Friday, December 7, 2007

Leon Shernoff Warns: University Harvesting Organs of Co-Op Members

posted by chicago pop

Co-Op Insider Cracks University Plot, Then Goes Insane

Who is Leon Shernoff? If you don't happen to have your pack of Co-Op baseball cards laid out in front of you, he's the dude who puts together the Evergreen, the "Newspaper of the Hyde Park Cooperative Society." That's right, another astute journalistic organ based right here in Hyde Park.

Up until Vol. 60, #10, December 2007 of the Evergreen, it was a folksy and disarmingly honest little window into the dysfunctionality of a community-run commercial enterprise. (LIES!)

It's how we learned all the Onion-like details of daily management at the Co-Op over the years, like how decades-old POS equipment was aced by a devious squirrel, how various unionized cashiers absconded with untold thousands right under the noses of their altruistic managers, or how various vendors stopped returning phone calls from the Co-Op to service their products. (MORE LIES!)

But all that happy gem├╝tlichkeit seems to have evaporated with this last issue. Because in Volume 60, Number 10 of the Evergreen, Leon Shernoff has gone on a paranoid bender of epic proportions. (A NEW LIE EVERY DAY!)

We can only assume that the paranoia that got into this issue is only a fraction of the paranoia that has seized the rogue faction of the Co-Op Board, a minority that has somehow managed, despite their declared affability and simple interest in rutabagas, to shrewdly seize all outlets of communication from the majority and broadcast their strange and none-too-clear tale of intrigue, "illegitimate fact sheets" (FRAUDULENT RESEARCH!) and, best of all "University-sponsored identity harvesting." (BEWARE!)

What is identity harvesting, you ask? Let's ask Leon.

Identity Harvesting by the University
In their frenzy to smear the Co-Op, the university has even resorted to unethical means of information gathering. At the November 26th Board meeting, university administrator Jo Reizner attended and tried to guilt-trip the Co-Op with stories of how many shoppers were leaving the area to avoid shopping at the Co-Op. She said that an unnamed supermarket at Roosevelt Road keeps track of its customers via an identity card, and has shared that information with the university, leading to the revelation that shoppers from the 60615 and 60637 area codes spend about $100,000 a week at this grocer. She proudly revealed this research at the meeting, apparently unconcerned with the massive privacy and confidentiality violations involved.

Now let's step back a bit. You know that little magnetized fob on people's key chains, the one that says "Dominick's" or "Jewel"? The thing that gets you a discount every time you check out? Guess what? It has your ZIP code on it, information that you freely provided when you applied for the fob at Dominick's and Jewel so you could get the discount. Lots of people have one. Ever notice how the computer at the gas station asks for your ZIP code when you pay? (SPIES!) It's the same thing. Is it linked to your name, your Social, or any other privileged information? No. Is it aggregated and sold to market research firms? Yes. (STILL MORE LIES!) Is it part of how we know that millions of dollars a year are being spent outside of Hyde Park? Yes.

Is this unethical? Not at all. Are individuals' privacy compromised? Not in the least; this information is given with consent.


As for the $100,000/week spent at an unnamed Roosevelt Road supermarket, there's no news there, we've been talking about leakage at this blog for some time. And most of what we learned came from the Tribune, and they throw much bigger numbers around ("Delivery is oasis in food 'desert'." April 1, 2007).

Shernoff isn't too concerned about that $100,000 number. Why not? "[T]hat $100,000 is about the amount of business the Co-Op does on a Saturday."

Nice job, Leon, losing one day of revenue a week for 52 weeks of the year. Maybe this kind of indifference to losing money is why the Co-Op is insolvent, with twice pledged collateral, and can't get a loan.

By my calculation, that lost revenue amounts to $5.2 million annually.

And that's just money lost to one store. (DISTORTION!)

And it doesn't include all the money going into all those Peapod vans.

Wouldn't that $5.2 million in lost revenue alone be enough to solve most of the Co-Op's problems?



Elizabeth Fama said...

Is there some way to have the post label "bone-headed activism" automatically appended to every HPP post? That would save you some typing, C-Pop.

By the way, the checkers at Whole Foods on Roosevelt Road also punch in your zip code when they ring you up. If the U of C stats were referring to Dominick's and Jewel on Roosevelt Road, I want them to go to Whole Foods and tally that data, too! And I wonder if Peapod would "deliver" some numbers...

chicago pop said...

