A community investment cooperative aimed at strengthening northeast Minneapolis has signed its first purchase agreement, which could result in an expansion of the city’s smallest food co-op.
The North East Investment Cooperative announced Friday that it has signed a purchase agreement for an empty pair of storefronts at 2504-06 Central Av. NE.
It plans to rehab the smaller of the two storefronts, according to co-op Treasurer Joe Bove, but expects to immediately resell the larger to Recovery Bike Shop, which would move across Central from its present site.
Recovery rents from the Eastside Food Cooperative, and its relocation would allow the co-op to expand if the board gives the go-ahead to that in February, according to food co-op General Manager Amy Fields, who is also president of the investment co-op.
“It makes me feel like we are on the edge of this fantastic new movement for people to invest in their communities,” Fields said.
It’s just that sort of ripple effect that the investment co-op was seeking when it organized last spring. The cooperative has attracted 81 members who have invested $1,000 each in the cooperative, and announced that 27 more people have pledged to join.
The sales agreement, which calls for a closing within 90 days but is extendable, marks a milestone for the cooperative, which is following a still-evolving alternative method of community development.
Bove said the price for the former Twin Cities Marine and Hardware building is just under $300,000. After reselling the 2504 side to Recovery, the cooperative plans to invest at least $200,000 to rehab the 2506 space, most likely for rental initially, Bove said. He said bank financing is likely.
For Recovery, the pending move means a near-doubling of its current 1,700 square feet of showroom for used and new bikes in the food co-op building. Just as important, the roughly 7,000 square feet in the new space will also allow the business to consolidate the storage of bikes now squirreled in rental garages around northeast Minneapolis, according to co-owner Brent Fuqua. He said that the business has qualified for Small Business Administration financing. Its payroll fluctuates seasonally between five and 15 workers, including part-timers, he said.
Bove said the co-op’s purchase agreement also helps it seek tenants for the 4,500 square feet in the 2506 storefront. Among the businesses who have looked at the space is Urban Growler Brewing Co., whose web site says it plans to open a taproom yet this year while selling kegs to retailers. But Bove said the timing may not work to rent to the taproom. Brewery representatives couldn't be reached.
The eight-year-old food co-op, now turning a profit, is in the middle of feasibility studies for completely taking over the building it owns, which would be a 50 percent expansion of space. Such an expansion would allow the sales floor to expand from 4,100 square feet now, which is less than half that of the city’s other three food coo-ops, to at least 7,300 square feet.
Fields said the working estimate for the cost of such an expansion is $3 million, and the project would take 12 to 18 months if it goes ahead.
One reason for expanding is that only 40 percent of co-op members spend half or more of their food dollars at the store, according to co-op studies. Besides allowing a greater selection of items, and a bigger deli section, expansion into the bike space would also give the food store frontage on Central Avenue and traffic that approach 14,000 vehicles daily in 2009.