Hub City Cooperative Annual Meeting 2014

1. Hub City Cooperative Annual Meeting2014

2. Agenda WelcomeTim Meade, Board President Business Introduction of Board Members: Tim Meade Vote on Board Terms: Laura Barbas-Rhoden, Board Vice President Milestones: Fran Fried, Board Member State of the co-op: Sheila Cash, Board Treasurer Celebration Volunteers – Laura Barbas-Rhoden Site Development – Tim Meade Next Steps Funding: Fran Fried Invest & Grow: Tim Meade Sources and Uses: Fran Fried Q&A Tim Meade Adjourn

3. Board Terms

4. Milestones 2013-2014 • Owner Investments: At last year’s Annual Meeting, we were preparing to kick off the Invest and Grow Campaign. During the spring campaign and a smaller fall follow-up, we successfully secured commitments for $625,500 in preferred shares and owner loans. That is a fantastic result for a first-time investment campaign like this one, and a true milestone to celebrate! • Primary Debt Financing: About a quarter of the development budget is to be financed by an outside lender. Last spring, the Co-op applied to Lowcountry Housing Trust (now known as the SC Community Loan Fund) for this financing, and after an exhaustive vetting process, received a commitment of just under $600,000 in financing. BUT, the offer required us to purchase the co-op building, in order to have sufficient collateral under their underwriting rules to support the loan. • The Board decided to pursue this possibility throughout the Invest and Grow campaign, but ultimately decided that the close to $1 million in additional cost that this option added to the project was simply too much for a start-up venture. We parted ways on good terms with Lowcountry Housing Trust, and they have committed financing for the Northside Food Hub project, so we are thrilled that they are still investing in healthy foods in the Upstate!

5. Milestones 2013-2014 • Launch of the Innovative Rural Development Corporation: The IRDC, which is a nonprofit community development corporation, was granted federal tax-exempt status in June 2013. The IRDC’s mission is to build sustainable economic systems that strengthen the health of our communities by creating market outlets for locally- and sustainably-produced goods and foods, and by educating on how healthy food and environment impact healthy life styles. • Getting the doors open at the Hub City Cooperative is the IRDC’s pilot project, and the advent of the IRDC necessitated some transition of Board members from the Hub City Cooperative Board of Directors to the IRDC Board of Directors, for continuity and stability. But this has been a fruitful partnership thus far: thanks to donations and a grant from the JM Smith Corporation, the IRDC has been able to invest $21,500 to date, in preferred shares in the Hub City Cooperative. Another big milestone! • Milestones of Transition: After the spring campaign and the decision to turn down the Lowcountry Housing Trust financing, the Board and advisors took a step back to re-examine whether purchasing the building was in our ownership’s best interest at this phase. The Board ultimately decided that a cheaper lease-based development plan to get the doors open was preferable to the longer fundraising effort necessary to gain ownership of the building.

6. Milestones 2013-2014 After the intensity of the spring Invest and Grow campaign, there was a need to take time to look at the data the campaign generated, to talk to co-op experts to make evidence-based decisions -- based on the values and ideals that brought us all together in the first place -- about the Coop’s next steps. The Coop Board used the summer and early fall to strategize carefully about ways to realize the commitment that this growing ownership has always made: to plan for the long-haul, and to create a sustainable, thriving store. The Board is committed to the slow, steady, careful build, on solid ground, that brought all of us into the cooperative as owners, and that has taken co-ops next door in NC, and across the nation, to success. The Board also welcomed three new members during the fall, appointed to fill seats opened mainly by transitions to the IRDC Board. This process reflected and encompassed Cooperative values and principles around education and training, leadership development, owner empowerment, and diversity within the ownership, and, I can say personally, it has been wonderful to move forward with this strong group of Board members.

