|
|
|
MailTribune.com
  • Medford Market sets cash deadline

    Loan on hold; co-op board seeks to raise $1.5 million in a week
  • The board of directors of the Medford Market said Monday night that if $1.5 million can't be raised within a week, the food co-operative could dissolve without ever opening.
    • email print
  • The board of directors of the Medford Market said Monday night that if $1.5 million can't be raised within a week, the food co-operative could dissolve without ever opening.
    Board members told several hundred members gathered for a meeting that the financial crisis came about a week ago, when the co-op's major lender backed out.
    The market, which has planned to bring local, natural food to the Medford area, has attracted 1,333 members and raised about $175,000 in memberships, loans and grants.
    Board members, however, told those assembled that with present resources, the co-op will be unable to make its Oct. 10 lease payment on the former Ace Hubbard Hardware Building, at the corner Riverside Ave. and East Main St. in Medford.
    The Medford Market board will do a last-ditch fundraising mailing Wednesday, asking members and newcomers to pledge the full amount allowed — $2,000 a household. That could raise up to $2 million, said board president Velda Welch.
    As the other part of a two-pronged strategy approved by enthusiastic, nearly unanimous voice vote, the Medford Market will seek assiatnce from the highly successful food co-op in Ashland.
    Medford City Councilman John Statler, a member-owner of the Medford co-op, was chosen to see whether the Ashland group would consider opening a branch in Medford, with the option of building on the efforts and contributions already mounted in Medford.
    The Ashland Food Co-op bailout will be proposed, but activated only if Medford Market fails to come up with the needed funds, said Welch. The Ashland co-operative studied the Medford area several years ago, but decided not to open a branch.
    Erik Wallbank, vice president of the Ashland board said his panel — which earlier gave the Medford Market a $10,000 grant — meets again on Oct. 10.
    "We look forward to (hearing the proposal) and will look at it," Wallbank said.
    Medford Market's prospective lender, the National Cooperative Bank, in the past year stiffened its conditions for lending, including a $10,000 independent market study this summer and requiring it to qualify for loans at a local Medford bank, said Welch.
    The study showed the Co-op would make $3.4 million the first year, which would put it solidly in the black, said Welch, however, the local loan requirement was a deal-breaker.
    Umpqua Bank Business Relations Manager Steve Gervais, an owner-member of Medford Market, said that requirement places the NCB loan outside the realm of possibility, because Oregon banks don't lend without a government guarantee and such guarantees don't get given to cooperatives.
    NCB loaned Medford Market $25,000 in July, which MM had to match, dollar-for-dollar, along with much documentation and negotiation, said Welch. Medford Market has been working to raise up to $495,000, with $300,000 in escrow, to demonstrate successful community support for the co-op. NCB, however, told the Medford Market board last Tuesday that because it didn't meet the local loan criteria, and "tabled" its loan.
    "Now, our options are limited," said Welch, adding that the Co-op's Portland attorneys, after a two-hour phone conference, suggested that "without an angel giving you $1.5 million," it appeared the ownership would have to dissolve it.
    Board members told the Monday meeting they would also approach the building owner, Bob Seus, about the possibility of buying more time for fundraising by postponing the rent payment.
    One member exiting the meeting, Malcolm MacNair of Medford, said, "This is not a wealthy community. The problem is raising cash and it doesn't look like they're going to be able to do it. The best suggestion is to merge with or get help from Ashland."
    One woman in the audience told board beleaguered board members "you look like you've lost the energy to move forward." Welch responded, "If you get us a resurgence of money, you can damn well bet we will be resurgent."
    Another member, Joan Carroll of Medford said, "We've all put a lot of energy into it and would like to see it succeed. The credit crunch is hurting us. Maybe Ashland Food Co-op will take over. They seem to have the money."
    Statler reminded the crowd that Medford Market and the leased building are two different entities and that if the lease goes down, it could still explore locating elsewhere.
    "Medford Market has a lot of passionate people here, challenged to raise funds internally because they can't rely on NCB to loan them money," Gervais said. "It's now the 11th hour and 59th minute to do something that's been in the works for a couple of years. "¦ If they don't raise the money, they can appeal to the Ashland Food Coop to open a branch here."
    The board called for volunteers with marketing and financial experience to come forward. Members will meet at the market site at 6 p.m. Wednesday for a volunteer party to get out the fundraising mailing.
    John Darling is a freelance writer living in Ashland. E-mail him at jdarling@jeffnet.org.
Reader Reaction

      calendar