Berkshire Co-op Market Looks to Members for Expansion Funding

Now, the market is planning a major expansion - and it is again looking to its members for capital.

General manager Daniel Esko outlined the project and financing arrangement earlier this month.

The expansion is part of a reimagining of the west end of the Bridge Street corridor by Benchmark Development, a local company headed by Michael Charles and Brian Cohan. The project calls for a massive restructuring of the lot that includes the existing co-op building and the old Laramee's Cleaners building to its west.

The change will require a large influx of cash, and the market is asking members whose primary address is in Massachusetts to provide $1.3 million of that capital in the form of a private offering.

The co-op will solicit unsecured loans for what it describes as a "speculative" investment. A packet distributed to members stresses that repayment is not a guarantee. Such an arrangement is commonly used at cooperative businesses; Wild Oats Market in Williamstown funded a renovation in 2004 through member financing.

Terms range from five to seven years, and the minimum loan amount is $1,000. Interest rates are dependent on the amount of the loan, but there is some flexibility.

For example, loans up to $10,000 will have interest rates of up to 3 percent. Loans over $10,000 net a rate of up to 5 percent.

Esko said that the amount of interest can be reduced if an owner is feeling charitable. But, he said, that's not recommended.

"We encourage people to take the full rate we offer," he said. "Help us help you."

For the first two years of their loan, owners will receive interest-only payments from the co-op.

The funding will mostly cover finished fixtures and equipment for the space, Esko said, as well as other incidental expenses that come with the expansion.

"The developer is building us a box," he said. "It's up to us to make it a store."

The remaining funds, approximately $2.6 million, will come from the Co-Op Fund of New England in the form of secured loans.

In Phase One of the project, the developers plan to raze the laundry and dry cleaner building and replace it with a three-story mixed-use development with retail and office space and 22 condo units. The co-op will take the ground floor.

Then the current co-op property will be razed and a parking lot will take its place.

Phase Two will involve construction of a three-story condominium building behind where the co-op now stands, abutting the Searles Castle property.

The permitting process is moving forward with another meeting with the commission and meetings with the Select Board on the horizon later in November and in December. The developers hope to break ground on Phase One in spring of 2017. There is no definite timeline for Phase Two, said Charles, one of the Benchmark principals.

Esko said the Phase One timeline from the developer will allow the co-op to open in late spring or early summer of 2018.

The grocer has an ambitious schedule for the next year, said Esko.

During the construction of the new space and through the interior work to prepare the space, the co-op plans to keep regular hours. A temporary parking lot to the south of the building will allow customers to avoid the construction site to the west. Esko said there will be an effort to maintain a high level of customer service as the developers work next door.

Once the interior work is completed, newly arriving inventory will go directly into the new space. The current store will stay open until May or June, Esko said.

"Then one day we'll close our doors like normal at 8 p.m.," he said with a smile, "and start moving over the rest of the store."

By Eoin Higgins, [email protected] • Thursday, November 17, 2016