Building purchase provides stability, expands possibilities
by Chris Maher, General Manager,
By now, I’m sure most of you have heard the exciting news that BriarPatch has purchased our site and building. I am deeply appreciative of the many people who contributed to making this hugely significant milestone possible. There are simply too many to list, but they include our dedicated staff and managers, Board members past and present, and our team of owners and industry experts who worked on or with our Development Team throughout these past two years.
Even way back in 2004, when we first began plans for building the Sierra College store, we also began to explore ways we could own it. At the time, we did not have the financial capacity to do this on our own, so the store was developed in partnership with Calloway Development. At the outset, our lease included a purchase option. When the window to act on this option opened between 2010 to 2012, though, we were still not in a position to take advantage of it.
By 2013, our sales had grown significantly; we had experienced multiple years of double-digit growth. We continued to cultivate our talented, committed staff, and to receive tremendous support and interest from our community. The Board and Management then began a global planning process both to meet this demand and to assess our future. This comprehensive exploration included the evaluation of our current site, so that we might understand how it could be developed to support our long-term success here. We also explored our opportunities to relocate or expand to a second store. This work included a full survey of real estate in our area, as well as two complete market studies of our trade area.
Those two studies confirmed that we were centrally located within our community of shoppers and owners. And despite our extensive search, no viable options for relocation or a second store emerged. Last year, we engaged the natural food store designers Sutti and Associates to develop a master plan of what we could accomplish by expanding and redesigning this site. We learned that both short- and long-term improvements to the building and site could support us in our community-based mission, while also meeting the demands of our many patrons and friends.
As we envisioned the phased implementation of these improvements, it quickly became clear that we would be better positioned to do so if we owned the building. In addition to our desire to nurture the Co-op’s success, we had a number of other key assets that enabled us to finally make this happen. These included our operational success and profitability, our well-functioning Board and strongly-engaged staff, as well as historically low interest rates. We therefore opened discussions to this end with Calloway, and quickly found mutual interest in our negotiations.
As property owners, our expenses will immediately be lower with a mortgage than they would if we had continued with a lease. In the long term, we will likely pay the mortgage off in advance of the 20-year loan term, greatly reducing our occupancy expenses. With this purchase, we have also significantly increased the equity position of the Co-op, and by extension, of its 7,500 owners. Every payment made toward this purchase, rather than to a landlord, will reinforce this financial strength. That increased equity, in turn, provides additional stability and leverage as we consider future investments in our business. By making these investments, we now have control of the property and of our destiny for the future. Through this purchase, we have made a resounding statement of our commitment to this site, our operations, and our community. We own it!
As owners, we have completed an application to the city to improve our parking lot and to add a sizable solar array to offset our energy usage. Our parking plan is designed to improve the flow of traffic through the lot, enhance pedestrian safety with a walkway running the length of the lot, and enhance the community’s use of our outdoor areas. The solar array is still undergoing design revision and analysis. It will essentially consist of solar panels supported on a steel structure over part of the parking area and the pedestrian walkway. This array will provide as much as 50 percent of our energy needs. We expect construction to begin shortly after school lets out this summer. During construction, there will obviously be some impact upon your parking and shopping experience. Be assured that we will be working hard with the engineer and the contractors to mitigate that impact. We appreciate your patience while we improve our store for everyone.