Northwest Portland, I think we would have a winning combination.
“I think the mission-driven approach with affordable housing and still gaining a great food source [within walking distance ] would be a winner.”
Selling to highest bidder
“Should the other options be less favored or not come to fruition, another opportunity is to put the property up for sale and sell to the highest bidder,” read the questionnaire. “This may become necessary if we run out of funds before moving on any of the other opportunities. The greatest risk and concern for the neighborhood would be that we have no way of controlling what becomes of the property.”
The board obtained a preliminary estimate of $2.3 million-$2.7 million for Food Front’s one-third acre parcel in November.
“It’s a far cry from what I think we’ve been throwing around for a long time,” board Chair Mike Grivas said.
Earlier discussions assumed a market value in the $4 million-$6 million range.
Whatever the sale price, members would have to approve dispersal of the proceeds. Options discussed to date include donating to a local charity or dividing them among members.