Central Co-op CEO announces exit

arnettAs Central Co-op attempts to win a place anchoring the commercial development around Capitol Hill Station and repair the situation in Tacoma where it is looking for a new location to open a market after this year’s merger, it will do so while searching for a new leader.

CEO Dan Arnett told the 40-year-old cooperative’s members Thursday he will be stepping down in December to head a co-op in Sacramento. Arnett told CHS he was ready for a new challenge and that controversy over the closure of Central Co-op Tacoma had no impact on his decision to leave Seattle.

8446998444_a8c3a36dab“It’s really irrelevant to my decision making process,” he said. “There’s always some group that’s mad about something.”

Overseeing the merger of the Tacoma co-op with the  E Madison-headquartered Central Co-op was one of Arnett’s most significant accomplishments during his four years in Seattle. The Tacoma store later closed when Central Co-op could not reach an agreement on a new lease. Arnett said there were no plans for Central Co-op to make any further mergers, with Sacramento or elsewhere.

Last month, CHS reported on the frustrations of Tacoma co-op members following the abrupt closure of their store in the wake of a merger. Christine Cooley of Tacoma’s Friends of the Co-op group told CHS that she hopes Arnett’s resignation could expedite the opening of a new Tacoma store. “I worry a lot for Sacramento,” she said.

 

Following the Tacoma closure, Central Co-op board chair Dean DeCrease said, “We clearly did not sufficiently inform and involve the Tacoma membership of the developments surrounding the closure of the 6th Avenue store.” Arnett told CHS the co-op was working to find a new Tacoma location. “Our strategy is to find the right site and location as opposed to the quickest deal,” he said.

Central Co-op has been vying against Portland-based New Seasons to win the deal to be the anchor tenant in the commercial development underway around Capitol Hill Station. Arnett said Central Co-op was still in the mix and that he would continue to pursue a second location on Capitol Hill.

Under Arnett’s leadership, the co-op also transitioned to a “solidarity co-op” model, where consumer-members own half of the co-op and worker-members own the other. The co-op established a $15 minimum wage for new hires well in advance of the city’s required schedule. Central also recently secured a 20-year lease for its 16th and Madison location with another 20-year option.

Here is the statement Arnett sent to the co-op’s membership announcing his departure.

I want to share the important news that I have accepted a new role at another co-op. I will remain as Cooperator in Chief at Central Co-op through December and work with our board to ensure a smooth transition to new leadership as I work to relocate to Sacramento. Our Board and management are committed to our vision to grow Central Co-op and continue our transformative, nationally-recognized work as a cooperative for the 21st century. We will continue our work opening a new storefront in Tacoma, making improvements to our store at 16th and Madison, pursuing the anchor tenant space at the Capitol Hill Light Rail Station, and more. There are many exciting opportunities ahead for the co-op and we are better positioned than ever to achieve them. Please stay tuned for more news related to the future management transition over the coming months, if you have questions please email info@centralcoop.coop.

“It has been an honor to serve Central Co-op members from the moment I arrived in 2012,” Arnett’s statement concludes. “Our co-op is a proven leader on important issues for food co-ops, and retailers in general, across the country. I know there is more to come. Thank you for helping make my time here truly special.”

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22 thoughts on “Central Co-op CEO announces exit

  1. sounds like Central Coop needs to focus on getting current affairs in order rather than taking on trying to open another location on Broadway!

    • I read that and I thought the same thing immediately. Those are the words from someone who is woefully inadequate to handle the affairs of any group, much less a co-op. The manner in which he handled his exit will follow him to wherever he goes. A fail in terms of judgement, much less PR.

    • Arnett’s total dismissal of the entire Tacoma membership (remember, they wanted to merge with us!) just speaks to his incredible narcissism. He’s a Trump wannabe.

  2. This may be a bit off-topic but I’ve never understood why the prices are so high there, absent (presumably) a profit motive. Most co-ops I know of exist for the explicit purpose of making quality food accessible to those with modest incomes. This one seems to have some other goal. Perhaps it exists mainly to provide secure, well-paying service jobs, which is a worthy enough reason, I suppose. But I stopped shopping there within a couple months of moving to the Hill. I really wanted to like it but my pocketbook said “no mas.”

