By Brandon Kane, General Manager
I was reviewing our West End campus expansion recently, and I was struck by how much we have collectively accomplished over the past 12 months. In this short period of time, we’ve gone from identifying a new home for the West End to now being on the cusp of starting construction. All the stakeholders have worked tirelessly to put the pieces in place so our owners could make informed decisions as to the future of our cooperative enterprise. The vote to approve our expansion proposal overwhelmingly passed with 93 percent in favor. And now, with construction scheduled for this fall, your co-op is issuing another call to action to make this project happen.
The business plan for our West End expansion is based on our leasing the premises for ten years, after which we will purchase the store, property, and all assets therein. While the spring vote approved our ability to enter into a lease, it did not approve our purchase of the property at the end of the 10-year lease term. We need our owners to vote to approve this purchase in order for the lease to be valid and construction on the new store to commence. Construction must start by October 2018, or we risk not having a new home before our present West End lease expires in December 2019.
As a result of these critical dates fast approaching, GreenStar will be holding a special owner vote this summer on the purchase of our new store in 2029. Owners will be asked to vote on the question, “Should GreenStar Council be authorized to purchase 750/770 Cascadilla Street (our new West End store) after its first lease term?”
This might be the most critical vote in our cooperative’s history, and I encourage you to look for the voting details as they emerge over July and August.
The details of the purchase, including the cost and impact on GreenStar’s financials, will be shared with all owners so you can again make as informed a vote as possible. Here, I’ll give a brief overview of the concept.
GreenStar will lease our new premises for a ten-year term from November 2019 through December 2029. Throughout this term, we will be paying down our loan financing, paying owners dividends on their purchase of Investment Shares, distributing patronage refunds to our shopping owners, and saving for a down payment for the purchase of the store and premises. As of year ten, we will have paid off the majority of the balance from our owner investors’ Investment Shares.
At this point, we would purchase the premises and effectively assume ownership over our West End operations. Imagine your co-op having the ability to own over 80 percent of its revenue-generating property! This is a stark comparison to our present ownership of only 10 percent.
As an owner of the Co-op, you will be provided with all the relevant materials needed to make a decision. I can say with confidence that the asking price for the purchase is fair and the purchase will likely result in lowering our operating costs compared to leasing the store.
A critical component of our voting process is the publishing of Pro and Con statements, if willing owners are found to draft an opinion. If you’re interested in drafting a Pro or Con statement, please see the announcement on page 4. The statements should be specifically related to whether you think we should purchase the new West End premises and why or why not.
As someone on the inside of this project from the start, I can say unequivocally that the purchase of our store is the right move for our future. Of course, I hope you agree. Please be on the lookout for more information on this expansion vote in the next few weeks in our stores, online, and in email updates.
Thank you for another great month of cooperation! Owner Appreciation Days were quite successful, and we look forward to bringing you more value for your ownership. We are doing great things together. Thanks for reading!