Whole Foods is in on the conspiracy to violate the privacy of Co-Op paranoiacs as well? Where will it end?

I wonder if the U of C has anything to do with getting people's private information listed in the phone book. LIES! MORE LIES EVERYDAY!

chicago pop said...

oh, and speaking of misinformation, Shernoff buys right into the byzantine nonsense originated by Withrow in his "Message to the Community", which he subsequently corrected on his blog but which remains uncorrected in the Evergreen, that the U of C waited until after the big community meeting to advance its ultimatum to accept Option A or lose it entirely.

So now the Evergreen is as guilty of spreading LIES LIES LIES as anyone else.

Famac said...

A zip code isn't an address.

LPB said...

Elizabeth -- that's a good idea to get a tally on how much is spent at the other food stores on Roosevelt by 60615/60637 residents. I know we shop at the Whole Foods, Jewel, and Target right there.

It would be great if Peapod could even let us know how many weekly deliveries are made to Hyde Park. I'm sure we can triangulate with the average tab from several neighbors who use Peapod and come up with a reasonable estimate for how much leakage is going to Peapod.

Some folks might believe that the $5.2 million in lost annual revenue to the Whole Foods on Roosevelt isn't a big deal. But, that $5.2 million spent at one store outside the neighborhood would have amounted to a 20.4% increase in the Co-Op's 2007 topline, if it had been spent buying Co-Op goods. Considering revenue growth at the 55th Street store has been a big fat zero over the last few years, I would question Bruce Brandfon's very cavalier dismissal of that lost revenue. He implies in the board minutes that leakage is inevitable, which makes me wonder whether he's genuinely interested in attracting any of the "leaked" customers.

In 2007, my household spent less than 1% of all its grocery dollars at the Co-Op (and that was only under duress). If Brandfon believes that 99% leakage is inevitable, then I'd like to hear his argument. If Brandfon seriously does not care about my potential patronage and trying to get more share of stomach from my family over Whole Foods and Jewel on Roosevelt, then the Co-Op deserves to wallow in further misery and I'll watch the implosion with great glee.

Gee, I guess that's what the Co-Op defenders mean when they assert that the Co-Op cares about the community members [heavy sarcasm] By minimizing the leakage issue, Brandfon is really suggesting that he could give a rat's ass about winning over customers like myself.

deep throat said...

Okay, the latest board minutes of the 11/26 meeting highlighted how one particular board member, Hope Mueller, is competely out of touch with reality.

"Hope Mueller then responded with some heat that the true problem isn’t the financial status of the store." Excuse me??!!! It's been clearly demonstrated that the Co-Op is insolvent and in financial distress -- President Poueymirou and Treasurer Lowenthal walked us through the numbers, explained the negative equity and how much the Co-Op currently owes various vendors and landlords. I've delved into an analysis of the Co-Op's dismal financial situation all over this blog (which apparently, Director Mueller is not reading, but would probably find informative).

Maybe Director Mueller should ask the Co-Op's thus-unpaid vendors and landlords what the "true" problem is. Hmmm, could it be the true problem is that the Co-Op CAN'T PAY ITS BILLS ON TIME?!! Just a wild guess on my part.

Who is this woman?!! What bizarre planet has she been living on in the last three years? And why is she even qualified to be on the board of directors when she obviously is unable to grasp the significance and magnitude of the Co-Op's financial problems?

Director Mueller must have eaten one too many of the hallucinogenic mushrooms that Leon Shernoff has hunted down.

Richard Gill said...

Chicago Pop - I note that your post was made at 2:33AM (PLOTS HATCHED IN THE MIDDLE OF THE NIGHT). You mention that it appears a rogue faction of the Co-op Board has seized all avenues of communication. I think "hijacked" is a more descriptive term. The December everGreen is evidence of an organization gone unhinged. One might have thought that the Co-op's house organ would be scrupulously neutral during a membership voting period. And, by the way, how did a paper that can't seem to get published on time manage to get on the street so early in December? Could it be that the rogues want to influence the election? (SKEPTICISM, BLASPHEMY).

Anyway, here's a personal anecdote from earlier this week; I like to call it "Stopping by Co-op on a Snowy Evening." I went by the Co-op to drop some money in the Salvation Army kettle. (IMPOSTOR POSING AS GOOD CITIZEN). I also was interested in seeing what literature was being handed out with regard to the election. (SPIES SLINKING AROUND).

