What is the RFP time-frame?
- RFP Release Date: 2/1/2018
- RFP Due Date: 4/16/2018 4:30 PM
- Village Staff Review of proposals: May 2018
- Recommendation to Economic and Community Development Committee & Village Board final selection: Summer 2018
- Development plans finalized, Village approvals, initial construction (if PFC bid selected): 1 - 1.5 years
Why didn’t PFC submit a proposal during the previous RFP for a 20K sq ft single-use grocer?
PFC would be required to partner with a developer willing to construct a new building and lease space to the co-op. The previous RFP required a developer to build the single use building and there were no developers who thought that was a financially feasible option. The preferred store size of 20K sq ft was also twice as big as what our market and financial feasibility studies recommend.
What about Mr. Zs? Has that site been considered?
Mr Zs was evaluated as part of our market study completed in October 2017. There are a number of reasons the Board does not have plans to pursue this site:
- The projected sales at that site are not high enough to cover renovations and operating expenses. For any site to be viable, sales have to be higher than acquisition costs plus operating expenses.
- The interior condition of Mr Zs, as reported by developers familiar with the space, is in poor shape and requires extensive, costly updates.
- The listing price is well above current market value, according to several commercial realtors we've spoken with.
- The store is more than 2x bigger than what the co-op can support. We are looking for a 10-12K sq ft space, as recommended by both our market study and financial consultants. It is not financially feasible to open in a larger space.
The Board has a fiduciary responsibility to our Ownership to to only pursue site opportunities that are financially feasible. At the current price and in the current condition, Mr. Z's is not financially feasible.
Will PFC be the only retail business?
The RFP suggests a 20 - 25K sq ft sized space. PFC will occupy 12K sq ft. It will be up to the developer to determine whether the remaining space will be retail, residential, or other. Once the bid is submitted, we will share the final concept with our Owners at our Annual Owners Meeting on April 29.
How will parking be handled?
The development firm will determine that. PFC requires a minimum number of parking spaces and the developer is committed to working with us to ensure our parking requirements are met.
What about increased traffic?
We are aware that residents are concerned with increased traffic. PFC directors have discussed this concern with Village staff. The Village would need to complete a traffic assessment and implement recommendations to ease traffic at the Main/Parkside intersection, similar to what was done for Mariano's. PFC nor the development firm have authority to change traffic patterns. PFC will continue to advocate that a traffic study be completed as part of the new development, including recommendations to make the area more pedestrian friendly.
Will PFC continue to research other site opportunities?
Yes, absolutely. We expect a competitive bid process for the 101 S. Main development and as such, are keeping options open. However, the Board will not settle on a less-than-stellar site that has vetted sales potential and long term viability. Our best prospects for success remain in the central corridor, and specifically, the downtown area.<
How do you know the co-op will be financially successful at this site?
The PFC Board is very confident of long term success at this site. While there are never guarantees with a start-up such as ours, the board has spent the past 6 months researching the viability of this site. The Board hired Keith Wickes and Associates, a firm with 40+ years of grocery experience, to complete a 2nd market feasibility study to determine how changes in the grocery market affect our sales potential. The market study confirmed that 101 S. Main is not only financially feasible, but is the best performing site out of all sites studied. We have had our financial statements vetted and verified by co-op experts and lenders.
How will PFC finance this opportunity?
PFC has a vetted plan to finance the build out and opening of our store. This funding plan is similar to that of co-ops opening across the country - we know it works. First, we will need to raise approximately $1.5 Million thru Owner Loans and preferred share sales. This gives Owners a unique opportunity to invest in their local community with a return on the investment. The $1.5 million serves as part of collateral for a traditional bank loan. Since we are a co-op owned by hundreds (and eventually thousands) of investors, banks require that we raise about 50% of the required capital from our Ownership. Once we raise the required $1.5 million, we will be able to secure a traditional loan. The more money we raise from our Owners, the less we need to borrow from the bank and the more money the co-ops saves as well as the more local money is invested in our community.
What are the parameters (terms, rate, etc) for Owner Loans?
We are working with a securities attorney with decades of co-op experience to put together our loan and preferred share offerings. As soon as we have the details complete, we will let our Owners know about these investment opportunities. Owner Loans typically have a payback period between 5 and 10 years with an interest rate tied to term length (i.e. the longer the payback period, the higher the interest rate). Preferred Shares (investment stock) are typically longer term investments with dividend payments determined by the Board and normally tied to sales performance. Preferred Shares are better for the co-op because they appear as equity on the balance sheet.
This is exciting. How can I help make this happen?
First, please sign our petition of support. We expect the RFP to be competitive and ours will not be the only development bid submitted. The more community support shown for PFC coming to 101 S Main, the higher our chance of securing this site. Please also consider writing your elected Trustee. For even more ways to help, click here. This will take all of us working together!