    • Agreed, MarciaX… I had the exact same impression and have not been back since. What is the intended appeal of a Co-Op– if it’s not better prices then is it different products or difference service? I wasn’t seeing it. Maybe it’s because mainstream grocers now carry many organic / local items, which used to be the expertise of the co-op. Guess they need to update their business model.

    • For me, the appeal is I trust the co-op to have done due diligence in trying to get products that are made with minimal damage to the environment, maximum benefit to the producers, etc. I got tired of having to keep track of all the bad things different food companies and farmers had done to customers, the environment, and their workers on my own.

  3. The Tacoma fiasco was clearly a case a lack of due diligence on the part of the Coop leadership. I never understood how they suckered the membership into that misbegotten project.
    Maybe new leadership will avoid such flights of fancy.

    • Yeah, it’s a mystery to me as well why members approved this. It was clearly a pretty flakey plan from the start, but if I remember correctly, it passed with close to 100% approval. I sometimes think Seattle people just go along with whatever they’re told to without really examining the issues, as if questioning anybody’s motives or facts or reasoning is somehow rude.

  4. The co-op changed drastically, both in its values and its community presence, since Arnett came on board. All the old cashiers/familiar staff faces left (some, I recall, amidst controversy). In addition to alt mags like Adbusters and Vegetarian Times, glamour mags like Allure and Instyle are now available at checkout lanes. The co-op now sells more conventional (not organic) produce than ever before. The ownership platform changed so drastically into a very complicated dividend model that I don’t think it even makes sense for anyone to join anymore (when I did in 2006, my membership soon after paid for itself). And so many of the store’s remodeling projects, I think, had way more to do with aesthetics and curb appeal, though they were presented as “necessary to improve functionality and efficiency and meet codes,” or something like that. (OK, so I liked the old hippie vibe, and didn’t see much that needed changing.) What really confounds me, though, is that the co-op elected to help the Tacoma co-op when the Delridge co-op, in a certified food desert right here in West Seattle, so desperately needs to get up off the ground. Why partner with a co-op in another city when there’s a great opportunity right here in Seattle? I stopped voting at the co-op right around the time Arnett came on board (and moved to another neighborhood, too). The newsletters changed in tone from very nice updates and “what do you owners think about this?” to Arnett just telling owners what’s going to happen. Just seemed like there was a time, right around 2012, when the co-op shifted focus from serving the community by providing wholesome foods into something far more…complicated.

    • Yeah, the co-op management as it has been recently is a sad blend of wanting to be corporate go-getters but not actually having the talent. I attended their “presentation” right before the co-op merger went through, and it was clear to me that the whole proposal made no sense, that the people in charge were not particularly smart or qualified, and that absolutely none of it would have passed the scrutiny of a moderately competent meeting in an actual corporation.

      My advice to the co-op: Either be wooly, gluten-free hippies (my choice) or be corporate, but get out of this pathetic no-man’s land you’re in now.

    • We agree, started spending our money at PCC more when Central started to turn 2008-2009 ish. Members of many coops and nationally familiar/frequent them – PCC rises to the top but as a non- member, I do enjoy Skagit Valley as another local option. The Oly Coop is top tier in adherence of principles but they have volunteers in addition to paid staff, so fewer jobs to offer but give so much more to the community in every other way ( probably rooted in being “community based.)

  5. Re: why are prices so high and practice not aligning with principles?

    Look back at what the membership voted on in the 5 or so years before Arnett – you may notice very high caps on his and other managerial wages …. May have something also to do with what attracted someone like him in the first place. My suspicion is that while wages of the workers are touted, it is the wages of the managers that likely leads to the prices, low morale, high turnover and poor functioning not aligned with coop principles. We voted against those initiatives and argued them at the time.

