Let’s Grow
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Iowa City
Let’s Grow in Iowa City! At New Pi, things have never been so exciting. Thanks to your support, we’ve been able to take New Pi far beyond groceries: investing more back into our community, local economy, and educational outreach—and strengthening the roots of our Co-op.
Strengthening our Roots: Partnerships with Local Growers School Gardens & Compost Projects Community Gardens, Cooking Classes, & Education Community Sponsorships & Donations Neighborhood Beautification Organic Agricultural Production Passion for the Environment Employee Health and Working Conditions
Let's Grow in Iowa City! Dear New Pioneer Food Co-op Members: On behalf of the New Pioneer Board of Directors, I am writing to you once again for authorization to support the growth of our retail operations—this time in Iowa City. A few months ago, a local developer approached us with an innovative idea for relocating our downtown store. Our planning committee then obtained enough details for us to be intrigued and to actively pursue this idea. The proposed development would include space for a New Pi store with slightly more retail space than our current store on Van Buren Street. If the project goes forward, a new building would be constructed sometime in the next two-three years. The development will require the support of the Iowa City Council and, though preliminary conversations with City representatives have been very favorable, we know how complicated downtown development can be.
While the Board is committed to keeping a store in downtown Iowa City, we do not believe it is prudent to wait indefinitely to secure a downtown site outside the floodplain. We are therefore seeking a broader authorization. Help New Pi grow by giving the Board flexibility to expand our operations within Iowa City by either relocating our current Iowa City operation within the downtown OR opening a second store somewhere else in Iowa City.
Any decision with regard to location, size, and timing of a second Iowa City store would be based on the potential for sales growth and the opportunity to better serve our members and our mission.
We hope the following FAQ will provide answers to some of your questions. We will host two member meetings in December to take input and hear your opinions, concerns, and questions. In addition, you can email info@newpi.coop to direct a question to the Board. In co-operation,
Sarah Walz President New Pioneer Board of Directors
Learn more at our Member Meetings! Saturday, December 14, 10:00–11:00 Iowa Memorial Union, Lucas Dodge Room 125 N. Madison St., Iowa City Wednesday, December 18, 6:00–7:00 Iowa Memorial Union, Lucas Dodge Room 125 N. Madison St., Iowa City Regular Board meeting to follow the conclusion of the Let’s Grow Iowa City open forum
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Photos from left to right:
1971-1973, Bowery Street 1973-1977, Vine Building 1977-1987, 22 S. Van Buren, shared building with Goodwill 1987-present, 22 S. Van Buren, entire building Present storefront on Van Buren '
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FAQs Didn’t we already vote to approve a new store in Iowa City? The ballot that members voted on in 2012 authorized a relocation of the downtown store to a specific site: the corner of Gilbert and College Streets. The authorization was for that specific address only. The City’s decision to select a different project that did not include New Pi effectively ended that authorization. A subsequent vote this year authorized the Board to pursue one new store in either Johnson or Linn County. On October 1, the Board announced that New Pi had entered into an agreement to purchase property for a new store in Cedar Rapids.
Why are you coming back so soon after agreeing to purchase the Cedar Rapids location? A development proposed near the Iowa City downtown will be going public in the coming weeks. The development was conceived and designed specifically with New Pi in mind and the developer needs Board consent in order to include New Pi as part of the public presentation. However, as per New Pioneer’s Articles of Incorporation, we cannot provide consent without approval from the members. Member approval does not mean that the project will go forward. The developer will have to invest time and money in finalizing the various aspects of the
project. The authorization process from the City will take a few months. Adding construction time, the best-case scenario is for the building to be completed in twothree years. What can you tell us about this development? The project being proposed would provide about 10,000 square feet of retail space for New Pi, including seating for the deli area. 60-80 surface parking spaces would be available. New Pi would have control of the interior design and construction of the store. New Pioneer would be the first floor in a CB-5 development—a maximum of six stories tall. Upper floors would be principally residential units. Would New Pi own this store?
Current downtown Iowa City store proposal: Retail floor space: approximately 10,000 square feet (similar to our Coralville store) with deli seating and demonstration/classroom space Backroom space: 5,000 square feet
Many of the financial details need to be finalized and approved by the Board. Preliminary indications are that New Pi would lease the property from the developer for fewer than ten years at an agreed upon price that is very affordable. New Pi would also have an option to buy the property at a set price at the end of the lease period. This financial structure gives New Pioneer time to build cash reserves.
