Though members say sell, Co-op leader believes in resurrection

Will of owners be damned, leaders of closed co-op seek resurrection

Roman Shvarts posted this unintentionally revealing photo on the Food Front website.

The spirit of Food Front Cooperative Grocery endures a year after the store ran out of money and closed its doors.

Because the co-op holds title to the building and parking lot at 2375 NW Thurman St., loyal owner-members and directors of the corporation hope to parlay their asset into some future role for the organization—perhaps even reincarnation as a grocer.

Despite indications that an overwhelming share of co-op members want to sell out to a Market of Choice, the dream does not die easily. Spurning a straightforward offer from the Oregon-based family owned grocer that could have wiped out the co-op’s looming debt and provided the neighborhood with a quality food store, the co-op board is chasing an amorphous deal with Skylab Architecture Principal Jeff Kovel and local restaurant creator Kurt Huffman.

The board is postponing its decision in order to accommodate the timing of Kovel, who has downsized his vision since he and Market of Choice owner Rick Wright presented competing plans to Food Front members last November. No deadline for that proposal has been established, and promises of a finished document have fallen through.

However long it takes, Food Front President Roman Shvarts waits optimistically while ignoring Market of Choice. Shvarts told co-op members in March that he has had no had further contact with Wright since November and has no assurance that his offer still stands.

Meanwhile, he is in regular contact with Kovel, whose proposal floats somewhere between a concept and set of goals. At the March meeting, Kovel described a European-style produce market with 10-foot-wide open stalls, as well as small shops that could be rented to vendors of ready-to-eat foods, wine, pastry, flowers, meat, seafood, coffee, etc.

Kovel, a resident of Willamette Heights, knows Food Front’s history and culture.

He opened his presentation with a recitation of the co-op’s founding tenets and posed the question: “How can we revitalize the mission of Food Front?”

The vision for the site involves a total of about 18 stalls and enclosed retail spaces, of which two have committed tenants and two have potential operators. Open space that could be used for live music, gatherings or dining is also part of the concept.

Huffman, the founder and CEO of ChefStable, has opened or partnered in more than 60 restaurants. He is curating the ready-to-eat food part of the scheme, which is to include at least two businesses he owns:

• Olympia Provisions, a Huffman restaurant on Southeast Division Street describing itself as a “destination for refined European-style dishes.”

• Dos Hermanos, a Mexican bakery on Southeast Stark Street, of which Huffman is the primary investor.

• A wine bar by Huffman’s ChefStable is listed as a possibility.

Fresh produce, the primary thrust of the open market, is a blank spot in the lineup, though Food Front is penciled in as the possible vendor or at least a connector to a possible green grocer.

Accommodating a sufficient array of businesses would involve expanding the existing Food Front building over all or part of the parking lot.

The Skylab proposal would keep Food Front alive, at least on paper, as a part-owner in the redevelopment. Shvarts said Kovel is willing to retire Food Front’s debt of about $1 million and assign $2.3 million as credit for transferring the real estate to the new venture. This minority ownership stake would give Food Front “a seat at the table” to see that the market runs “as we would like,” Shvarts said.

In such an arrangement, the co-op would be entitled to a share of profits while being responsible for potential losses.

Shvarts believes this is a much better deal than selling to Market of Choice.

“They’re offering hundreds of thousands more than Market of Choice,” he said.

Shvarts characterized Wright’s offer of $1.9 million as forcing the co-op to “take a haircut,” receiving less than the informal $2.3 million-$2.7 million appraisal the board commissioned last year.

Outsider rises

A year ago, Shvarts was on the outside. Born in Russia, he immigrated to Portland as a child and studied business at the University of Oregon. After Food Front closed last year, he launched a site on Discord, an instant messaging program, to rally beleaguered members and employees of the co-op who did not trust the board of directors.

He was appointed to fill a vacancy on the board last summer and became president when former President Mike Grivas and two others resigned in March. Shvarts kicked off the March Food Front meeting by announcing the resignation of the three with no explanation beyond “the people who resigned felt it was the right time to do it.”