    Re: treatment of Tacoma, please don’t tailspin into victim blaming. What Central Coop has done has been extremely paternalistic, ill informed, poorly executed, and bewildering – especially in their treatment of Chrissy and Monique – who I don’t personally know. What I do know is that within a week these ladies organized a member meeting, with a paid facilitator, for the community to come together and try to understand what had happened and where to go next. Central was invited, begged, to attend in some form to share their side and meet with members. They would not release the member list, so the group had to use the “friends of Tacoma food coop” Facebook page and chalking done at the store to spread the word. You can go there and see the whole course of events as they unfolded from that day the store closed, June 18th. They want to blame the community, and folks here seem to be happy to jump on the “shouldn’t have tried to help poor Tacoma and get dragged down in the process” but I believe this community mobilization, and the community effort to get the coop started here in the first place, is contrary to that narrative. If we had more information and transparency, we would have used this motivation to participate in finding solutions to our problems and taking the action to implement them.

  6. Eleven years ago, I joined the membership of Seattle’s Central Co-op in the belief that I was investing in a system dedicated to making healthy foods available and affordable to members. My current observation is that Central Co-op’s management and board have now lost touch with my needs and the needs of its consumer-members, and have engaged in a deadly pattern of ambition that is not matched by their capabilities.

    Emerging from years of nearly crippling debt, the first hint at the board’s plans for expansion can be found in their establishment of its current dividend model. Rather than distribute a substantial percentage of the co-op’s annual surplus (profits) as patronage dividends, the board elected to withhold the bulk of of our surplus funds from members for decades in a “Retained Patronage Dividend Fund” using the rationale that they are providing for capital improvements. Members who would expect to receive annual dividends, say in the low hundreds of dollars, are currently receiving only about 1/10 of that amount annually in the form of a “Distributed Patronage Dividend”. Think of the withheld “Retained Patronage Dividend Fund” as those vulnerable pension funds that we read about in the new. It’s there…unless the board fritters it away. While I was in support of the board’s decision to discontinue the 10% monthly discount available to members (it didn’t represent members’ fair share of the annual surplus), the way that they implemented the current annual dividend model is not in the membership’s best interest given the current expansionist activities of the board.

    Let’s circle back and look at the co-op’s last truly comprehensive membership survey. If my memory serves me correctly, sometime around 2012–prior to or coincident with Dan Arnett’s arrival as GM of the co-op–a detailed survey was sent to the membership. One of the key survey results was that the membership was overwhelmingly opposed to opening additional locations. With the board’s hastily orchestrated membership vote on the Tacoma merger in December 2015, as well as their simultaneous vote to convert to a solidarity co-op, it became clear to me that the board had become tone-deaf to our desire to remain small and focused on owner-member shopping needs.

    The announcement soon thereafter that the board was bidding to become the anchor tenant at the Capitol Hill light rail station, just a half-mile from it’s current location, came with no rational explanation as to the fate of the current location. Questions immediately arose in my mind: How will two locations survive with the upcoming opening of a Whole Foods a half-mile away and a new PCC opening a mile east in Madison Valley? Are they privately planning to consolidate into the light rail location? Do they realistically believe that they have the ability to run multiple locations with only a limited (and now failed) track record in Tacoma and no management credentials in that area?

    Their mishandling of the Tacoma lease and their subsequent public-relations fiasco that ensued after their insolent treatment of concerned Tacoma membership (and their advocacy representatives) goes against basic principles of business judgment and cooperative management. CEO Dan Arnett’s announcement of his departure comes as no surprise and perhaps a relief to all of us, but that he had lined up the Sacramento Co-op as his next experiment leaves one suspicious that these ballyhooed projects were an exercise in resume-padding at the expense of our long-term viability.

    I hope that board takes Arnett’s departure as an opportunity to elect a steadier hand for our next general manager. I also implore our membership to reject any future plans by the board that stray beyond the core needs of our loyal, if beleaguered, membership.

    • From a Tacoma member (who now wants to have nothing to do with Central ever again): thank you for that incredibly enlightening analysis. That explains a lot.

    • EXACTLY!!! Couldn’t have said it better.
      Dan Arnett is not a leader. To lead one needs to listen, to ask. To ask US. The members. And then listen to what is being said.
      He came in with an agenda and proceeded to try to mold the coop to it.