WFC Expansion Notice/Ballot 2016

WFC Expansion QA1 2016

A:     Please send any questions you have about the Co-op’s plan to purchase 87 Church Street using the form on our Contact page.   All questions will be collected each Monday, and an answer posted by Wednesday morning.


Expansion Board Feedback

Q. Please provide a site plan (2 people want that)
A. We don’t have one at this time. There are no drawings of the property and we haven’t gotten back the report from the structural engineer yet. That report should give us a drawing of the property, and then we can go from there to create a site plan.

Q. I don’t want to “cramp the style” of CLiCK as we use a commercial kitchen on sight here.
A. Our kitchen would be used to cook food for sale at the coop. We would not be leasing it to other businesses to act as an incubator. We might have some potential overlap with cooking classes. We are very supportive of CliCK. In the past we have loaned money, assisted with accounting and supported several businesses that work out of that kitchen. We don’t see this changing because we have a commercial kitchen on site.

Q. Write a check. Buy the property. Move-on. Change is GOOD.
A. OK!

Q. I’ve heard it’s a “brownfield” site? Won’t that add greatly to the cost if it is true?
Grow veggies in winter on the “vertical form” concept.

A. We have heard many stories of contamination at that site, so we have done a Phase I Environmental Study, which didn’t show any particular areas of concern. We are now having a Phase II Environmental Study done, to ensure (as much as we can) that if there is contamination we know it. In light of Willimantic’s age and earlier industrial base, some level of industrial waste or contamination is possible, even likely, on any available land in town. If we find contamination that requires prohibitively expensive clean up, we can withdraw our offer.

Q. I hope that you will provide more details such as price and feasibility well before the meeting. Has a feasibility study been done?
A. We have contracted with CDS – Cooperative Development Services Coop to do a Pro Forma for the project. We worked with them on the project to move to our current store. We expect to have it soon. We are also looking at the possibility of a feasibility study.

Q. If the Co-op expands across the street what is the parking situation and the visibility when exiting the parking area? Expanding the Business usually creates a need for more parking.
A. We are not yet sure how we will use the open area around the building although it has potential for parking. If we were to use it for that purpose, the block walls surrounding the property would be removed making visibility adequate.

Q. That building was bought in 2012 for 72,000 at the town tax auction. Nothing has been done to renovate this building. Why are we willing to by it for 299,000? Has anything been done to increase the value of the property in the last 4 years?
A. The $72,000 paid at auction does not reflect the value of the property. The property was last assessed in 2013 for $302,300. If we had bid on it at the auction, perhaps we could have bought it for that price.

Q. I hope you are not looking into a future that does not exist, like NE Co-operatives did…..
I love you guys.

A. Although we don’t have a crystal ball, we do know that the Co-op has grown slowly and steadily. We believe that our last 5 years of profitability and increased sales growth speaks highly of the Co-op’s potential.

Q. What information on the building to be purchased is available from the Fire Marshal inspections of the property? The inspections are required to be performed and all fire and life safety issues identified.
A. There is virtually no information on the building. Our plan is to gut it and renovate the interior. All work would be performed by licensed contractors and subject to getting a certificate of occupancy from the town which would include the fire department, building department and health department. Additionally, we want the property to be energy efficient and healthy for all people working in the building.

Q. What are the safety concerns that you speak of?
A. As the volume of food that the Co-op handles each day increases, and the number of staff increases, and the physical space of the Co-op does not, our workspace shrinks! The tighter quarters makes it harder for our staff to move around heavy boxes as they are receiving and stocking orders and has potential to cause injuries, particularly back injuries. There are more things to trip over as deliveries grow and space does not. There is less and less storage space as well. We don’t have concerns about the safety of shopping in the store – while there are more stocking carts moving through, our aisles are wide enough to accommodate them along with shopping carts.

Q. Prices are too high. Could someone explain why we are not lowering prices. Why spend more?
A. Prices are a function of volumes, and low-volume stores (like ours) generally have higher prices than large chains are able to negotiate. And most foods produced and sold through conventional stores are a product of food production systems that have high environmental impact (pesticides, herbicides, greenhouse gas intensive) and typically use poor labor and employment practices.
Prices are also a function of quality. Food quality is generally thought of as the nutritional quality, However, there are other aspects of quality. These may include ecological and societal values. Food co-ops exist to address these. Maybe not with every item in the store, but compared to conventional groceries, co-ops have higher-quality (in all aspects) items. It costs more to not pollute and not pay slave wages.
While natural and organic foods are inherently more expensive than conventional products, the Co-op is also committed to paying fair prices to our producers (local to global) and paying our staff a living wage. Balancing these goals with affordable, competitive prices and the ability to pay our operating expenses is challenging, especially in an increasingly competitive marketplace.
That said, we are actually lowering prices as well. Over the past three years we’ve systematically lowered prices throughout the store with the goal of offering more high-quality food at more affordable cost. With the support of several of our producers and manufacturers, we’ve lowered prices on staple food items in every category, under the “Co+op Basics” banner (look for the purple shelf signs), on everything from local milk to organic peanut butter to toilet paper.
The Co-op is committed to continue finding ways to operate on lower margins without sacrificing the quality of the products and services we offer. We don’t foresee that any expansion of the Co-op will interfere with our commitment or ability to continue lowering prices and making good food accessible to more people.

