Maybe you’ve heard about Prairie Food Co-op’s intention on opening as the anchor retail space on a proposed development at 101 S. Main St. in downtown Lombard.
One of the most frequent questions we receive from our community is why aren’t we pursuing the old Mr. Z’s site at 401 S. Main St. in Lombard? Mr. Z’s is the now vacant grocery store that closed in 2015. It is 28,000 sq. ft and is on the market for a list price of $2.25 million dollars.
Let us go into further detail about why pursuing this site would not only be unfeasible for PFC, but would also be irresponsible in regards to our profitability and responsibility towards our Owners.
An Overview of our Site Needs
- Centrally located near major travel routes
- 10,000 - 12,000 total square feet
- White box - Site should be ready to move in to with minimal renovation costs
- Cost of site must stay within calculated costs per our financial pro forma
- Site must have plenty of parking
- Site must show to be high-performing to insure that we keep our doors open
The Two Main Reasons We Can’t Open at Mr. Z’s
The biggest criteria we need to meet is the perfect size for our store. The two market studies we commissioned from food co-op consulting agencies recommend that we open in a space 10,000 to 15,000 sq. feet. Our budget and financial pro-forma further instruct us that a store around 12000 sq. feet is the best for our financial health.
When food co-ops open in spaces that are too small they tend to be looked at as niche, gourmet, or health food stores which puts them at a financial disadvantage immediately. Also, stores that are too small tend to run out of cash on hand to keep up with demand for inventory.
Too big of a store is even more of red flag. If you’re paying for a 28,000 sq. ft store when your market study tells you you should open in a 10,000 - 12000 sq. ft. store, 1) you will run out of money rapidly and 2) no bank would give you a loan anyway.
Also, we are not developers. We can’t buy a site, parcel it out, and get into the landlord business.
Our financial pro forma dictates that we can expect to spend about 4 million dollars (give or take) on this project.
Other co-ops have raised the capital for a project this size thru a combination of owner contributions (loans and preferred share sales), bank loans, and non-traditional financing. It’s not a piece of (organic) cake, but a challenge that we know we can handle.
Trying to open at Mr. Z’s would double or triple our costs. To purchase the building, gut and renovate (we likely cannot use most of the existing equipment), then parcel it, and expend energy trying to rent it out would be cost prohibitive.
It would be the equivalent of expecting a favorite local restaurant or local brew pub to open at the empty Old Country Buffet. Just because a similar type of business was in a space before, doesn’t mean it’s viable for a similar, smaller business to open in the same space.
Trust Us. We've Done (Lots) of Homework.
We have commissioned two separate market studies with two different food co-op consulting firms that follow best practices from following the scores of other just-opening food co-ops across the country. We are now working with industry leading architects, designers, construction experts, and developers who have experience in this industry and whose advice is worth its weight in gold.
We totally understand why people ask about or think we should open up at Mr. Z’s. From an outside perspective, it make sense. However when you dig into the feasibility like we have (and double and triple checked it), you quickly see that it's not an option.
Step Up and Get Involved
We are at a very exciting point for Prairie Food Co-op. Please stay tuned and get involved. We are having our Owners meeting on April 29th and are aiming to have the biggest turnout we’ve ever had. If you're an Owner, please RSVP soon. Also, please watch out for events on our events page that we will have coming up and, if you’re an Owner, please bring a non-Owner friend to consider Ownership.
If you’re not part of the PFC family yet, please consider becoming an Owner today. Every Owner gets us one step closer to opening by showing our village and our community of villages around us, that we have strong, local support.