As usual this time of year, the Co-op was redolent of paleo-liberal communitarian mirth and merriment. A man (not in a Santa suit) was handing out Co-op pledge cards. He offered me one. My first impulse was to say, "Are you f---ing kidding me?" However, in the spirit of the season, I got a grip on myself, declined in a civilized manner and headed home. Even the squawking walk sign at 55th & Lake Park didn't bother me; I had spread glad tidings and was quite pleased.

chicago pop said...

Hope Mueller is living on the planet called the "HYDE PARK NO-RENT ZONE", where, although gravity still applies, payment obligations to landlords (EVIL!) do not.

In fact, defaulting on rent payments is the more moral option!

deep throat said...

Makes me wonder if Director Mueller has decided to take the "more moral" stance of stopping her mortgage payments. I'm sure if she also stops paying ComEd, Peoples Gas, her phone service provider, and any credit card balances that will make her the most moral person in Hyde Park. Certainly more moral than me because I pay my bills in-full and on time.

Peter Rossi said...

great post. but frankly the original evergreen article might be the most effective proof that this person is insane.

unbelievable! The idea here is that the only way I can call attention to my position (which is a position after all not a way of life) is to fabricate conspiracies and then simply assert them as truth.

We say the same tired strategy applied by the save the pointers who saw the city as a pawn of the concrete industry!

SR said...

I think "hijacked" is a more descriptive term. The December everGreen is evidence of an organization gone unhinged. One might have thought that the Co-op's house organ would be scrupulously neutral during a membership voting period.

This issue of the Evergreen is just an utter disgrace to everyone associated with it. Yes, as a house organ it should indeed reflect the range of opinion of the entire board, and yet if you didn’t read it carefully, you would easily get the impression that the entire Board has undergone a sea change and is now officially endorsing option B as a body.

If you do read carefully enough, you’ll come across a comment (buried in one of Withrow’s pieces, I think) stating that pro-option A members were asked to write opinion pieces for the issue, but didn’t turn anything in by the deadline. How long were they given, one wonders? A week? Two days? Three hours? WEAK.

Plus, random white space that would normally be filled with neutral PSAs or generic announcements instead is used to exhort members to make pledges for the Coop (this may not be evident in the online edition), again as if the Coop is officially endorsing that option.

This kind of bs will be familiar to anyone who has ever dealt with the “who in the alleged collective stayed latest at the office” politics at your average college lefty paper staffed by warring ideological factions. Okay, maybe that’s not the world’s most common life experience, but I’m sure you can imagine, and I’m kind of shocked to see it coming from grown-ups, I thought it was purely a college thing.

chicago pop said...

What do the Bush Neocons and the Option B'ers have in common?

*The Neocons say all Iraq needs is more time and it will all work out.
*Option B'ers say just give us more time and it will all work out.

*The Neocons say just look at how well the troop surge is working!
*The Option B'ers say just look at the wonders Brandfon is working!

*Both have been effed-up just as long (that's charitable; the Co-Op has been effed-up longer than Iraq)

And finally ---

*The Neocons say: give us more money. We'll pay you, the Iraqis, US taxpayers, someday...
*The Option B'ers say: give us more money. We'll pay you back, shareholders, landlords, small vendors,maybe...but who needs money anyway?

chicago pop said...

I forgot one more commonality between the Bush Neocons and the Co-Op Savers:

Both are doing it in the name of democracy!

They are tearing down something that has the potential for being as great as we are willing to make it. If we can save the Co-Op it will be a sign that democracy is still alive in our world. -- Jean Callahan

Alec Brandon said...

Can someone please explain to me what is going on with this alleged 2.5 million dollar loan that the everGreen discusses briefly and the Co-Op is also claiming is on the table.

I don't really believe anyone would give them a loan, particularly the same bank that denied them a loan two weeks ago.


chicago pop said...

I've asked deep throat to dig around a little bit on this, but I'm afraid we're as much in the dark as you are re: the "commercial loan".

Unless anyone out there has more info.

Like so many things, the inner workings are murky, despite calls by the activists for transparency.

If you guys come up with anything, let me know and we'll link to it wherever you put it.

ps: enjoyed your reflections on improving safety in Hyde Park, comparisons with New Haven, etc.

chicago pop said...

The latest "editorial" in this week's Herald, by absentee-owner Bruce Sagan, partakes of the same stew of fantasy that has got folks thinking that there is a way out of the Co-Op's financial troubles that is painless, quick, and easy. A "Third Way."

