Perhaps more than this article in the Hyde Park Herald (click it while you can; when the next issue comes out, it will be gone from the web forever!) lets on, it seems. The Co-op has already lost its 53rd street and 47th street branches, and the neighborhood’s ability to feed itself is intimately tied up in the fate of the ailing 55th street flagship. Now, why would a crappy, overpriced grocery store with a virtual monopoly over a relatively wealthy neighborhood, which itself is at the center of a giant food desert, be losing money? Maybe it’s the crappy part! Actually, maybe it’s the fact that they have to pay rent on the shuttered 47th street location for another 16 years! And the building’s owner is also the grocery’s supplier, so they’re totally stuck. This strikes us as pretty stupid.
Anyway, the Co-op is over a million dollars behind in rent to the University of Chicago, and the Herald article runs down its options: take out a loan, renegotiate with the U of C (a historically losing proposition for neighborhood businesses), or file for bankruptcy. Since it’s a co-op, the decision on what to do next will be put up to a vote in around a week and a half.
But an email that the University of Chicago sent around to Hyde Parkers seems to imply that even if the Co-op’s debt is relieved, it may not be enough to save the supermarket:
…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.
Perhaps more than this article in the Hyde Park Herald (click it while you can; when the next issue comes out, it will be gone from the web forever!) lets on, it seems. The Co-op has already lost its 53rd street and 47th street branches, and the neighborhood’s ability to feed itself is intimately tied up in the fate of the ailing 55th street flagship. Now, why would a crappy, overpriced grocery store with a virtual monopoly over a relatively wealthy neighborhood, which itself is at the center of a giant food desert, be losing money? Maybe it’s the crappy part! Actually, maybe it’s the fact that they have to pay rent on the shuttered 47th street location for another 16 years! And the building’s owner is also the grocery’s supplier, so they’re totally stuck. This strikes us as pretty stupid.
Anyway, the Co-op is over a million dollars behind in rent to the University of Chicago, and the Herald article runs down its options: take out a loan, renegotiate with the U of C (a historically losing proposition for neighborhood businesses), or file for bankruptcy. Since it’s a co-op, the decision on what to do next will be put up to a vote in around a week and a half.
But an email that the University of Chicago sent around to Hyde Parkers seems to imply that even if the Co-op’s debt is relieved, it may not be enough to save the supermarket:
From: Hank Webber < hwebber@uchicago.edu>
Date: Nov 7, 2007 10:24 AM
Subject: Hyde Park Co-op
To: University of Chicago Community
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.
