Co-ops boosting retail on Central Avenue in northeast Minneapolis

The hipster trifecta of bikes, artisanal bread and beer is headed for Central Avenue in northeast Minneapolis, all thanks to a long-nurtured co-op movement that's gaining momentum.

Not only is the developer a co-op but the brewery with taproom that will open there is also a co-op that beer drinkers can pay $200 to join.

The trio of businesses — one already operating and two more following soon — are starting to reshape the block just north of the traditional retail hub of northeast Minneapolis, Lowry and Central Avenues.

Dan Nordley, a small-business owner who is also a leader in the cooperative movement that has deep roots in Minnesota history, said the success on Central is positive across many fronts.

"Too much business is disproportionately driven by people who just want to make money on money," he said. "This one is more about providing goods and services to a community that needs it for its general livelihood."

Co-ops already have set up shop in two other buildings in the area. The first was a co-op grocery, Eastside Food, that opened 10 years ago this week and now boasts 4,475 members. In 2011, some of its members formed Northeast Investment Cooperative (NEIC) to buy, rehab and manage commercial property. It's now filling its first building at 2504-06 Central.

Recovery Bike Shop, which formerly leased from the food co-op, shifted last summer from that space to 2504 Central. It bought that storefront in a deal brokered by the investment co-op. That cooperative simultaneously bought the adjoining 2506 storefront. It now has now leased that space to a bakery and the start-up brewery co-op. Those tenants aim to open next year.

The brewery, which plans yet another in Northeast's expanding network of taprooms, is a novel approach because it was founded as a cooperative. The baker got his start selling to farmers markets.

With the bike shop's move, the grocery co-op that started it all hopes to start construction next summer on an expansion to fully occupy its 12,000-square-foot building at 2551 Central.

"It's all going to be a healthier, more sustainable community," said Nordley, who just stepped down from a long stint on the Seward Community Co-op's board and runs a network for co-op grocers.

Building on history

Co-op begetting co-op is nothing new in Minnesota, noted Kevin Edberg, national director of Cooperative Development Services, a St. Paul-based nonprofit that advises would-be and expanding co-ops. Farmers who banded together to form grain elevator or dairy co-ops across the Upper Midwest then took the next step of forming bigger co-ops to market their products or buy supplies. Land O'Lakes and another ag giant now known as CHS Inc are two examples. Credit union leaders were key in the formation of member-owned Group Health, now Health Partners. Cooperation among cooperatives is a cherished principle among co-op activists.

Yet the investment co-op launched without a template in this country to use in pursuing small-scale community development in an urban setting. It knew only of another small-scale effort in rural Alberta.

The investment co-op was initially capitalized with a hefty upfront investment of $1,000 per member, far more than the food co-op's $100 membership. The investment co-op has 173 members, more than double a year ago, and they've invested $230,000 as some invested optional additional capital. The cumulative investment by the co-op and those occupying the twin storefronts is projected at more than $750,000.

'The right place to be'

The project was a godsend for Brent Fuqua, co-owner of the bike shop, who knew he'd have to leave the building he shared with the food co-op at the end of his three-year lease. He's more than doubled the amount of showroom space for bikes, and has thousands of square feet more to store bikes he had squirreled in rented garages around the area.

"It's gone great," said Fuqua, who said he's almost relieved that the slower season for bike sales and repair has arrived after the store was mobbed during its Aug. 1 grand opening. "It's really something to stand back and look at it and say, 'holy cow!' "

He's also happy that his new tenants sound like sustainable businesses. One is Joachim Berndt of Maple Grove, a former architect who started his bread business four years ago baking in a church kitchen. He specializes in hard rolls, crusty breads, ryes, sourdough and pretzels, and hopes to open his Aki's BreadHaus by February, while continuing to sell at farmers markets.

Meanwhile, Fair State Brewing Cooperative is shooting for a May opening. It has enlisted 140 members at $200 apiece, and also has recruited additional nonmember investors to raise $225,000 for equipment and improvements. "For us, it felt like the right place to be," said D. Evan Sallee, the co-op's chief executive. "The network of support that NEIC was able to provide was very capable."

Steve Brandt • 612-673-4438

Twitter: @brandtstrib