From March-April 2010
Linden Hills Co-op
Minneapolis, Minnesota
Year founded: 1976
Number of members: 5,200
Equity investment: $80 per household
Number of staff: 75
Current retail square footage: 5,300
New retail square footage: 7,800
Relocation costs: $3.5 million
Member loans raised: $1.5 million
The Linden Hills Co-op is located in one of the most livable and bucolic neighborhoods in Minneapolis. Geographically bounded by lakes and parks, the area has miles of hiking and biking trails, and is well-known for a walk able, attractive retail district that makes the urban neighborhood feel like a small town. Throughout the years of the co-op’s existence, the co-op has been an anchor in that district and community, creating synergy with other independent businesses.
Like a lot of food co-ops, Linden Hills battled the need for more parking and retail space, and began a search for a larger location. In late 2009, the co-op board approved a move for the food co-op away from the established Linden Hills retail district in order to relocate on a main artery less than a mile away. The co-op will open at the new location they are leasing in the fall of this year. The timeline for the move is admittedly ambitious, and as part of that, the co-op needed to raise $1.5 million from its members in 90 days in order to secure financing for the relocation. A few people were nervous that it would be impossible given the timing—the member loan campaign was launched going into the holiday season, in a recession.
“We had a phenomenal response,” said Luke Schell, the co-op’s general manager, about the membership’s participation. “We knew we wouldn’t be able to get financing without securing stated member loan goals. Even our new landlord required that we hit certain thresholds.”
In order to meet those goals, Schell worked with Tami Bauers of CDS Consulting Co-op on how to execute a successful member loan campaign. “Securing someone with experience made us feel more comfortable. She was so positive right from the beginning that we could do this,” Schell said.
As part of their fundraising plans, the co-op looked at all the ways it could quickly raise awareness of the loan campaign and how it could give members the opportunity to provide capital. A big part of that was using media—mainstream print as well as social media (Facebook and Twitter) gave Linden Hills Co-op excellent PR, and a multi-pronged platform to reach members and the general public. They also did a mailing to every member, implemented a calling bank, and held public meetings.
This isn’t to say everything went without a hitch. Some members disagreed with the co-op’s move and held their own public meeting to refute it. It was challenging, but Schell said they did all they could to “handle it diplomatically and professionally.” Ultimately, the co-op was able to gain their trust, and some are now even considering making loans.
The board was also integral to the member loan process. They were very hands-on regarding talking with people—through the calling bank, doing info tables in the store and meeting one-on-one with members. The board certainly went beyond expectations, resulting in strong financial support for the project, but in hindsight they were still left wondering how they could create a stronger link to members that might have prevented the conflict with members unhappy about the move.
Schell was able to find enthusiastic lenders for the project, including loans from a local bank, Northcountry Cooperative Development Fund and the City of Minneapolis. Schell also thinks that because of the economic downturn, he was able to find assistance for the project from individuals and firms who would otherwise have been unavailable or out of reach. “We’ve got a good location and a nice design,” Schell said. “We’ve been pretty excited about the opportunity to thrive and grow.”
Associated Services:
Featured Consultant:
