Fort Collins Food Co-Op turns financial corner

FORT COLLINS — Just two years ago, things were looking bleak for the Fort Collins Food Co-Op.

The venerable downtown store at 250 E. Mountain Ave. was floundering — losing money and on the verge of shutting its doors.

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“We had about two months of capital left at that time,” said Lynn Chriestenson, store manager, who had just taken over the reins about two months earlier. “The staff was worried they might not have jobs much longer.

“But we’re still here,” Chriestenson added with a smile.

That’s because the store’s members decided to chuck the old membership fee model — with members getting a discount on the items they purchased — for an ownership structure with shares of the co-op sold to member-investors.

Chriestenson said about 90 percent of co-ops in the nation now use such a structure. As it turned out, joining that movement was the right choice for the Fort Collins Food Co-Op, which posted a profit in 2010 for the first time in years.

Food Co-Op members and others who support the store’s emphasis on organic and locally grown foods ponied up $160 per share to get a piece of equity in the store. Chriestenson said she’s grateful for that support.

“Their promise was profit-sharing, but they did jump in knowing we hadn’t made a profit for a while,” she said.

Overwhelming response

In fact, the response to the new business model was phenomenal, Chriestenson noted.

“The response was overwhelming to us,” she said. “We expected it to be much less than it was. We’re continuing to sell shares and we’re doing it every week. I think in February we sold a new share every day.”

Chriestenson said the store has sold more than 850 shares and sales are up. The completion of the Mitchell Block building next door — which had hampered sales in 2009 during its construction — has helped, she added.

“The building enhanced the whole area,” Chriestenson said. “We’ve got the parking back (from construction activity), but we lost so many people at that time.”

Grant Morgan was one of those who jumped in to buy some shares in the new business model. Morgan was one of the store’s first volunteers who ran the store for its first eight months after it opened in 1972. He said he was concerned that the store might not make it without a big change in its operation.

“Even though I was a lifetime member, I bought some shares,” he said. And when the store posted a profit? “I tried not to take it, but (Chriestenson) said, ‘take it.’ I was thrilled.”

Morgan said a growing popularity of supporting local agriculture — a long-standing hallmark of the Food Co-Op — helped turn things around, but he also gives Chriestenson credit for stepping in at a tough time and making it work.

“Lynn was a new manager then and started the shift to where things are now, so I think the new management was a big part of it,” he said.

Chriestenson acknowledged the Food Co-Op still has a way to go before it is truly prospering. She notes two factors in particular — a lack of parking and the cramped 35-plus-year-old space — sometimes make it difficult for shoppers.

She said a planned downtown year-round indoor market might be the answer to resolving those hurdles.

“It’s probably a couple of years out, but I think that’s where we’re headed,” she said.

DDA project

The indoor food market concept, which would feature farmer’s market items throughout the year, has been put forward by the Fort Collins Downtown Development Authority.

Matt Robenalt, DDA executive director, said the indoor market would likely feature the Food Co-Op as the anchor, giving it a year-round retail food presence. Other participants could include the Colorado State University Extension Service, which holds summer farmer’s markets in the Larimer County courthouse parking lot, and Be Local Northern Colorado, founder of the winter farmer’s markets held in the Opera Galleria.

Robenalt said three possible downtown locations are currently being eyed, including Northern Colorado Feeders Supply, 359 Linden St.; Whistle Clean Car Wash, 243 N. College Ave.; and Block 23, a bank-owned property in the 300 block of North College.

The Feeders Supply site is for sale for $5.8 million, Robenalt said, and the other properties will likely be more expensive. He said funding for the project is the main challenge. The DDA’s revenues were reduced 63 percent in 2008 as part of a compromise with the state Legislature that renewed the district’s taxing authority through 2031.

Robenalt said the Food Co-Op’s firmer financial footing made it possible for the store to consider being the indoor market’s anchor. “They’re already great retailers and have demonstrated a good turnaround and they’re looking to expand, so it presented a very unique opportunity for them to provide that seven-day-a-week retailing presence,” he said.

Robenalt said because of the DDA’s limited ability to help fund the indoor market, it will depend on partners like the Food Co-Op to help get the idea up and running. He said all the potential players in the indoor market will have a role in making it happen.

“Each is coming at the project with a strong interest to be involved, but also wanting to be sure the things they’ve accomplished over the years remain viable and it’s a true partnership,” he said.

While there’s no definite timeframe for the indoor market, Robenalt said the DDA “would like to see it happen in the next two to three years.”

Meanwhile, the Food Co-Op will go on at its present location, providing organic and locally produced items to members and the general shopping public alike.

Chriestenson said the store’s future looks bright.

“It’s been two years of a huge amount of work for all of us, but it paid off,” she said.