In fact, there is no such thing. What is interesting at this stage in the debate is the way clear statements and understandings of the financial contraints involved have disappeared. Sagan's editorial has no details, just promises that a loan can solve problems, and the University is nefarious.

Likewise, the rhetoric that this issue is a moral one, allows an evasion of the economic constraints.

The Co-Op's own propaganda in the Herald suggests that Option B will somehow preserve the Co-Op intact as it is currently structured, when even Stanek has admitted that this is very risky and may not happen.

Assuming there even is a commercial loan on the table, loans come with interest, and a small default could lead immediately to Chapter 7 liquidation.

Nothing -- repeat, nothing -- about the financials of this institution and its extremely tenuous hold on life has changed since they were analyzed both here and elsewhere. Certified, the bad cop in the story, has shown no sign of compromise, but the anti-University rhetoric makes no acknowledgement of this -- which is how it reveals itself to be ideology, and not real policy.

To his credit, Board President Poueymirou has never dodged any of this; never suggested an easy way out; downplayed the risks of Option B and bankruptcy, or the likelihood of a commercial loan on favorable terms. He has always kept the economic reality of the situation up front. A lot of Co-Op supporters don't like to think about economic constraints, and so would rather blame the landlord, capitalism, or some other bogeyman.

The degree to which the conversation has drifted away from the financial reality of the Co-Op's predicament is an index either of the desperation of the Co-Op savers, or of their blind inability to understand what they are doing.

If the latter, it wouldn't be the first time.

deep throat said...

Alec, I'm also furiously trying to learn more about this late-breaking commercial loan that has come out of the woodwork. I can tell you that it's very likely that the Co-Op will be paying through the nose for this loan, considering its weak financial position and the fact that its pledgable collateral has already been pledged twice over to others.

Rates for commercial business loans typically cluster between 8% and 10%. In the Co-Op's collateral-less case, I'm guessing it is securing this loan on the promise of its future cash flows. This obviously riskier than hard assets, so the bank will likely charge in the 11-15% range for the loan.

One open question in my mind: Option B originally aimed to get enough of a cash infusion that the Co-Op could pay Certified a penalty to get out of the 47th Street lease and enough working capital to find a replacement for Certified as the Co-Op's primary distributor.

Will this commercial loan still accomplish that goal of kicking out Certified?

Also, is Option B still all about bankruptcy? The NCB's commercial loan does not involve Chapter 11. So, for all folks who are encouraging members to vote for Option B, what are they really voting for? They've characterized Option B as "saving the Co-Op," but aren't clear on whether this still about bankruptcy.

I also speculate that the board is trying very hard to negotiate with Certified on a buyout of the 47th Street lease and the University on repayment of the $1.2 million in back rent, since the commercial loan is contingent upon resolution of these two issues.

Again, I'll reiterate my desire to see the pro forma financials that Director Stanek came up with to better understand how the $2.5 million loan will be used, and his projections for how the Co-Op will pay back the NCB.

How is this loan structured? Will the NCB include a stipulation that makes it the most senior creditor? Would the Co-Op end up sending most of its $800,000 annual profit from the 55th Street store to the NCB instead of Certified? What would the consequences be if the Co-Op missed any loan payments?

At least it's unlikely that the NCB would shove a bunch of wilted produce at the Co-Op. And, if the conditions are ripe, maybe the Co-Op could just stop repaying the loan in the future, in the interests of staking out the moral high ground in Director Mueller's bizarro world.

SR said...

In other reality-based news, there are some interesting comments about the U of C's willingness to go along with option B here. I'm not sure if that would really torpedo the whole plan or not as the Maroon editors seem to think, though.

chicago pop said...

In answer to Alec Brandon's question regarding the commercial loan: after re-reading the Herald, my understanding is that this loan has been on the table for some time, but depends on a structured arrangment with Certified, whereby the latter would agree to be bought out of 47th including future rents and other obligations.

There is no sign of Certified agreeing to this.

Once again, the anger directed at the UofC is heavily conditioned, and fails to register this aspect of the dilemma.

Famac said...

How does one go about getting the Evergreen? I get the Herald advertising sup, but no Evergreen. But everyone else seems to have a copy!

I remember walking through the Co-Op during the Reagan years thinking "this looks a lot like things people are ridiculing in the Evil Empire."

