Update to Member-Owners

October 5, 2010

Dear fellow Member-Owners of Urban Greens Food Co-op,

2010 has been one of the most exciting years yet for Urban Greens Food Co-op. We’ve been getting our message out in the community more than ever, and have reached 230 member-owners! Gaining member-owners is the only way the Co-op will be able to open its doors, and this year has been very successful in that regard. Thanks to all of you who have helped out and spread the word along the way.

As most of you are aware, for many years the Co-op has been in negotiations with the West Broadway Neighborhood Association (WBNA) regarding locating our store in a building that is currently being constructed at 1577 Westminster Street. We are writing today to let you know that the Co-op will not be able to locate at 1577 Westminster St.

Earlier this year, the WBNA asked the Co-op to sign a written agreement they drafted regarding locating at 1577. Among other things, the agreement stated that the Co-op would open “as soon as construction is completed,” and that several tens of thousands of dollars towards tenant fit-out costs would be due in Fall 2010. Over the past several months, the Co-op made numerous attempts at negotiating this agreement, proposing alternative scenarios and seeking grant funding to support those scenarios. Despite our best efforts, negotiations with the WBNA were unsuccessful.

The two main reasons the Co-operative Council was unable to sign the agreement are: timing and feasibility.

1. Timing. Current projections indicate that the Co-op needs 600 to 1000 founding member-owners before we can open our doors. After reaching this critical mass of member-owners, we need to complete a member-loan drive, and then secure outside financing from banks and alternative lenders. Through our Spring 2010 membership drive, we learned it is possible to add more than 100 new member-owners within the span of a few months. While the membership drive brought us tremendous momentum, positive energy, and success, the WBNA expects construction on 1577 Westminster St to be completed in January 2011 and full retail operations to begin within the same month. It is simply not possible for the Co-op to secure all of our financing and open a full retail store in time for a January 2011 opening.

2. Feasibility. Many of you are aware that the Co-op conducted a market study in 2007 that produced sales projections for various potential store locations. The space at 1577 Westminster St was determined to not be an ideal location for a co-operative market based on its small size and low number of parking spaces. In order to better understand the feasibility of a co-operative market at that location, the Co-op tested the scenario using a financial pro-forma (10 years of financial projections of the store’s operations) in 2009. Commercial banks we met with stated that they would need to see these 10 years of financial projections and to know that the business would break even within its first year of operation in order to begin generating profits that would pay off the loans. The financial pro-forma was prepared by a consultant with over 20 years experience with co-ops and indicated that a co-operative market at that location would not break even until at least its fifth year of operations. With these projections Urban Greens would not be able to secure the necessary financing to open, and would therefore not be feasible at this location.

Each member-owner of Urban Greens Food Co-op has made a financial investment as well as a personal one. Member-owners are the foundation on which food co-operatives are built. In guiding the co-operative, it is the utmost responsibility of the Council to respect and protect the member-owners’ investments. We will not commit our member-owners’ investments to a business that is not projected to be feasible. Please know that we will not commit the Co-op to any financial agreements unless we are confident of success.

Urban Greens Food Co-op remains committed to opening a retail store that will meet our community’s needs for affordable, healthy, local, and natural food. We are committed to locating on the west side of Providence in a location that will ensure the business will be able to exist for many years to come. We invite full participation by all member-owners in shaping a store that will meet the needs of our community. The best way our member-owners can help is to get involved and to spread the word about buying a share! To be informed of volunteer opportunities and to share your talents, you can sign up at UrbanGreens.com/GetInvolved

If you have any questions please contact us at: info@urbangreens.com or (401) 267- UGFC.

The Urban Greens Co-operative Council

Hillary Adams, Corey Auger, Bridget Dignan, Kristin DiVona, Carey Jones,Stephanie Obodda, Craig O’Connor, Deborah Rosenberg, Michelle Sheehan