Buffalo Mountain Coop is Moving and Growing!
*Answers to some questions may change during the course of the campaign*
Q Where is the Co-op moving to?
A We will be purchasing the Hardwick Village Market at 75 Mill St. in downtown Hardwick VT.
Q When are you moving?
A There are many factors which will affect our potential move date, the progress of this capital campaign being one of them. For a while we’ll be open at both locations, and we are hoping to be completely in the new location as soon as Spring – early Summer 2022.
Q Why is the Coop moving?
A The Coop would need to make renovations and improvements to its current building in order to increase operational efficiencies – but even with those improvements, it is limited by the size and configuration of this building. Instead of investing more in this building, we aim to invest in the Hardwick Village Market building and in turn sell this building. It’s a better use of our capital, and will create better long-term solutions for improving parking, store accessibility, ease of deliveries, storage, expanding our customer base and food selection, and helping grow our business and our community. Also, the Hardwick Village Market has been for sale, and the BMC is the ideal business to move in to keep and grow a walkable grocery option in our downtown.
Q What is a Member-Owner / Community Loan?
Co-op’s nation-wide use Member-Owner and Community Loans to help raise capital for starting, moving, renovating and expanding. Co-op’s (especially well-established ones) have very high rates of paying back all loans on time. It’s a way for members to support a local business, invest locally, create local jobs, and receive a return on their investment.
All Vermont residents are invited to invest in the Buffalo Mountain Coop. Loans start at $1,500, and up to $9,999.99 loans earn 1% interest. $10,000 – $49,999.99 loans earn 1.5% interest. Loans greater than $50,000 earn 2% interest. We have term lengths of 7, 10, 13, and 16 years available, and investors may select and must spread out across the terms. Accrued interest shall be paid annually, on or before December 31 of each year starting in 2022. All accrued interest and outstanding principal will be due and payable together on the Maturity Date. (eg. 7 years = 12/31/2029; 10 yrs = 12/31/2032; 13 yrs = 12/31/2035; 16 yrs = 12/31/2038). You must qualify to lend more than $10,000, and qualification details can be found on page 18-19 of the Offering Memorandum. Every investor will be sent and shall read the full offering memorandum to understand the risks and details of their loan.
Q Isn’t my ownership (equity payment) enough? Why is a member-owner loan needed?
A The co-op needs $500,000 for the purchase of the Hardwick Village Market (HVM) store and for renovations and improvements. Funds will come from multiple sources, including member-owner loans, grants, donations, and outside bank loans. Member-owner loan programs are long-standing methods used by co-ops to raise money and community support for their stores. They demonstrate the existence of a loyal customer base and provide local financing to make our Coop stronger and make this move possible. The financing offered through member-owner loans provides better terms (payback times and interest rates) than our outside bank loans (currently at 3.5% and 4.72%) alone.
Q How will this move affect the Co-op/ the Village Market?
A We are working hard to make sure the combined store will be a better version of both the Co-op and the Village Market. We’ll have more product choice than either store had on their own, and we’ll still be friendly, funky and locally owned! Making small changes to the HVM store layout will provide space to sell most of the HVM’s products, all of ours, and have room for more.
Q $500,000 is a lot of money to raise—why so much?
A There are a lot of expenses to purchasing and relocating a grocery store. Renovations will cost a lot, not because it’s going to be fancy – but because renovations will enable the store to hold a lot more product options on its shelves; be clean and accessible with a bathroom on the first floor; have room for a small café; and space to move around. We’re going to become a one-stop-shop for the whole community. If you would like a more detailed financial breakdown, please review the Offering Memorandum or Financial Reports available under “Additional Resources” on our Move page.
Q What is this money being used for?
A The money will be used for purchasing and improving the Village Market and eventually moving the Co-op. Design, renovations, upgrades, legal, consulting, administrative, mailings/copying, new equipment, new inventory, staff training, operating capital….. there is more info in the Investment Packet. Your investments will help us pay for local contractors, purchasing more products from local farmers and vendors, and growing our local economy.
Q What will the Coop do with my money until you go ahead with the project?
A We are holding it in a separate account from our operational (day-to-day) funds. When we’ve reached $250,000 we will start using the funds for the improvements and relocation.
Q What happens if we don’t raise enough?
A If we don’t raise enough money from the member-owners, we will have to use more costly and less local bank financing. Renovations for accessibility and food access will be down-sized to fit a reduced budget. But we think we’ll reach the goal if you will help!
Q Do you think you will be able to raise this much money?
A Yes. Co-ops around the country have been raising money from their member-owners in order to expand, relocate, or build new stores. We think our member-owners will be motivated to invest to get a bigger, better co-op and earn some interest too! We are also getting help from experts on raising this money and we have a strong team of volunteers to help. Do you want to volunteer to help us?
Q I want to do something, but I don’t have the minimum loan amount!
A There are a number of ways for you to participate:
- You already participate by being a member-owner and paying your equity share. If you have not paid your share in full, it is very helpful if you finish that during our capital campaign.