Parking: 60-80 spaces Entrance: front entry on College Street, with off-street parking via an open-air parking deck at the College Street level A maximum of six stories tall: New Pi would occupy the first floor; upper levels would be affordable apartment units and potentially some office space
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What if this downtown proposal does not go forward? While New Pi has long been committed to the downtown, the Board believes that our attention would necessarily shift to adding a second store in Iowa City. Again, the appropriate size, location, and timing would require further evaluation, but we
believe there may be options for New Pi in other areas of the community and will continue to investigate all opportunities. A “YES” vote on this ballot would give the Board three years to find a site for a new store. After three years, the authorization would expire. Where might a second store be in Iowa City? At this point we cannot say. The Co-op Board and management have studied a number of locations and all options remain on the table. That being said,
we will be guided by our market analysis, which considers travel patterns, density of housing, and a number of other factors. A new location needs to be one that can turn a profit within a few years.
will be using a combination of loans and savings built up over the past ten years to fund our current facility plan: purchase and renovation of the Coralville facility, purchase and renovation of the new Cedar Rapids facility, and an off-site food preparation facility to serve all our stores. Moreover, the purchase of the Coralville facility will result in savings over the current lease agreement.
Can we afford this right now, before the Cedar Rapids store is open? First, it is important to note that even if the City of Iowa City approves this proposal, and even if New Pi reaches an agreement with the developer, we would still be two-three years away from having a new store. In the meantime, New Pi
Purchasing a new store free and clear would cost several million dollars. Renting the proposed new downtown store for several years at a pre-negotiated FAQs continued on page 9
Flat Surface Parking Entrance from College Street
Store Front on College Street
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This site is just one possible location for a new site in Iowa City. This may or may not be the location we move forward with.
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Let's Grow New Pi in Iowa City Vote Procedures
You must hold a New Pioneer Food Co-op membership in your own name to participate in voting. • Only the shareowner may vote. Spouses and household members without their own shares are not eligible. Check the name on the mailing address of this publication, inquire at a store register, or call Sandy at () - to determine the name in which a membership is held. • To vote in the Let's Grow Iowa City vote, you must have been a member as of November , . • Mark your selections in the ballot on the next page, , with a pen. • Print your name, sign your name, and print address, phone number, and New Pioneer member number below your vote selection. Remember, your membership must be held in your name, and all fields must be completed, or your ballot will be invalid. • The ballot is a self-mailer. No separate envelope is needed. • Cut the ballot as shown ( ) and fold on designated lines. Tape at the sides (very important—DO NOT tape at bottom, the post office needs this free of tape), and mail or drop off at either store.
• Mailed ballots must arrive at the accountant’s office by December , to be counted. • You may also drop your completed ballot in a ballot box at either New Pioneer store until store close on December , to be counted.
: • ALL information on your ballot must be accurate. • Be certain to fill out your ballot completely. • Print your name. • Sign your name. • Print address and phone number. • Verify your member number.
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Ballots due
By mail: Dec. 28, 2013 In store: Dec. 29, 2013
Ballot
New Pioneer Food Co-op Vote to Grow in Iowa City For complete Resolution text, see pages and .
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Vote YES if you think New Pioneer Food Co-op SHOULD move the Iowa City store to a new downtown development or open a 2nd store in Iowa City. Vote NO if you think New Pioneer Food Co-op SHOULD NOT move the Iowa City store to a new downtown development or open a 2nd store in Iowa City.
vote is being taken to fulfill the requirement of the Articles of Incorporation to secure members’ permission to move ² This and expand the retail business of New Pioneer. A simple majority of YES votes will give the New Pioneer Board of Directors
All fields must be completed.
comprehensive discretion for a period of 36 months to relocate the Iowa City store to a location in downtown Iowa City or open a 2nd store in Iowa City. This ballot is your chance to help decide; there will not be a later vote on this matter.
