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Park Slope Food Co-op Launches Loan Program to Start Similar Groceries

By Leslie Albrecht | November 11, 2013 6:33am
 The Park Slope Food Co-op is launching a loan program to help start similar co-ops in Brooklyn and beyond.
The Park Slope Food Co-op is launching a loan program to help start similar co-ops in Brooklyn and beyond.
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PARK SLOPE — They're the Johnny Appleseed of food co-ops.

The Park Slope Food Co-op will soon be sprinkling seed money in Brooklyn and beyond to help sprout similar member-run groceries. The co-op recently launched a loan program that will dole out $20,000 low-interest loans to groups that want to start food stores based on its model.

Members voted to create the lending initiative because they wanted to replicate the co-op's unique elements elsewhere. The grocery gives shoppers deep discounts on food — much of it organic and local — in exchange for sweat equity. All members must work two hours and 45 minutes every four weeks, and only members can shop there.

Though that way of doing business has proven successful in Park Slope — the co-op boasts about 16,000 members and just celebrated its 40th birthday — it's very rare, said Park Slope Food Co-op general coordinator Ann Herpel.

In the 1970s, many co-ops followed the Park Slope paradigm, but most of those have died out. Only three of the 500 food co-ops in the United States use the same labor-driven approach, Herpel said. Other co-ops let shoppers pay for memberships with money, instead of work, and they allow non-member shoppers.

While it's unusual, co-op members see their store as a model worth cloning, and they're hoping the loan program will help do that.

"It builds a different kind of co-op community," Herpel said. "You're not just paying some money to belong, you actually have to give something else that's probably more valuable, which is time. We think that helps to strengthen the community here."

The Park Slope food co-op sells food at a 20 to 40 percent discount, but that wouldn't be possible without member labor, Herpel said. The co-op has 70 paid employees, but its workforce would balloon to about 300 without member elbow grease, Herpel said.

There are national nonprofits that give loans to start-up co-ops, but they don't encourage groups to use the Park Slope method, said Rachel Porter, a member of the co-op's loan committee.

"They think the Park Slope Food Co-op is just an aberration," Porter said. “They think it’s an unusual case of very committed people who are very like-minded, and that most communities can't sustain it."

It's also tough for groups that want to copy Park Slope's people-powered structure to get loans from commercial banks, which are reluctant to lend to such an unusual business, Porter said.

Under the co-op's loan program, recipients will be screened based on their viability. They'll submit a business plan, financial information and projected income, as they would with any business loan application. The loan committee will also make a site visit.

Loan money can be used for start-up costs such as a rent deposit, commercial refrigeration units or interior construction work. Launching a co-op from scratch takes a major investment — the estimated initial costs are $250-285 per square foot and a minimum of three years of work, according to national nonprofit Food Co-op Initiative.

The co-op plans to make its first loan by the end of this year. The recipient hasn't been officially selected yet, but the dollars will go to a group in Brooklyn. The program will be expanded beyond the borough into New York City and elsewhere in the coming years.

In addition to cold hard cash, the Park Slope Food Co-op regularly dispenses advice to fledgling co-ops around the country and globe. Herpel, who's worked at the co-op for 10 years, has advised co-ops in Jerusalem, Copenhagen, Poland and Berlin.

Next month, a group from Paris will visit the Park Slope mothership. With help from Park Slope Food Co-op leaders, they've been working for three years to establish a "supermarché collaboratif" in the French capital. The group recently launched an online fundraising campaign to finance its move into a permanent space.

But unlike co-op organizers in the United States, the French group has the support of its government — city officials are helping them find a retail space. 

"It somehow resonates with something about French culture and ideals of community,” Herpel said. “They have a totally different attitude."