Backers of a new cooperative grocery store development along Route 14 in Woodstock hit a milestone this month, obtaining financial backing from more than 1,200 McHenry County households, the Food Shed Co-op said in a news release.
While the project missed its membership goal by a few weeks, the addition of more than 475 new owner-members is a 67% increase since December, according to the release and Food Shed President Rusty Foszcz, a Richmond resident.
The Woodstock City Council in April voted unanimously to annex the potential grocery store site at 10806 Route 14 into the city, with an initial zoning designation in the city’s B3 Service and Retail District, meaning the grocery store use would be allowed on the parcel without any further zoning permits needed.
Food Shed still would need to get a building permit from the city.
To become a member in the Food Shed, one must buy at least two shares in the project, worth $100 each, Foszcz said.
Earlier this month, the Food Shed started a new capital campaign with the goal of raising $1.75 million by Oct. 15 to help it secure more financing. It is in talks with several lenders and financial institutions, Foszcz said, and its members are working to ensure the project moves forward.
The funds raised will be used to back more borrowing to bring the Food Shed’s resources up to $4.3 million, which will cover construction costs as well as startup and operating expenses for a number of months, Foszcz said.
Buying the two traditional shares in the cooperative will give shareholders the right to vote on the organization’s board of directors once the store is established and the policies of the store, such as the percentage of locally grown and raised products it will stock versus the share that will come from producers outside northern Illinois, Foszcz said.
The cooperative also is selling preferred shares of the Food Shed project right now, which are different than the common shares and will pay their owners dividends in years the store is profitable, Foszcz said.
“What we’re trying to do is raise money to build this store by also giving our owners and people in Illinois who want preferred shares the opportunity to do what’s right but also make a little money while doing it. It’s an investment in the store and county, more than in the corporate world. This is more an investment in the community, than it is in your stock portfolio,” Foszcz said.
Foszcz pointed to disruptions to the supply chain during the COVID-19 pandemic last year, with large meat packing plants shutting down because of worker exposure to the virus, as a reason to beef up local markets for food grown and raised in the area.
So far, investments into the project are being held in escrow, with the plan that funds would be returned to investors if the group fails to bring the store’s construction to fruition, Foszcz said.
Common shares in the Food Shed, in addition to allowing their owners to vote on elections to the organization’s board of directors, may also provide their owners lower prices at certain times on some products in the store.
“There will be those times when [commons share] owners will get a special price, that’s what we’re foreseeing,” Foszcz said. “Again, that’s up to the general manager to try to put those policies into place. The store is going to be open to the general public.”
Preferred shares are available to all adult Illinois residents, for $1,000 a share, a price that will remain in perpetuity for a preferred share, Foszcz said.
Loans to the project can also be made by co-op owner-members residing in Illinois, according to the news release.
The co-op has a tax-deductible donation option available, as well, Foszcz said, and charitable trusts and foundations in the McHenry County area have already donated about $375,000 to the Food Shed.
Foszcz said the group is feeling out the hiring market for a general manager of the cooperative, should it continue moving forward.
“The profile of a typical food co-op member is someone who is a strong advocate for local farms using sustainable agricultural techniques,” Scott Brix, vice-president of the Food Shed and a McHenry County resident, said in news release. “Owner-members also value supporting the local economy, providing access to healthy local food and protecting the environment by reducing the distance food travels, thereby reducing carbon emissions.”
Woodstock Mayor Mike Turner spoke at a fundraising event for the Food Shed group earlier this month and was joined there by Crystal Lake Mayor Haig Haleblian.
“I didn’t take an official position on investing in the Food Shed co-op because I can’t and shouldn’t, but at the same time, I thought it was a worthwhile opportunity for the city and we couldn’t be more thrilled that they’re looking at Woodstock,” Turner said to other Woodstock officials. “They’ll see if they raise their money. They’re pretty optimistic, and it looks like it would be a terrific thing for the city.”