posted by chicago pop
Ahead of the membership vote on the Co-Op's future, Hank Webber has circulated a memo to University staff and faculty making the University's position clear.
From the University's perspective, it comes down to two options: either the Co-Op Board agrees to let the University buy it out, and pay off the Co-Op's creditors in the process, allowing the University to then try to bring in a new grocery store; or, as Webber says, "the chances of bankruptcy are very high."
Translation: the University may not stand by if the Co-Op membership decides to follow the Herald's advice (outlined in a delusional editorial today, November 7, 2007 ) and initiate a capital campaign, or any other, Terri Shiavo-esque life-support efforts. It would take a lot of folks throwing good money after bad to make up what the Co-Op owes, but that's beside the point.
Webber's letter (appended below) makes it clear that the University wants a functioning (and modern, clean, well-stocked) grocery store in the neighborhood, partly so that it won't lose faculty and students to competing Top 10 institutions that can offer these things. Bankruptcy is the long road to this goal. Debt consolidation is the short road, but it means the Co-Op membership has to sign on.
If they don't, chances are they'll help even more people lose even more money.
To: The University Community
From: Hank Webber, Vice President for Community and Government Affairs
Re: Hyde Park Co-op
You may be interested to note a story in today’s Hyde Park Herald ( http://www.hpherald.com/) about the future of the Hyde Park Cooperative Society. The story outlines a set of extremely challenging financial circumstances that threaten the Co-op’s ability to continue to operate its grocery store at 55th Street.
The Co-op’s Board of Directors has been in discussions with the University about a possible solution to these serious financial troubles. The board has spent many months considering various options. One of the options under discussion is an agreement among the Co-op, its creditors and landlords that would result in the Co-op closing, payments to its creditors, and a new grocer opening a store in the same location. The board also is looking at the possibility of obtaining a loan and the potential for bankruptcy if neither of the first two options proves feasible.
The University is supportive of the board’s efforts because we believe our community deserves to have a high-quality grocery store. If the Co-op cannot fulfill this role, then we are committed to facilitating a new grocery store coming to the 55th Street location.
Access to high-quality grocery shopping has a direct impact on the quality of life for our faculty, staff and students, and thus our ability to attract people to our community and retain them once they are here. In fact, when we surveyed our students earlier this year on their retail needs, the most frequently cited desire was for “improved grocery store service.” Having a successful store in this location would keep shoppers and businesses in the neighborhood and bring new business to surrounding retailers.
The University is the landlord for the Hyde Park Shopping Center which includes the 55th Street store. The Co-op currently owes the University approximately $1.2 million in unpaid rent. As part of the proposed agreement, the University has indicated its willingness to forgive most of the unpaid rent and to supply additional funds in order to substantially repay local vendors to whom the Co-op is in debt. These actions would permit the Co-op to close without the costly process of bankruptcy proceedings and allow a new grocer to begin operations within two weeks of closure. All current Co-op employees would have an opportunity to interview for jobs in the new store as part of the arrangement with a new grocer.
These actions will not happen unless all interested parties, including the Co-op board and its other major creditors, can come to an agreement on the terms. If an agreement is reached, the board has indicated its intention to put the proposal to a vote of the shareholders. If an agreement is not reached, the likelihood of bankruptcy is very high. In either event the University will remain committed to having a new, high-quality grocer at this site.
The Co-op board will discuss its final recommendation at a town hall meeting at 2 p.m. on Sunday, November 18, at the Hyde Park Neighborhood Club, 5480 S. Kenwood Avenue, Chicago. We expect there to be robust community dialogue about the board’s proposed course of action. More information will be available at www.coopmarkets.com.