- Talk with your friends and neighbors! Telling everyone you know that we need their help to get our store moved and renovated would be a big help! Have them call or email the co-op for more information or if you’d like to give me their name and # I’ll call them myself.
- Spend as much of your food budget at the co-op as you can, and tell your friends to too!
Unfortunately, we have very little time to secure the financing and move forward, and if we lowered the minimum, it would take us much longer to raise the money.
Q Are you using sustainable and green building practices?
A We intend to, as much as our budget will allow.
Q Can’t I donate?
A There are ways, with certain restrictions, for you to make charitable donations that will be used for this project. We can send you the donation information for the non-profit that is serving as our fiscal sponsor for tax deductible contributions.
Q Do I have to take a packet? I don’t want all that paper!
A Yes, we are legally required to give you the detailed information and risks involved in loaning money. Once you have looked it over, you can return it and we can re-use most of it. (Same for those who do not make a loan—they can turn it in and it can be re-used.) We can also email it to you.
Q I live in [another state], can I make a loan or donate?
A Unfortunately, loans are legally restricted to Vermont residents. Talk with us about making a tax-deductible contribution today. Email us at CapitalCampaign@BuffaloMountainCoop.org.
Q I want to do what is best for the co-op. What should I loan?
A Loan the most your family can afford. Obviously, larger loans help us most, and we are looking for an average size loan of $5,000.
Q How many loans are available for each 7, 10, 13 & 16 year term? How will the terms be distributed to ensure the Co-op can pay back loans successfully?
Investors choose their preferred term length in the beginning, and we expect investors will naturally spread across all four term options. We will be tracking how many lenders choose which term lengths, and how loan amounts distribute across the different terms, to best ensure the Co-op will be able to pay back loans across the four terms. We may start to limit term availability for certain size loans as necessary.
Q What happens to my loan if I die?
A Your loan is part of your estate and is treated like the rest of your assets. Consult with your financial advisors or an attorney about how your assets will be distributed if you die.
Q What happens if I need the money back early?
A You should not expect to get the money back early. You can contact the Board should you have an extreme circumstance, but the loan repayment schedule is based on expected performance of the co-op and has been carefully planned.
Q What happens to your loan or donation if the Hardwick Village Market acquisition falls through?
A First, it is unlikely this acquisition would fall through, but, like anything in real estate, that remote possibility exists. We believe it’s an unlikely scenario because we have a year of solid planning behind the move, the P&S agreement is fully executed, we have bank loans already lined up, and we have outstanding early support for our capital campaign. So, it is most likely this acquisition will be completed in March, on schedule!
If the unexpected were to happen, we would reach out to each and every donor and lender and inquire how you would like to proceed. Your choices would be: A. we return the donation / loan in full within 30 days, (minus any small processing fees, if applicable), or B. we return the donation / loan over an extended time frame (ie. 6 months) to help us cover the initial costs we have invested in the exploration and planning for this move, or C. for those wishing to help us offset the costs of our market feasibility study and move planning, and those wishing to keep any tax benefits from their tax-deductible contributions, we would offer to keep your donation as a meaningful monetary support for all the effort and output of the move planning thus far. You would have full discretion to choose whichever choice is best for you.
Q What will the combined store be like?
A We will be 3 times bigger! Although modest by conventional grocery store standards, this is big enough to be a complete grocery store while also being personal and easy to shop! The new market renovations will create a clean, accessible, and inviting shopping place for everyone in our community.
Q How do I know how much return I can earn?
A We can review the interest rates (1 – 2%) that different loan amounts qualify for ($1,500 – $100,000+) These are good rates and they are investments in something you know, trust and use. All the money loaned goes to the project and our local economy, not to supporting a brokerage or distant companies like conventional investments.
Q How will this store benefit the community?
A Our store will provide additional jobs and tax revenues, provide opportunities for more local farmers and vendors to offer a wide variety of the freshest and highest quality food, and serve as a model for other cooperative businesses. We aim to become Hardwick’s Market of Choice – creating more community cohesion and greater food access to our loyal and new customers.
Q How will staff benefit?
A Careful financial projections show we can increase Co-op revenues by offering more diverse products and serving more customers. When we meet our targets, we plan to offer more benefits and increase wages for all staff. We want to provide sustainable jobs for our community, and this move is a step in the right direction.
Q Will the store be more expensive than the Village Market?
A We don’t see any reason for prices to increase due to this move. In fact, through purchasing more, we may be able to decrease our prices. Our management and staff will work very hard to make sure our store is competitively priced.
In some cases, food that is grown, cooked or baked with better ingredients and with better methods does cost more. We think the great taste and the benefits to your health and the health of our farmers and earth make these costs worthwhile. Conventional products will continue to be offered at the same current price / going rate.
Do you have additional Questions or Comments?
Please contact Lydia Parker at CapitalCampaign@buffalomountaincoop.org
We will respond shortly, and make your questions and answers available here.