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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.

Conflicting Accounts on Co-op

The Hyde Park Herald reports Nov. 14 that the Hyde Park Cooperative Society board has voted for a debt workout plan that would involve handing over the Co-op’s last remaining store to a new tenant.

But one Co-op board member states on his Hyde Park Urbanist blog (also Nov. 14) that “the board has not endorsed this proposal, at least not yet,” and is “still pursuing other avenues, including commercial loans.”

What’s certain is that the Co-op’s town hall meeting (Sunday, November 18, 2 p.m. at the Hyde Park Neighborhood Club, 5480 S. Kenwood) will be packed and heated. Members will vote on the Co-op’s future in a mail ballot starting the next day.

The University of Chicago is backing the plan to close the Co-op [indeed, according to reports, the University initiated the plan]. The University owns the Hyde Park Shopping Center where the 55th Street store is located, and is owed $1.2 million in rent from the Co-op.

According to reports, the 55th Street store is profitable — earning about a million dollars a year — but payments on a multiyear lease for a newly constructed 47th Street store, which was opened in 1999 and closed last year, are behind the 75-year-old institution’s financial crisis.

Read the rest of this entry »

Harper Court For Sale?

Community groups in Hyde Park are demanding open discussion of the future of Harper Court after learning that the nonprofit foundation which owns the neighborhood shopping center has taken steps to sell it to a developer.

Representatives of community groups are scheduled to meet with the attorney general’s office to discuss the sale, and the Hyde Park Kenwood Community Conference has requested a meeting with representatives of the Harper Court Foundation, said HPKCC president George Rumsey.

Harper Court tenant Dr. Tom Wake of the Hyde Park Animal Clinic said he was informed in mid-December that downtown developer JDI Realty had signed a letter of intent to purchase Harper Court, according to the Hyde Park Herald. Later it was learned that the foundation had deeded the property to the Harper Court Arts Council, an offshoot of the foundation, on December 8.

The Harper Court Foundation was established in 1965 to provide affordable retail space for some of the 600 small businesses displaced by urban renewal, including residents of an artists’ colony on 57th Street that had been demolished. Construction of the multilevel off-street shopping center, located on Harper between 52nd and 53rd Streets, was financed with federal small business loans and bonds bought by hundreds of Hyde Parkers.

The arts council was established by the foundation in 1990 to run the annual Hyde Park Community Art Fair and promote artistic activity in schools and the community. Its independent board, which included members of the Artisans 21 cooperative located in Harper Court, was replaced in November when members’ terms expired; new arts council officers are all individuals previously listed as Harper Court Foundation officers.

A former arts council board member said that group had never discussed buying or selling Harper Court.

A spokesperson for the Illinois Attorney General said the Harper Court Foundation has never filed an annual report with that office and was recently asked to do so.

“There are just so many unanswered questions,” said Rumsey. “What’s happening? What’s the future of the Court? Which board controls it? Why was this decided? What happens to the businesses there?” Another question he has: what process led to the selection of the developer?

“It seems like they’re going out of their way to avoid informing the public,” Rumsey said. “Whatever happens there is going to have a significant impact on Hyde Park for the next 50 years.”

An ad-hoc group called Neighbors to Save Harper Court has scheduled a meeting with Therese Harris, Assistant Attorney General for Charitable Trusts. The group is also petitioning Alderman Toni Preckwinkle to help “preserve Harper Court.”

The shopping center’s troubles have resulted because “it’s been so mismanaged for the 25 years I’ve been here,” said Wake. With rare exception, he said, “there’s been no management.” The center’s affordable rents have allowed him to run a practice which serves animal owners of all income levels, he said.

Calls to Harper Court Foundation executive director Leslie Morgan and president Paula Jones, an officer of Hyde Park Bank, were not returned. David Rattner of JDI Realty declined to comment.

There is “no connection” between the sale of Harper Court and the University of Chicago’s recent request for proposals to develop the historic Hyde Park Theater building directly north on Harper Avenue, said Hank Webber, the University’s vice president for community affairs. The University is the leaseholder for the new Checkerboard Lounge in Harper Court, and a University official sits on the Harper Court Foundation board.

If the Harper Court Arts Council sells the property and disburses the funds to nonprofit cultural institutions, the University of Chicago could be a major recipient, observers say.

Harper Court was in the news in 2002 when Morgan removed chess benches that had been a traditional gathering place; community protests at the time were unsuccessful. “That to me was the beginning of the end,” said Sonya Csaszar of Neighbors to Save Harper Court. “They never listened to the community.”



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