Q. Buy lower priced property in Windham. Build new. Maybe S. Windham. Change Co-op name to Windham Co-op. Why not?
A. Building new is typically cheaper, unless a great deal on an existing building with all the right facilities for a grocery is available. However building new is generally not an ecological practice. (There are exceptions.) The proposed project has a very low overall cost, i.e. including all parts of the project, not just the property. It also allows an incremental approach and it provides an immediate solution to the highest priority issue facing the Co-op at this time; office and backspace. As further expansion is considered, so will the cost and economic feasibility for the Co-op operations.
Our 2015 market study recommended that the Co-op relocate to “a larger facility (with adequate parking, visibility, and ingress/egress) near the intersection of US Route 6 and State Route 195 (Storrs Road), as a store in this area would benefit from favorable regional access, good retail synergy, and greater proximity to the “in-profile” trade area residents that live along the US Route 6 corridor (i.e., Mansfield Center, southern Storrs-Mansfield, and Hampton),” in order to realize our full sales potential.
Other towns and areas have also been proposed, and additional store locations may come up for discussion in the future. However, throughout the years, discussions with members about expansion and relocation possibilities have always led us back to our home in downtown Willimantic – our identity and connections to the community are based on being a downtown neighbor. Since our primary commitment is to serving our members and our community, rather than maximizing sales and profits, we believe that putting down deeper roots in the neighborhood we grew up in is our natural next step.

Q. Can we have pictures to see before we vote?
A. We could photograph the outside easily (or you could peer through the fence) but the inside of the building is unlit and needs to be cleared of junk. As the initial plan is to gut the interior and remodel it, and long-term plans have yet to be defined (including whether the building will be replaced), the current appearance of the property is not of great importance to the purchase. We are primarily investing in the land and location.

Q. Would members be involved in renovations to lower costs?
A. Yes! Work parties!

Q. What will the yearly interest and principal payments be on the loans that would be necessary to renovate the Coal and Lumber building? Let’s say a loan of one million dollars. How much profit can the Co-op expect it will be able to use for these payments each year?
A. We don’t have the final pro forma that will map out how much money we need and where it will come from. Where we get the money will be a factor as the interest rates will vary. For our last move, members loaned the Co-op over $200,000 at interest rates ranging from 0% – 3%, as well as donating over $50,000. We repaid all of the loans before they were due. We also borrowed from the Savings Institute and the Coop Fund of New England – both at higher rates than the member loans. We have very good credit and should have lots of options so that we can minimize our interest expense.

Just as a point of reference, the payment on $1 million at 4% for 20 years would be $6,060. At 3% it would be $5,550.

Q. Regarding the expansion: Has anyone looked into the purchase / lease of the building across Church street (109 Valley) as it is currently unused, already has a commercial kitchen, room for office / meeting space and existing parking? Keeping the grocery division in its current location and creating the retail / café unit in the new space.
A. That property was sold at a tax auction a few months ago and is now being renovated and leased.

Q. Why have voting time so restricted. 7,000 or so members. If only a fraction show up, it will be a crowd. Also some folks can’t make it at that time. How about a greatly expanded voting period to maximize democratic participation?
Q. Good Morning- I’m very excited to hear about the possible co-op expansion! Will there be an absentee vote for people that aren’t able to attend the meeting? Thank you!
A. Yes, many members have requested mail in ballots and the Board voted to make that happen. Everyone should get instructions either emailed or mailed to them in the next few days and ballots will be available on line and at the store. All ballots will be counted at the meeting on November 6th, 6:30 pm at the Co-op.

Q. Has there been an inspection of the building and the results taken into consideration for the purchase price?
A. We did get a report on the building from a structural engineer and we are working now on getting estimates to do the necessary repairs. The cost of these repairs will be taken into consideration before we are done with our due diligence period.

Q. In regards to the possible expansion…
1. If the co-op does expand across the street, would the retail store actually increase shelf space at all? It seems that due to the structural layout of the current building with the location of the coolers and bathrooms that there would be limited space to expand areas of service. What are the expected costs associated with any renovation in the current store?

