TODD SCHMIT: Great. We have a smaller group this time that was working with Brookton's Market. This is another co-op development project in terms-- well, Grace will tell you all about it. And I believe Keith, her partner in crime, is zooming in with us on this. Should I do something different here with-- so we can see?
SPEAKER: Oh, maybe, yes. [INAUDIBLE] Yeah, Keith [INAUDIBLE].
TODD SCHMIT: Here we go. Hey, Keith. There he is. OK.
GRACE HARRIGAN: So good morning, everyone. As Todd said, my partner, Keith, and I are here today to talk to you about cooperative development and some exploration we did with Brookton's Market. And I'll hand it off to Keith to start the beginning of the presentation.
KEITH LI: Thank you, Grace. So I will start for giving you a little bit of background on Brookton's Market. So Brookton's Market is a grocery deli store that serves food and drinks, like a breakfast sandwich, bagels, soup, coffee, salad, and alcohol. Now, looking at around 10 miles away from Ithaca in the middle Brooktondale-- the town Brooktondale.
This other one-- giving them a place for them to sit down and eat and chill. And Brookton's Market operates on the first floor of the building, with apartments on the second floor, which you can see on this photo. The second floor is apartments building, for living.
And they're currently trying to see if the market can transition to a worker and community cooperative. The owner, Josh, had described the market as a one-stop shop for community as the only deli, grocery, bar, and restaurant.
So our current objective for this project is to explore alternative comparative ownership models for Brookton's Market. So our client is interested in learning more about options for a multi-stakeholder cooperative model. So to do this, we conduct a background research and collect some data to follow some recommendation for Josh and Caleb.
We have analyzed the market's current offerings and interest in a cooperative transition through research and data collection. And this got us to develop Transition plan, some documents, and some financial feasibility assessment for market. So I'll probably also show you some mini case studies. There are a total of four mini case studies that focuses on similar cooperative businesses like Brookton's Market but in different locations, for example, around the state of New York, like Rochester and Buffalo-- so something like that.
So we also-- we need to also suggest some cooperative transition-- a complete transition guide for Caleb and Josh to make sure that they get an updated direction after our project is done, in the future.
So the process of collecting data for this project-- we were able to visit Market and met with a lot of community members. We went in there with Professor Todd. And Todd [INAUDIBLE] lot of investors in there. We had a great time in there. And we were able to utilize this artist's process for some research for us to reference in regards of cooperative transition model.
We were able to conduct research using more than-- we were having around 18 research guides for us to do some to take a lot of bylaws and cooperatives model. So we can establish good documents for cooperative. From this, we were able to access all the information about the transition guide to aid Josh and Caleb in moving forward to the next phase of the cooperative development.
So with that, describe the transition now of document-- that document's consideration that taking into account to transition Brookton's Market into a corporate ownership. In addition of transition guide, we also create a forward case study cooperatives across the country.
So I have just mentioned about that. Those cooperatives [INAUDIBLE] made in Springfield, New York. And this would go up in Rochester, New York, and the Black Star Cooperative in Austin, Texas. And the Old Creamery Cooperative in Cummington, Massachusetts. We noted that there are similarities for each of these businesses when comparing to the Brookton's Market.
So on my part, I will be introducing the Arts Café and Abundance Food Cooperative. The Arts Café is a café that is redeveloped abandoned buildings and turn it into a café in the community and trying to bring the community together in Springfield, New York.
I just wanted to mention that the Arts Café is operating under an LLC model. They were organized on January 19, 2018 as a limited liability company. For this, they want to make it a part-- treat it like a partnership of tax effect for taxation purposes.
So how did they apply for the company to be an owner? So you need to have up front of $200, $500 investment because-- and they have-- I think they have around 200-plus owners. So they need you to put up $200 $500 investment up front to be an owner in the cooperatives. And the governance structure is using one voting system because they have a lot of owners in the community-- in the cooperatives.
And the second one is the Abundance Food Co-Op. And the Abundance Food Co-Op exists to provide some safe and healthful, nutritious food and other products at a reasonable price for the Rochester community. To be an owner, you have to pay $100. This is the cost of a share. You only pay once, and there is no other fees for this ownership model.
The Abundance Food Co-Op is using a board-of-directors system. So they currently have a board of directors. And you need to be a shareholder to join the election process, be electors, board of directors. So this is two different systems under different cooperatives. So I will pass it to Grace for [INAUDIBLE].
GRACE HARRIGAN: Thank you, Keith. So the two businesses I focused on for my mini case studies were the Blackstar Cooperative, which is based in Austin, Texas. Josh and Caleb were both really interested in this brew pub model. It's a community-owned brewery. So the membership shares are $150. And there's not a ton of membership benefits other than you get a free beer on your cooperative birthday, $2 off of a house beer at all time. And it was just kind of founded by a bunch of homebrewers that were interested in having a more community focus.