Ballot will be opened and viewed by Bergan Paulsen & Company only. Results will be announced December 30, 2013. '
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FAQs continued from page 5 rate would lower our financial risk while we build up cash reserves. New Pioneer would then purchase the new building at the end of the seven-ten year lease period—again, at a pre-negotiated price. In terms of realizing sales, we believe that the relocation of the downtown Iowa City store is a relatively low-risk option, likely transferring consistent sales to a building in close proximity. In the short run, the Co-op’s overall profit would likely decrease, because a new store would be bigger and brand new, and therefore more expensive to own than our current facility. Considering the ongoing flood
risk, capped growth, challenging working conditions of the current downtown store, and the fact that our current building is poorly insulated and not at all energy efficient, the Board and management view this as a good investment. The option of a second satellite store, as we have indicated in the past, would be a riskier proposition that might take longer to realize a profit because we would be incurring higher costs and uncertain sales. We are studying the experiences of other co-ops, including those with smaller, neighborhood stores. We believe there
may be opportunities for this sort of expansion within Iowa City. Further study of our market and the performance of our new Cedar Rapids store would help us decide whether to proceed with a second store in Iowa City within the three-year window of this authorization. Again, this authorization would give New Pi a three year window to relocate the downtown Iowa City store OR open a second store in Iowa City–not both. This authorization does not require the Board to take either action.
Relocating or adding an Iowa City store would provide the following advantages: Leave the flood plain. The possibility of flooding is a strategic risk. Flash flooding presents a real danger to the store, and each time we must close due to potential flooding costs us thousands of dollars.
Provide a safe and enjoyable work environment for staff. A new store would alleviate many of the challenging working conditions of the current downtown Iowa City store.
Better serve our members. The Iowa City store is at capacity. While the new Cedar Rapids store and renovations to the Coralville store will alleviate some stress, the proposed relocation site would provide (as could a second store in Iowa City):
Operate a more environmentally friendly store. Our current Iowa City building is nearly 70 years old, poorly insulated, and not at all energy efficient. A new facility would provide meaningful gains in energy efficiency and sustainability.
additional space for products ample parking deli seating classroom/demonstration space
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Vote ‘Yes’ or ‘No’ on This Resolution (see Ballot on page 7)
NEW PIONEER’S COOPERATIVE SOCIETY RESOLUTION OF THE MEMBERS OF NEW PIONEER’S COOPERATIVE SOCIETY APPROVING AN EXPANSION AND/OR RELOCATION OF RETAIL BUSINESS OPERATIONS
WHEREAS, the New Pioneer’s Cooperative Society (the “Cooperative”) is a cooperative association organized under Iowa law with all associated powers and rights; and WHEREAS, the Cooperative’s Articles of Incorporation (“Articles”) provide that its affairs shall be managed by its Board of Directors (“Board”); and WHEREAS, the Articles further provide that the Board shall not undertake any expansion to a new location or relocation of the retail business operations of the Cooperative without a favorable vote of the Cooperative’s members (“Members”); and WHEREAS, the Board has determined it is in the best interest of the Cooperative and its Members to pursue and implement opportunities for either (1) relocating the Cooperative’s downtown Iowa City retail business operations and activities to a replacement location in or near the downtown Iowa City area, or (2) adding a store location within the municipal boundaries of Iowa City, Iowa; and WHEREAS, the Board has called a Special Meeting of the Members to consider and vote on the following resolution (“Resolution”); and
1) relocating the Cooperative’s downtown Iowa City retail business operations and activities to a replacement location in or near the downtown Iowa City area (the “Iowa City Relocation Project”), and 2) adding a store location within the municipal boundaries of Iowa City, Iowa (the “Fourth Location Project”). The Iowa City Relocation Project and the Fourth Location Project are hereafter referred to individually as a “Project” and together as "the Projects”. Section 2. That after conducting reasonable investigation and due diligence the Board be and is hereby authorized in accordance with this Resolution to select and implement one, but not both, of the Projects. Section 3. That the Board be and is hereby authorized to from time to time do any and all things necessary and appropriate, as it may reasonably determine, to: A. investigate the operational, financial and general feasibility and appropriateness of the Projects;
WHEREAS, notice of the Special Meeting of the Members has been given, and ballots for the Resolution have been issued, in accordance with the Cooperative’s Articles and Bylaws.