Now I know a bunch of you are younger than me when the Co-Op was even worse, so I ask you; how does one get a sub to the Evergreen?

Alec Brandon said...

Thanks everyone for the information on the loan.

Famac, the everGreen, in all it's glory, can be found on the Co-Op's website:

PS Everyone see that contributions are now up to 36,000 for the Co-Op? They just have another $764,000 to go!

Elizabeth Fama said...

famac: the Evergreen is sent to Co-Op members. Not receiving one is a badge of honor.

(I ran into the Co-Op once a couple of years ago -- under duress, as lpb points out -- and when asked if she had a membership number, the woman ahead of me in line proudly said, "No, I am not a member, thank you." That's when I decided to cash in my shares.)

Famac said...

That was kind of my point: how do people get suckered into buying memberships?

My mom used to shop at the Jewel on Palaski when I was in High School (1977-1981). It was so amazing compared to the Co-Op -- just in terms of size. She took a long time shopping so I got familiar with the prices of things.

I remember walking through the Co-Op to buy this and that afterwards thinking "so, I'm supposed to buy a membership to get money back on groceries that are way higher priced than the jewel?"

It seemed pretty simple math at the time, and I was just a punk kid.

Of course, dividends from Co-Op shares probably never amounted to the $36,000 they have in contributions currently.

SR said...

Well, when I joined, my thinking was that if I was stuck paying the high prices (which I was, being carless long before the advent of Webvan and then Peapod, which for a long time didn't deliver to Hyde Park), I might as well get some of the money back on dividends and member discounts.

I haven't of course (it turned out I'd rather open my own wrists than deal with members-day lines, and of course all reported dividends are now imaginary), but I believed I would when I joined.

Of course we easily save about the value of a Coop membership in a month's worth of shopping at Dominick's instead of the Coop (using a friend's car), which made the repeated assertion in the Evergreen that members would--oh noes!--lose their share values and realize "no benefit" from having a Treasure Island or Dominick's right in the neighborhood seem pretty unbelievably clueless.

I'm beginning to think the Coop's diehard supporters are all people who have never actually been in any other grocery store in their entire lives.

Famac said...

It would be interesting to see the Co-Op's capital contributions broken out individually. Is it 100people or is it 10 willing to lose another $36,000.

Now, I have to say I went in the Co-Op the other day and it seemed cleaner than it has in the past, but it was 8 in the morning.

But here's my question: how did they attract Bruce Brandfon to the Co-Op? I seem to recall the guy left a job to come here. I find that hard to believe, unless he made no effort whatsoever to look at the store's financial state.

Who would move to take a job where the prospects of being unemployed were potenyially months away?? It would be interesting to see his contact.

Raymond said...

5% discount on Member Days and the member coupons. That was the only reason to join.

And, memberships only cost $10 when I joined. With the 5% discount, it paid for itself after a while.

Now, the extra shares I bought over the years. For that, I should have my head examined.

Richard Gill said...

sr - In response to your comment of December 8: the Co-op's diehard supporters presumably have not bought groceries outside of the Co-op since the Great Depression. I believe they would also be perfectly happy buying groceries at the single commissary on an army post. They would be lost in a real supermarket.

But we are missing the point in thinking of the Co-op as a grocery store. It is really a "democratic center of community involvement" that happens to resemble a grocery store. If you don't believe me, check out for some true enlightenment. The diehards, it seems, would have us believe that the Co-op is the one true participatory forum in all of Hyde Park, from border to border, from sea to shining sea. COME ON, Co-op Diehards, Hyde Park has more participatory outlets than any neighborhood in the entire Known Universe. We don't need the Hyde Park Co-operative Society for THAT.

Elizabeth Fama said...

Raymond, take it easy on yourself. I'll bet you didn't willingly buy extra shares over the years; at least I didn't. In lieu of handing out dividends over the course of a couple of decades, the Co-Op "reinvested" for us, and purchased extra shares for our accounts, up to a cap of $300.

Raymond said...


You're kind, but at least some of those shares in my account were actually willingly-purchased extra shares. When I first joined, I bought into the "we're supporting the people's store" hype and all that. I was young and crazy, what can I say?

Ptah said...

Mr. Gill's insight on the way some think of the Co-Op is interesting and compelling. I can't think of a better synopsis.

I also blame youthful thinking for my share. Among my cohort of students, it was fairly common to "buy in" to both the Hyde Park Co-Ops.