Village Cooperation Builds A General Store

The Village Cooperative is a rural co-op located in the Pioneer Valley of Western Massachusetts, not far from the Connecticut River. We grew out of a buying club started in the mid-1970s, evolving later to a small storefront. At the very end of 1990, after many months of planning and a sustained community effort, we completed construction of a new facility -- still at our very rural site.

Location, location, location

The buying club originally operated in Shutesbury, a town of about 1500 residents. In 1983, although we had good support in the area, we were forced to relocate. Fortunately, the owners of LaClaires, a small convenience store located two miles east in Moores Corner, invited us to share their 700 sq. ft. space and the operation of the store. This was a great opportunity for the co-op to move gradually into a storefront mode. They had equipment, so we had no major capital investment to make; we split utilities and taxes, but paid no rent. When the owners retired in 1986, the co-op purchased their inventory, began paying them rent, and ran the entire space. At this point, we also became incorporated as the Village Cooperative, choosing a generic name in case we ever moved to another town.

Practically ever since we got into LaClaires, we have looked for another space. Besides being small, the inadequate facilities of the store left us open to being closed down at a moment's notice. And because of the store's proximity to the Sawmill River, we could not legally improve the facilities. However, our Moores Corner location seemed to be the best spot, central to a number of small towns and only two miles from a summer resort. Somewhere along way we realized that to get a store we would have to build it.

Across from LaClaires was a lovely meadow, and on the corner is an old foundation of a house long gone. It was this corner that we set our sights on, well before we had any means with which to carry out such a project. It seemed perfect for several reasons: we wouldn't lose our present customer base (important in an area with low population), and the old foundation made a natural park and outside sitting area. Also, the inhabitants of Moores Corner wanted us to stay, for the co-op brought back to life the "community" and provided a much needed service. Although there are a few small stores in nearby towns, we provide a much greater variety of products than any store within a 15-mile radius.

Sometime in 1988, the owners agreed to sell that corner of the meadow and named a price. At this point, the co-op had very little equity and virtually no cash reserve. We started to talk to community development organizations and to map out a general strategy for executing the project. The estimated cost of the land and construction of the building was $200,000. We would need to come up with 20 percent of that merely to begin. This didn't include the estimate $25,000 we needed for the co-op's equipment and inventory expansion. Clearly, capital was our biggest stumbling block.

Another obstacle was meeting the town's zoning bylaw requirements. My husband, Dan Bennett, also an employee of the co-op, and I went to talk to the Leverett Planning Board and the Leverett Selectmen about our hopes to build a store on this corner. The selectmen were very receptive, but the planning board had some concerns. For one thing, the lot we had in mind was not zoned for business.

Our big breakthrough came in early 1989, when Dan inherited enough money to purchase the piece of land we wanted. With the land available as collateral for a construction loan, we could start seriously planning the project. Dan started to deal with the zoning issues, I started planning for the business, and Laureen Shea, the third main employee at the co-op, started to work with some board members on fundraising for the co-op's expansion. We also had to work out with the board an ownership/financing plan that would protect Dan's investment, protect the co-op, allow construction to move along without group process delays, invite community investment, and look good enough to borrow money from a bank.

With the help of Sam Lovejoy, we devised the Moores Corner Community Limited Partnership, a plan which was fine tuned over time. Dan, as the largest investor, would be the general partner, the one who makes the decisions concerning the real estate. The co-op would become a limited partner with a $5000 investment; other limited partnerships at $1000 apiece would be sought. This money would be used to construct the building and would earn interest starting in the second year. The co-op would lease the building and would have an option to buy out Dan's general partnership within five years.

The beauty of this plan was that it protected the real estate and the co-op from each other's potential failures; ifthe co-op couldn't pay the rent then the partnership could lease or sell the building to someone else; on the other hand, if, in the worst case scenario, the bank foreclosed, the co-op's assets would be protected from bank seizure. This worked to the co-op's advantage when we went to the NCB Development Corporation for a loan. If our assets had been vulnerable to bank foreclosure on the real estate they could not have loaned us the money we needed.

Dan started on the process of getting a zoning change so that he could start getting the myriad of permits needed to get the building underway. The initial petition requesting a zoning change was rejected by the planning board because it wasn't on an official form, so Dan got the necessary piece of paper and got even more signatures than the first time. A hearing was held with the planning board, with unanimous support for the co-op on the part of the attendees. However, members of the planning board were still hesitant, claiming that the attorney general would not accept a zoning change because it was "spot zoning," in other words a commercial zone not abutting an already existing commercial zone. We challenged this on the basis that there had been commerce in Moores Corner continuously for about two hundred years. According to their zoning map, however, our present store was not in a commercial zone. Although this was clearly a clerical error, the lawyers on the zoning board insisted that they would not recommend the zoning change. A few days later the head of the planning board came up with what he called a "win-win" situation -- a bylaw amendment which would allow the planning board to issue a special permit for a general store in a village residential zone. Besides the show of support at the hearing, members of the planning board had gotten innumerable calls from local citizens insisting that we he allowed to build the store.

The next step was a special town meeting held in November 1989, where the bylaw was passed unanimously. But at that point, even though we had full town support, we were held up for four more months by bureaucratic "process' before obtaining formal state bylaw approval. Dan then had to apply for the building permit, get rejected, then apply for the special permit. We were finally granted the permit after going over the site plan review many times, and relocating the building because of some bylaws footnote discovered by one of the lawyers on the planning board -- which meant a second site plan, and change of the building design. Finally, on Friday, July 13, 1990, after we had also obtained well, septic, and Conservation Commission permits, the building permit was issued. The first truck rolled onto the site the following Monday.

Financing

Meanwhile, banks were being approached for a building loan that would be converted into a mortgage upon completion of the building. This was not a good time for this sort of thing, with the Massachusets economy in a downward spiral; many banks were losing money on comercial loans and were in trouble. However, as the Moores Corner Community Limited Partnership (MCCLPJ, we were able to get this loan through the Shawmut Bank as a community project (at this time the bank had a moratorium on commercial loan for real estate). The fact that we were a cooperative, and had a list of people in the community willing to work on the building on a volunteer basis, helped us to convince the bank that this was a community project and that we could build while borrowing only $100,000:

Dan Bennett investment in land$41,000Shawmut Bank mortgage$100,000Village Co-op limited partnership$5,000Limited partnerships$25,000NCB Development Corporation loan$15,000Village Co-op fundraising$12,430Total capital raised to date$183,430

The bank required that $10,000 be put in a CD as a security deposit. This was raised through limited partnerships. All in all, MCCLP has raised $25,000 in limited partnerships and hopes to raise even more.

Early projects on the site included disposing of debris from a dismantled barn; excavation, underbid by a local excavator who also bought a partnership; and laying the foundation. For constructing the shell of the building, greatly discounted supplies and professional labor were provided by numerous individuals. This also was true during the roofing, masonry, sheetrock, and finishing states. Many more people signed up to help than actually showed up, but many who showed up didn't bother to sign up. The community nature of the project was much broader than the co-op; people like our store because it's a community store catering to member and non-members alike. More than half of our volunteers were not co-op members.

The broad community support behind this project cannot be understated. Without it we would not have our beautiful store in the meadow at Moores Corner. This experience has proven to me that cooperation extends far beyond a mere corporate structure, being at heart a sympathetic, mutually benefitting web of relations between friends and neighbors.