B. enter into discussions and communications for purchasing, leasing, designing, constructing, fixturing, equipping, furnishing, decorating, operating and/or financing any and all aspects of either or both of the Projects;
NOW, THEREFORE, BE IT RESOLVED by the Members of the Cooperative as follows:
C. determine the appropriateness of proceeding with either Project;
Section 1. That the Members approve the Cooperative, through its Board and Executive Officers, investigating and performing due diligence relating to opportunities for:
D. select one of the Projects, if either, to implement (the “Selected Project”);
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E. negotiate, enter into and perform all contracts, instruments, obligations, mortgages, pledges and other agreements and acts as may be necessary or useful for the planning and implementation of the Selected Project including, but not limited to, the following: (1) acquiring, by purchase or lease, real estate, whether improved or unimproved, for the Selected Project; (2) designing, constructing, fixturing, decorating, furnishing, and equipping a new and/or existing facility for the Selected Project; (3) acquiring, by purchase or lease, equipment, furnishings and other personal property for the Selected Project; (4) budgeting and financing for the Selected Project; (5) insuring all aspects of the Selected Project; (6) staffing, stocking and operating the Selected Project; (7) moving any of the Cooperative’s equipment, furnishings, fixtures, personal property and/or operating activities to the Selected Project; and (8) retaining, relocating, selling, exchanging or otherwise disposing of the Cooperative’s real estate and personal property no longer needed as a consequence of the Selected Project; F.
authorize specific directors and/or officers of the Cooperative to execute and deliver documents and/or do all other things necessary or convenient to accomplish the investigations and due diligence for the Projects and the implementation of the Selected Project;
G. delegate tasks relating to the investigations and due diligence for the Projects and the implementation of the Selected Project to any one or more of the Cooperative’s officers, employees, contractors or representatives; and H. engage such appraisers, consultants, architects, contractors, engineers, realtors, attorneys, accountants and/or other professionals as may be advisable or useful in connection with any aspect of the investigations and due diligence for the Projects and the implementation of the Selected Project. Section 3. That this Resolution shall become effective immediately upon the requisite approval of a simple majority of Members voting. If by the end of the thirty-sixth full calendar month following the month during which approval of this Resolution by the Members occurred (the “Investigation Period”) no written lease, purchase agreement, option agreement, real estate installment contract or other agreement (with or without contingencies) to acquire, lease or otherwise occupy space for the Selected Project has been entered into or is then in serious negotiation as so determined by the Board, then the authorizations contained in this Resolution shall expire. Only the Selected Project that at the expiration of the Investigation Period was under agreement (with or without contingencies) or in serious negotiations that culminate within six months thereafter in a written agreement (with or without contingencies) shall thereafter be authorized under this Resolution.
AS DUELY PASSED AND APPROVED BY THE REQUISITE MAJORITY VOTE OF THE MEMBERSHIP ON __________________, 2013, AS CERTIFIED BY THE UNDERSIGNED OFFICERS.
_____________________________________________ President
Attest: _____________________________________________ Secretary
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VOTE! LET'S GROW IN IOWA CITY! BALLOT ENCLOSED. VOTE! VOTE!
S. Van Buren St. Iowa City, IA () - open daily – ⁿ St. Coralville, IA () - open daily – www.newpi.coop Change Service Requested
"New Pi is a vital part of our community, and I want to see it continue to grow as the community grows. It is only a matter of time before a national chain like Whole Foods enters this market. I would like to see New Pi in a stronger position to meet such a competitive challenge. The downtown store has reached its capacity for growth. A new and larger space would mean greater possibilities for New Pi to serve the needs of an expanding local market." —Karen Nichols, New Pioneer Member “New Pioneer is a pioneer in the local food community. We support expansion because New Pi’s mission statement includes stimulating local agricultural production and increasing markets for local, organic farms like ours. As local produce growers, New Pi has offered our business opportunities not found with other retailers. As New Pi’s business grows, so does ours." —Andy and Melissa Dunham, Grinnell Heritage Farm
"New Pioneer is by any standard one of the most influential cooperative grocers in the Midwest. Their expansion is a needed opportunity to make healthful, sustainable foods, goods, and services—and the growers that provide them—part of Iowa’s agricultural trademark. New Pioneer is also regarded among its peers as a strong (fiscally effective) model of co-op management —no small feat in the food sector. As a longtime supplier to New Pioneer, Grass Run Farms fully supports New Pioneer’s continued growth and success." —Kristine and Ryan Jepsen, Grass Run Farms "It simply makes sense that New Pioneer NEEDS to expand. As more people discover the value of buying high quality healthy foods and supporting area growers, we will continue to see even more new members. We have to expand to support a healthy community!" —Ron Clark, New Pioneer Member