Our 2019 investment offering to help fund our expansion ended and we came very close to our final goal of 1.1 million in owner investment. We raised over $750,000 via our preferred share offering during the capital campaign. There is more work to be done. For this expansion to move forward at the scale and scope the shoppers have told they want, we need to raise the final 350k. We have launched our second capital campaign with that goal in mind. With just a couple days into the second campaign, we have already raised $30,000!
Our overall goal to raise was 1.1 million in owner investment. Just like any other successful business, it takes significant owner investment to make any expansion happen. Our project will continue to move ahead as demolition has started and we finalize plans for the newly expanded store.
After the first capital campaign we have spent a lot of time revising the store plans, financial expectations and programs for the new co-op. With the help of National Co+op Grocers and the Development Cooperative, alongside our fabulous architects at Koch Hazard and the construction team at Fiegen Construction, we have been able to reduce the cost of the expansion by nearly half-a-million dollars. This was done through vigorous work from all partners to find cost-effective solutions that would have little to no impact on the shopping experience. We are also in the final stages of securing the bank financing that will help us complete the monetary sources to make this project go. With some help from you and our other 1,300 co-op owners we can close this gap and finally green light the rest of this expansion project. So please, click the link below to request an investment packet from our board of directors. We appreciate your kind consideration to contribute to this amazing project and look forward to celebrating a bigger, better Sioux Falls Food Co+op with you!
How big will the new store be?
The Co-op will take over the office space directly to the West, which will allow us to be the sole occupants of the building, doubling our square footage to 8,000 feet.
Are we moving?
No. You might hear casual reference to the “new store” but it’s really just an expansion of our current space. Our address will remain the same.
When’s it going to start?
Pending a successful owner investment campaign, construction is slated to begin Summer of 2020.
When will it be finished?
Great question. Construction is projected to take approximately four months, with some work ongoing inside the store after the main construction is finished.
Will the store be closed during construction?
No. The store will remain operable throughout the process. We will begin remodeling the half of the building we currently do not occupy, move operation into the newly remodeled space, and remodel the old store space.
What departments are expanding?
All areas of the store will see improvements, with a focus on fresh departments and deli. Our goal is to meet the demands of Co-op owners and shoppers that have told us they want more deli options, indoor seating, expanded selections in meat, dairy and alternatives. Providing a shopping experience that is both comfortable and inclusive is a priority.
Will there be indoor seating?
Yes. We are very excited to be able to add the indoor seating to provide a comfortable and welcoming place to enjoy our expanded deli options, in response to our owners’ and shoppers’ requests!
What sustainability measures are being incorporated into the process?
Just like the original remodel of our current space, there will be a focus on energy efficiency on all new and existing equipment, LED lighting throughout the entire building and HVAC systems that reduce energy use as much as possible. All salvageable materials in the expanded space will be reused or donated to Habitat for Humanity. Improving the backroom and receiving areas to allow for efficient product movement will also help reduce energy use by minimizing the amount of time cooler and exterior doors remain open.
How can I get involved?
Co-op owners have the opportunity to invest in the Co-op by purchasing equity in the form of Preferred Shares. This is a great and transparent way to invest your dollars directly into your local community. You can also get involved by spreading the word about our expansion and owner investment campaign, and of course, by continuing to shop at the Co-op!
PREFERRED SHARE FAQ
What is a Preferred Share?
Preferred Shares are dividend-bearing investments in the Co-op’s equity. They differ from the $200 owner equity payment required of every Co-op owner in the following ways:
- Preferred Shares do not have specified repayment terms
- Preferred Shares pay a dividend based on the size of the investment and not on the amount of purchases made at the Co-op
- Preferred Shares purchases are optional investments made at each owner’s discretion—no owner is required to purchase preferred shares as a condition of membership in the Co-op.
- Preferred Shares carry no voting rights
How long will my money be invested in the Co-op?
Preferred Shares must be considered a long-term, non-liquid investment. Redemption is at the discretion of the Board of Directors. Plan to invest for a minimum of 5 years.
What is the interest rate?
The interest rate on Preferred Shares is 2.5% or 4%, depending on the amount and type of shares purchased. The Co-op Board of Directors has guaranteed dividends to be paid annually.
Why is the Co-op offering Preferred Shares?
This offering provides owners the opportunity to invest funds in our local business while earning a fair return on their investment. They are being offered at this time to help finance the Co-op’s 8,000 sq. ft. expansion. The amount raised through the sale of Preferred Shares will reduce our need to borrow money for expansion from financial institutions.
What are the risks of this investment?
The Preferred Shares that the Co-op is offering for sale are not insured and, like nearly all investments, have an element of risk. By purchasing these shares you are making a good faith investment in the Co-op. You should read carefully the entirety of the Investor Packet, including the section entitled “Disclosure of Risks” and consult with your own financial or legal counselor, accountant, or business advisor.
What is the benefit of my investment to the Co-op?
Shareholders will have the opportunity to invest locally, know how their money is being used, and earn a better rate than a similar-sized investment is likely to provide. The Co-op will have the benefit of using additional funds for expansion without having a fixed repayment schedule.
How do I learn more about the specific details of the offering?
Prior to purchase you will be given an Investor Packet that provides detailed background on the Co-op’s plans, its financial history and financial projections that will allow you to determine if making an investment in these shares is appropriate for you. To request an Investment Packet, please email email@example.com, or pick one up next time you are in the store.
How do I purchase the Preferred Shares?
Two requirements must be met for you to purchase Preferred Shares:
- You must be a Co-op owner
- You must be a South Dakota resident
After reviewing the Investor Packet, complete and sign the Agreement to Purchase Class C and E-shares, and return with your payment information to the Co-op. Once your share purchase has been processed, you will receive confirmation.