Organic grocery store co-op seeks money from Elgin

  • Kari Christensen is the project manager for an effort to open a Shared Harvest co-op grocery store in Elgin. The group wants to set up shop in a portion of the Ziegler's Ace Hardware store building downtown.

      Kari Christensen is the project manager for an effort to open a Shared Harvest co-op grocery store in Elgin. The group wants to set up shop in a portion of the Ziegler's Ace Hardware store building downtown. Rick West | Staff Photographer

  • The proposed floor plan of Shared Harvest food co-op. The group made a presentation to Elgin City Council members Wednesday.

    The proposed floor plan of Shared Harvest food co-op. The group made a presentation to Elgin City Council members Wednesday. COURTESY OF KARI CHRISTENSEN

 
 
Updated 5/9/2015 7:18 AM

A group working to start a food cooperative grocery store in Elgin hopes the city will contribute or loan money to the project, or even do both.

Shared Harvest has found the ideal location in a 6,500-square-foot space in the Ziegler's Ace hardware store building at 215 Spring St. in downtown Elgin, co-op board member and project manager Kari Christensen said. The space is used mostly for storage by the hardware store.

                                                                                                                                                                                                                       
 

The co-op, which would offer organic and locally sourced foods, is finalizing its business plan and hopes to make a formal request to the city council sometime next month, Christensen said, declining to provide preliminary financial figures.

A grocery store downtown would help attract more businesses, Christensen said. "We are hoping other retailers will want to come down here when they see us succeeding."

Planning studies show that downtown stakeholders would like a grocery store in the area, said City Manager Sean Stegall said, who asked the group to make a presentation at the last city council meeting. Any money the city council decides to contribute to the co-op would come from either riverboat funds or most likely tax-increment financing funds, he said. Elgin has used TIF funds -- where property taxes going to local governments are frozen at a certain point and any above that point go back into development -- for physical and aesthetic improvements to projects and businesses downtown, Stegall said.

"I would imagine that if the council were to be desirous of investing in the project, (the contribution) would be targeted toward capital improvements," he said.

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Hardware store owner David Ziegler said the co-op can have the space rent-free if it raises enough funds to "fix up" the building. "It took me about two minutes to understand what a great opportunity this is for the city, for the community, and also for Ziegler's Ace," he said.

Shared Harvest sold 616 shares at $100 each as of Friday, Christensen said, adding 73 percent of supporters are from within 3 miles of downtown Elgin, with the rest in areas like Carpentersville and the Dundees. Anyone can shop at co-ops, but shareholders get a share of profits.

A market study done by the co-op shows it would make about $2.7 million in revenue in its first year, generating about $34,000 in sales tax revenues for the city. The store would provide up to 30 full- and part-time jobs in the first five years, said Christensen, who's from Elgin.

The goal is to get to 1,000 shareholders, and then ask those shareholders for loans while also seeking loans from banks, Christensen said. Also, the group is planning to apply for grants, including one from the U.S. Department of Agriculture.

                                                                                                                                                                                                                       
 

There are precedents for municipalities contributing to co-op grocery store projects.

The village of Oak Park approved in February a $250,000 grant -- of which $50,000 must be paid back -- for a new Sugar Beet Co-op, and cosigned a $250,000 line of credit with a local bank, said Tammie Grossman, Oak Park's director of development customer services.

However, Oak Park also requested the co-op to raise $800,000 in shareholder loans before it agreed to make the contribution, she said. "We wanted to make sure the community really wanted it," she said.

Elgin Councilman John Steffen said he's "generally open" to the idea of making a financial contribution to Shared Harvest. "I'd need details on what the project is going to cost and what their request is," he said.

The co-op should consider asking for a sales tax rebate agreement, which Elgin has with grocery stores like Butera Market, Councilman John Prigge said. "I'd have to see their plan," he said about any monetary contribution. "I'm really impressed by the fact that there are local people that are buying shares into this."

Councilwoman Carol Rauschenberger said she resigned from the co-op board two weeks ago at the advice of Elgin Corporation Counsel Bill Cogley. She also sold the co-op shares she bought for herself and her husband, and will abstain from voting from all co-op matters on the city council, she said.

The initiative kicked off with a steering committee in summer 2012. Co-op board President Jennifer Shroder said it's typical for co-ops to take three to five years to come to life. "It's going to happen. No question."

Shared Harvest is holding an open house 6 to 9 p.m. Monday at Solo restaurant and wine bar, 13 Douglas Ave. The cost is $40 per person, $70 per couple.

For more information, visit sharedharvest.coop.

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