They opened in 2010, and they have 3,800 members. And we were able to interview their business manager. And she gave us a better glimpse at the day-to-day operations and the governance of the business. So there's no general manager of Blackstar. There's instead four different teams for beer, kitchen, front of the house, and business. And each of those teams has a manager. So she elaborated a little bit more on the communication difficulties with that.
And then the Old Creamery Cooperative is a community-owned deli and grocery store in Cummington, Massachusetts. It originally was a dairy cooperative and transitioned through a lot of different businesses throughout time. It's over 100 years old. And this was really similar, we felt, to Brookton's Market, as it was owned by two individuals before it was converted into a cooperative.
They opened as a cooperative in 2013. And at the time of the case study, we were given, they had 560 members. So this case study gave us a really good feel of the conversion process of transitioning an existing business into a cooperative. And I outlined really detailed the financial investments that were necessary to become a cooperative, whether it was fundraising for members or if it was additional capital secured through loans, grants, and other means.
So in our final product of the transition guide, we first kick off with the mini case studies. We felt that it was a good variety of different types of business and information acquired from each that would give Josh and Caleb a good idea for different governance structures-- what to look for when you're embarking on a cooperative transition journey.
And then we also included some different membership types. We know that there is probably not going to be 3,800 members in Brookton's market, as there was in Blackstar brewing. So we wanted to highlight some of the different membership types that could be included, whether it was employees, community members, or maybe even local vendors that contribute to the market already.
We also had some bylaw guidance in there that they could use in constructing their own bylaws down the road. And then-- so initially, our project was sorted around creating a community survey. And we kind of took a drastic turn into exploring more of the cooperative transition options and doing more research for Josh and Caleb. So that way, they'd have the opportunity to develop more interests and put forward that survey later. And then we also had some next steps for Brookton's market in the transition process based on what we had learned and our final conclusions.
So what comes next for Brookton's Market? We suggested that they develop a steering committee. They work really closely with Todd, but we suggested that they work more closely having Carol, their general manager, on the steering committee, as well as two to three other community members who might have experience in different areas, like fundraising or community outreach.
And then with this steering committee, they could conduct further research and contact with the businesses. We discussed that way, they can build a relationship and have that support group for the transition process. And then again with the steering group, developing that community interest survey, so that way, they have a better feel for what interest is really out there. And it's more input than Keith and I could provide.
And then provided the interest arises from there, they would hold a community meeting and establish a means of communications with potential member owners. And then you move into the really complicated things-- working with a lawyer-- they have a liquor license, so that can be pretty complicated-- and then beginning the fundraising process for their business and addressing other legal concerns like [INAUDIBLE].
So in our final conclusions, I wanted to include this quote in here. This was from the conversion case study, and we felt that it resonated with Brookton's Market really well. This is from the Old Creamery. They have the same business model, having community events, a grocery and deli and, really, that community center feel. And we wanted to note that Brookton's Market really has the potential to succeed as a community-owned business. They fit the mold really well.
But we wanted to just remind them to keep in mind the following concepts of cooperation, making sure they're working with the correct professionals and support groups throughout the process, having patience because the transition is lengthy-- it's often two years-- dexterity and determination because it's difficult, and making sure they're being transparent with community and professionals throughout this process.
And with that, we wanted to take everyone on board, including Todd and Anastasia, Noemi and Bobbie, Jodi from Blackstar, and Joshua and Caleb for allowing us to work with Brookton's Market. Thank you. Are there any questions?
TODD SCHMIT: Great job. Do we have Josh or Caleb on the line that might want to provide a couple-- they're both traveling, I know, so I don't know if they're on.
SPEAKER: No, they're not.
TODD SCHMIT: Not? OK. All right. So two main points here. Here's one where it started out a major pivot in the project, right? Working on trying to get a community survey out, which turned into we need to know a lot more about the type of business models before we can ask community members about that. So going in and finding other peers that have done it is interesting.
The tidbit on the liquor license-- OK, if you get a liquor license in New York State, the owners have to go through a review process. So think if there's 500 owners of the Brookton's Market co-op, whether all 500 have to go through this review process. Sounds complicated, but what I understand is New York won't make it easy for anyone. All right? All right, let's thank our duo here. Great job.
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Part of the
Grand Challenges curriculum, Cooperative Business Management (AEM3260/5260) focuses on engaged learning with community and cooperative clients. In May of 2022, ten student project teams presented the results of their semester-long work with community partners. Professor Todd Schmit evaluates.
Project title: Worker Co-op Business Transition Community Partner: Brookton’s Market Student Team: Grace Harrigan, Cheong Chun (Keith) Li