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Co-op: Funeral or Resurrection?

“I thought I was coming to a funeral, but this may turn out to be a resurrection,” said Leon Despres at the Hyde Park Cooperative Society’s town hall meeting yesterday.

The dominant theme was surprise, shock even, that the cooperative grocery’s shutdown is not a fait accompli, as Co-op board president James Poueymirou had suggested in press accounts preceding the meeting.

The most sustained applause was for a proposal by two board members (board secretary James Withrow’s remarks are posted here) to reorganize through a Chapter 11 bankruptcy that would allow the Co-op to shed a 25-year lease for a shuttered store on 47th Street in exchange for a lump-sum payment.

Creditors would be paid in full, including the University of Chicago, the store’s landlord, which is owed $1.2 million in back rent.

The plan depends on a $2 million financing package now being considered by the National Cooperative Bank. The University would have to be paid immediately or it could move to evict the store.

Freed from the financial drain of paying rent for the shuttered 47th Street store — the major factor in the organization’s financial crisis — the Co-op could pay off the refinancing with income from 55th Street, which generates about $1 million in annual profits.

Poueymirou described the proposal of the University Chicago to forgive rent owed and provide funds to pay off Coop creditors, in return for gaining control of the store’s lease, but didn’t actually admit that he is supporting it.

The Co-op would cease to exist, he said.

In response to a question, he said the University had pledged $4 million to buy out the Co-op’s lease. No University representative attended the meeting.

The University has promised a new grocery store would open at the site within two weeks of the Co-op’s closing, but has refused to say what store.

Amelia Tucker of the Retail, Wholesale, and Department Store Union, representing 170 grocery workers, said the union would take action to oppose replacing the Co-op with a nonunion store, as is expected.

At an employees’ meeting Saturday, Co-op workers reportedly discussed picketing a new store.

Co-op members would lose the value of the membership stock they own in the shutdown plan. Many members have hundreds of dollars of stock, Withrow said. Scores of people held up their hands when he asked how many in the audience had over $100 worth of stock.

There were comments from Co-op detractors, but there was also extensive praise for new general manager Bruce Brandfon, who described a nascent turnaround in the store’s operations, including price reductions on thousands of items.

Ald. Toni Preckwinkle spoke in support of the University plan.

But many members speaking at the meeting or encountered on its sidelines seemed to think that a shutdown is always an option — why not give the alternative a try first?

Co-op members will vote by mail over the next three weeks in an advisory referendum on the two proposals.

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Category: food, Hyde Park, nonprofits

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One Response

  1. […] amount of support for saving the cooperative grocery at a town hall meeting November 18 (see our previous post).  Mulberry said he went to the meeting prepared to support the University’s offer of a $4 […]

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