A. You are right, there is not a lot of room to expand the shelf space. We will improve efficiency with more work room in the non-retail floor space. We can also increase room to sell prepared foods – possibly from our own kitchen.
2. Is the old movie theater an option for relocation?
A. We have looked into this building but could not come to an agreement with the owner on a price. It also was looking to be a project that would have cost somewhere around $7 million, not something I think we are quite ready for.
3. It is concerning that an expansion into 87 Church St would require a constant back-and-forth across the street. This does not seem terribly efficient as far as moving products or even creating duplicate services. How do you plan to address this issue?
A. The goal is to minimize movement of product across the street – using it primarily to store items. We will be able to generate savings by buying much larger quantities that we do now. Moving some of the Administrative staff will increase efficiency by having uninterrupted work time. Staff will have an actual break room. This use of the additional space would improve operations and minimize back and forth between buildings.

Q. The renovation costs listed at 1.5 million dollars seems difficult to justify when new construction provides more flexibility, energy efficient opportunities and the ability to make it “ours” rather than a renovated lumber yard – please don’t let the ideas of ecological practices hold you back from creating a flagship location to be proud of.
A. The budget for the actual renovation of the existing building is $350,000. The 1.5 million includes the property purchase, equipping a kitchen, some renovations in our current store, as well as replacing some equipment. We had looked into creating that flagship location you may be envisioning, and the price tag to do that was approximately $7 million including all of the equipment and inventory for an 11,000 square foot store.
While we didn’t feel ready for that big of a project at this time, building a new building on the 87 Church Street site will be possible when the membership feels that it is the right time.

Q. As a lifetime member I have heard many complaints increasing over the years that people do not feel well in the building. Most believe it is because it is old and subject to mold and allergens. I myself have minimized my shopping there due to not feeling well when there. I would be very discouraged to see another old building. So much money is spent to bring in quality food and products only to have it possibly contaminated by a bad environment. I would suggest saving money for a cleaner newer location. It will attract many more customers who feel the current location is too old already. I would also ask in the next location that lighting be addressed to reduce the fluorescents and keep bright lights under shades or globes for those older with photosensitivity.
A. It is true that our building is old, as are most buildings in Willimantic. When we moved here, we gutted the entire space and replaced virtually everything. Could there still be allergens? Possibly. Are people reacting to the new materials? Possibly. In our renovation of 87 Church, we will also replace virtually everything, and keep these concerns in mind, using materials that are as ‘green’ as possible. All of the staff that work at the Coop and spend a considerable amount of time in the building are important to us and we do not want to compromise anyone’s health, including all of you that shop at the Coop. Nor do we want any contamination of the products that we sell.
All of the lighting at the store was switched to LED lights a year or so ago.

Q. Today is Saturday. Jillson Square parking lot is full due to a wedding at the church. Please describe the parking situation for the new location. My understanding is that the town owns it.
A. Yes, it is true that the town owns all of the parking next to Jillson Square. The Coop regularly uses that lot for staff parking and very busy days like the Birthday Party. Currently we don’t see any need for additional parking associated with the new location as it will be primarily used for staff offices and potentially a kitchen that requires minimal staffing. It is rare that the lot is full – that must have been one big wedding!

Q. Will we be able to stock all of the items in the Co-op Deals Flyer with more space?
A. That is hard to say. Not all of the products in the flyer are available to us, and some have consistently not sold well in our store. We are always happy to special order cases (usually 6 or 12 per case) if it is a product we can get, and you would get 15% off of the sale price!

Q. Why create overlap/compete with CLiCK as opposed to co-operating?
A. As previously said, we do not intend to compete with CLiCK. CLiCK’s mission is to enable “local entrepreneurs to incubate small businesses that can be locally sourced… by making local food processing and business incubation a reality for those who might not be able to afford their own commercial kitchen / restaurant” and “to provide local farmers a place to process their goods so as to add value to their raw materials.” Their facilities provide a commercially-licensed kitchen geared towards pay-as-you-go, on-demand use. The Co-op does not expect to offer this type of service, and can afford its own commercial kitchen.
The Co-op’s kitchen needs are also in key respects incompatible with CLiCK’s goals, and could even be damaging to them. To provide the services our members have asked for, the Co-op needs daily and flexible use of a kitchen, not support for intermittent batch processing and packaging. If we were to use CLiCK’s facilities in a way that met the Co-op’s needs, we would be preventing their use by the very people CLiCK primarily formed to serve: those who cannot afford to establish their own kitchen while in a start-up phase, or need only occasional use. On the other hand, if we adapt our schedule to allow CLiCK the flexibility to meet entrepreneurs’ needs, then we cannot be sure of having the consistent product supply needed to sustain our cooperative.
We therefore expect to continue supporting CLiCK as we have done in the past, and welcome the possibility that we could serve as a way for those making use of CLiCK to sell their products.