The Belfast Coop is a cornerstone of the community in Belfast, ME. It is a place to meet, eat, buy groceries, and support local farms and vendors. If you're interested in saving the Belfast Coop then please continue to read this post and please consider donating.
The success of the coop up to this point has been unquestioned! It is always busy, and sales have now been over $10 million in the last couple of years.
But now, the coop is being plunged into incomprehensible debt. There is a renovation project that only adds about 1,000 square feet to the store footprint, and it takes away two parking spaces. But the project costs $6.4 million!!!
The project has started and if this project goes to completion, then it will be uncertain if the coop will make the loan payments.
That is not all. The manager and board of directors did not find the best deal for the coop. The coop is not a privately owned corporation. It is a cooperative. As such, the management and board of directors had a duty to find the best deal. They also had a duty to properly inform the member-owners. They have continued to push forward with the project even as the price has increased, the total bill after interest now looks like it will end up being well over $7.4 million!!!
There are two options for member-owners at this time:
1) Go to the savethebelfastcoop website to sign a petition
2) Donate money here to a "breach of fiduciary duty" lawsuit. The lawsuit will halt the project.
It isn't too late to halt the project. This first phase of construction with Farley and Sons was planned to only cost about $230k. We have to act fast.
Please share and inform other member-owners.
Details about donations:
Please donate here for a breach of fiduciary duty lawsuit.
"When someone has a fiduciary duty to someone else, the person with the duty must act in a way that will benefit someone else financially. The person who has a fiduciary duty is called the fiduciary, and the person to whom the duty is owed is called the principal or the beneficiary." -Cornell Law School
Details about the finances of the project:
Money in the bank= ~$900,000
Loan from member owners = ~$1,500,000
->Payments = 8, 10, or 12 year loans with 3, 3.5, or 4% (respectively) interest due yearly or at maturity. Principal due at maturity.
Loan from a private loaner = ~$4,000,000
->Payments = 10 year fixed 5.28% 25 year amortization with 12 months interest only
Total Renovation Cost = ~$6,400,000
Co-op Net Income avg. :
(from store sales over the past 5 years)
Renovation Loan est. :
Loan lasts for 25 years!
(Bank loan at 5.28% of $3.8 mil over 25 year
amortization. It is hard to calculate actual amounts
because only the first 10 years are fixed.)
@that rate the loaner will profit over $3 million!!
(Total interest= yrpaymentx loan term - loan amount=6,827,773.50-3,811,200=3.016 mil)
Images from Savethebelfastcoop.com. Some of the images are cut off, so go to the website for the full images:
This image about the finances is cut off so please go to savethebelfastcoop.com for the full image.