7. Milestones 2013-2014 • Primary Debt Financing, Round 2: During the winter, the Co-op secured a letter of pre-commitment for primary debt financing, shared by the Local Enterprise Assistance Fund (LEAF) and Northcounty Cooperative Development Fund (NCDF), under a lease scenario. Both are national organizations, devoted to supporting the development of cooperative businesses, with deep experience in the financing of retail food coops. Our lease scenario was familiar and acceptable to them, due their specialization in the world of co-op finance. We will finalize this application during the summer of 2014. This commitment is contingent on finishing the owner investment portion of our financing plan, and on securing support from the City of Spartanburg. • City of Spartanburg: The City has been supportive of the co-op concept from the early days of its organization. Co-op owners began discussions with City staff and council members in the fall and winter. Initial information sent to council in February, and the Council invited the Cooperative to present before them in mid-March. This past Monday, as you might have seen in the paper this week, at its work group session, the Council and City staff discussed a potential structure for City support. This is a critical and FINAL piece of the financing, to be voted on soon… please contact your City Councilperson NOW to let them know you support full City funding for the Coop!  

8. Milestones 2013-2014 • Navigated Scarce Financial Resources: Most developers have considerably more cash on hand throughout the pre-construction phases of a project of this size than the Coop has had this year. The ownership has borne considerable expense to test market viability and store location, to secure a site, and to create biddable designs and floor plans, to get to these final planning stages. We the owners have accomplished a huge amount of pre-development, on a shoestring budget, thanks to grants from VCOM and the Food Coop Initiative, IRDC investments that have been “released” early, and, finally, to new owner equity coming in – we have added over 200 new owners since the beginning of April last year. And that is quite a milestone! • Milestone for next Annual Meeting: first retail cooperative in SC, open! Featuring locally-grown and locally-produced products, available year-round. The first grocery store in downtown Spartanburg in a generation… that’s the milestone for next year!

10. State of the Co-op

11. Volunteer Recognition • Celia Cooksey • Pam Stoll • Ester Kelley • Theresa Mann

12. Hub City CooperativeSources and Uses *Funds are in-hand or committed, contingent on remainder of project budget being raised. **Proposed City of Spartanburg funding, currently under consideration. Includes $150,000 operating assistance over first four years of operations to repay Landlord for additional upfront cost, and $200,000 subordinate loan, to be repaid starting in Year 3 of operations. Note: These are best estimates, given current conditions and information. As plans and financing are finalized, some categories will change.

13. Announcements & Questions • Q&A • Quick Orientation on Tables Available for Small Group Discussion

14. 2014 Annual Meeting Motions • (P2) Call to Order – Tim: Annual meeting of the owners of the Hub City Cooperative • (P2) Recognition of Key Attendees - Tim (Board, IRDC, City, Charles) • (P2) Reference to 2013 Meeting Minutes - Tim • (P2) Board Terms – Laura • Motion for Beth Cecil / Andy Gustafson / Tim Meade to begin new 3 year terms expiring 2017 • Motion to approve the Jeff Tillerson and Cyn Massey assuming unexpired terms of Erin Ouzts and Simone Mack • (P2, P4) Business Milestones - Fran • Motion to enter the accomplishments as reported into the official record of the Hub City Cooperative • (P2, P3) State of the Co-op - Sheila • Motion to enter the end of-year 2013 financial status into the official record of the Hub City Cooperative

15. 2014 Annual Meeting Motions • (P1) Celebration of Volunteers – Laura (with Sharyn assisting) • Motion to note the extraordinary commitment and volunteer efforts of Pam Stoll, Ester Kelly, Theresa Mann and Celia Cooksey into the official record of the Hub City Cooperative • (P7) Site Development – Tim • No Motions / Update / Reference Posters in the Room • (P3, P5) Funding – Fran • Motion to enter the current sources and uses statement into the official record of the Hub City Cooperative • (P3) Invest and Grow - Tim • No Motions / Update / Summer Fundraising Campaign • (P5, P6) Education and Cooperation – Tim • No motions / reference information tables set up around the room • (P5) Q&A - Tim • Adjourn – Tim • Motion to adjourn the Annual Meeting of the Owners of the Hub City Cooperatives