The North-eastern Investment Co-operative in Minneapolis has brought back local bakers and brewers to the community.
3 mins to read
Suffering from long term disinvestment, distant landlords, and revolving-door retailers, Central Avenue, in North-east Minneapolis,, looked like many US and European shopping high streets after the 2008 crash – a long line of empty store fronts.
Concerned by empty pavements and lack of community, local residents took action and started the East Side Food Co-operative Grocery Store, which now has over 4,000 members. Intending to rejuvenate other properties on Central Avenue, co-op members set-up an investment cooperative. Their big idea was refurbishing vacant retail properties near the popular co-op grocery, and finding tenants whose businesses would benefit the community.
As the North-eastern Investment Co-operative (NEIC) (see http://neic.coop/wp-content/uploads/2015/03/NEIC-Presentation-for-Web-03.01.15.pdf) the group found their first property. Half the space was immediately sold to the thriving bicycle shop sharing a lease at the grocery store, Recovery Bicycles. Sales increased in their new premises by 20% in the first year, and their purchase provided the necessary funds to refurbish the rest of the building. Refurbishment uncovered beautiful original brick and historic hardwood floors, which are on display.
The co-operative team then advertised on the internet on social media and created a slick YouTube video, for prospective businesses with similar long-term views about community, to lease space. Aki’s BreadHaus bakery, specialising in rustic breads, pretzels, and other German delicacies, rented some of the downstairs space, opening in 2014. Social enterprise Fair State Brewing opened soon after. It became famous for being Minnesota’s first co-operatively owned brewery.
Steve Sylvester, a founding member of the NEIC, which set the businesses up, explained that locals usually could not afford property on Central Ave. Working cooperatively, only a thousand dollars per voting share was required so NEIC proved to be an attractive and accessible investment model. Open to any Minnesota resident, this sustainable business investment has 200 members and growing.
Long-term sustainability, stabilising and transformative investments, for the mutual benefit of member-owners and the local community, are key values for NEIC. They call it “patient” capital and their intentions are long-term and supportive, and have already brought benefits for the community, including a more vibrant business and shopping district. Modest dividends and asset appreciation may happen in time, but members agree that growth is not the driver for this project.
Like villagers of old who built huge stone markets in medieval times, this co-operative is building a shared community vision for future generations. Sustainability is their focus unlike the short-term profit-focus of distant shareholders of most high-street retailers. This community focus resonates with local residents, and NEIC members have embraced the vision, investing over US$270,000 in just two years.
Local resident Leslie Watson was one of the team of volunteers who donated thousands of hours to create a website, manage meetings, project manage refurbishments, get all the official approvals and communicate with members. She explains that building refurbishment contractors were offered shares of non-voting stock, which helped the co-operative’s cash flow. Both Aki’s Breadhaus and Fair State Brewing are NEIC tenants as well as member-owners.
The model may be new, and quite rare, but useful for other communities with similar issues – mostly vacant retail districts, with a few key commercial spaces controlled by faraway landlords, or global chains who are unconcerned with local and neighbourhood needs. Investment in the local community, by local residents, is a sustainable way of growing businesses to provide specific local requirements.
Community investment cooperatives help channel local capital for local benefit. NEIC credit the creation of 25 new jobs on the Avenue, to their project, and advertise this as a strong incentive for residents to shop locally. With their retailers selling bread, beer, and cycles, as well as the inviting social space, shoppers can fulfil many of their needs in one small retail block.
In the UK, cooperatives can accept investments from SIPPs (Self-invested Personal Pension plans), and many of the necessary regulations for setting up investment coops are in place. A new Act covering all aspects of Coop legislation is under discussion.
Supportive groups like Co-operatives UK (http://www.uk.coop/our-work/select-structure-tool) provide support for selecting the correct legal structure most suited to the situation. As the necessary forms and templates are also provided, new groups need not spend all their time on legal and accounting matters. Volunteer hours can rather be used to encourage membership, generate ideas and get excited about the potential for a cooperative investment scheme.
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Photo Credit: Jula JP from flickr
- Official Website: www.neic.coop