Shvarts is now the senior member of a board of four, the others all appointed in November.

Deadline looms

Shvarts and his band of rookies must balance the surety of prompt action against holding out for a more fickle suitor. There is a risk in keeping the door open for Kovel too long.

Food Front remains solvent only because it obtained a hard money loan backed by the value of its real estate. The $1 million loan involves monthly payments on interest until mid-2025, when the remaining balance must be retired. Failure to satisfy the terms would strip Food Front of its only asset.

“The closer they get to that deadline, the less negotiating leverage they have,” said Ed Carpenter, a longtime member and owner of commercial property directly west of the co-op. “Buyers know that, and they can name their price.”

“I don’t disagree with that,” Grivas said.

Although Grivas appreciates Kovel’s need to hone his multifaceted proposal, he has grown impatient with the delay.

“It’s taking too damn long,” he said. “I would never have recommended going so long.”

The delay works in Kovel’s favor. As months pass, Food Front’s predicament compounds. Should he pull out or for any reason or be unable to put together a group of investors, the co-op would have to find an alternative under fire-sale conditions.

In February, Shvarts announced publicly that “we’re not under any duress and we’re not worried” about completing a deal in time. He told members in mid-March that “we have about a year to decide.”

No schedule or deadline for making a decision has been announced. Shvarts is not worried about the fact that Kovel and Huffman have not signed a contract or deposited earnest money to lock in their commitment.

“They’ll pay as soon as necessary,” Shvarts said.

A survey asking members to choose between the two options was sent out March 27. Shvarts said it would be used to “inform the upcoming vote and sale of the property. We will take into account the preferences and opinions expressed below when deciding the future.”

Survey buried

At least three former board members and a few regular members do not feel Shvarts lived up to that standard in handling a member survey conducted in December. All now agree that Market of Choice came out on top over a redevelopment deal assembled by Kovel, although Shvarts interpreted it as “there is no consensus with what the owners want.” What hasn’t been said publicly is that the survey results were not a close call. Market of Choice came out on top “overwhelmingly,” according to emails shared among board members.

Shvarts told the Examiner: “We chose not to release the raw data, as it was supplemented with comments that provided more profound insights into participants’ preferences.”

No reason was given as to why those profound comments could not have been released.

“The board never intended December's survey to represent an official vote or basis for any specific course of action,” he wrote the NW Examiner in an email.

There may be another reason for keeping the results under the table.

Shvarts has refused requests from several sources to release the full results of that survey.

Will results of the survey currently underway relegate the earlier one to ancient history?

Shvarts is making a push to see that survey 2 comes out to his liking, championing Kovel’s option at multiple public settings.

He told the Northwest District Association Planning Committee in February that Kovel and Huffman “have the talent and desire to make it work” and their proposal “allows Food Front to continue.”

“He already has a plan and the people, and he’s going to bring it in,” Shvarts said, promising the “final vision” in two weeks.

In contrast, Market of Choice’s offer is “30 percent below market value.

“If someone offered us 30 percent below market value for our houses, we wouldn’t be jumping up and down,” he said.

Furthermore, “Market of Choice focuses on larger stores. This is an experiment for them. … their only smaller market failed.”

To Food Front members in March, Shvarts would not concede that Market of Choice would likely open a store sooner and with more surety than the Skylab partnership.

Board Treasurer Sanela Ruznic, recently using Fusionary as a surname, fully supports Shvarts’ way of thinking.

“We don’t have any say in the Market of Choice option if we sell,” she wrote. “We are looking into continuing Food Front Existence.”

In the most recent survey questionnaire, Shvarts played another card. Instead of referring to the Kovel-Huffman partnership as the Skylab redevelopment plan or “community-minded redevelopment,” as in the December survey, it was listed as “Food Front market.”

Food Front will not control the plan. It may not have anything to sell in the future project. But as a naming gesture, it was shrewd. It reached for the hearts of the membership, if in name only. Allan Classen