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Central Co-op to expand south with proposed Tacoma merger

Capitol Hill’s cooperative grocery store, Central Co-op, has announced a proposed plan to merge with Tacoma Food Co-op, according to a statement from the organizations released Monday.

If you’re a shopper at the 16th and Madison or Tacoma markets, don’t freak out. This doesn’t appear to be a deal cut from the same cloth as KUOW’s takeover of KPLU.

“As a community-owned business, we believe that people are stronger when they act together,” Central Co-op board president Dean Decrease said in the statement. “Central Co-op and Tacoma Food Co-op share the same values and the same vision for a sustainable food system and a cooperative economy. The world of natural foods is increasingly competitive and if we combine our efforts together both stores will be much better positioned to thrive going forward. This will mean more good jobs, community ownership and local-control.”

According to the announcement, Tacoma Food Co-op opened four years ago and has struggled with costs. “Together the two stores will be able to share a depth of administrative resources, spread out the costs of doing business, enjoy greater buying power, put collective strength into growing the cooperative movement, and contribute to the local economy by offering jobs with exemplary pay and benefits while supporting regional producers,” the announcement reads.

SONY DSCCentral Co-op, on the other hand, has been in operation on Capitol Hill for 40 years and just signed a 20-year lease with another 20-year option, according to a spokesperson. The store has also reportedly “improved sales growth year-over-year for the last three years.”

The spokesperson said the merger would allow the markets “to share a depth of administrative resources, spread out the costs of doing business, enjoy greater buying power, put collective strength into growing the cooperative movement, and contribute to the local economy by offering jobs with exemplary pay and benefits while supporting regional producers.”

A majority of votes by members at both cooperatives will be required to authorize any merger plan.

In 1999, Central Co-op moved into the newly constructed building at 16th and Madison as the first and only commercial tenant in the space. The co-op got its start more than 20 years earlier on 12th Ave where it operated until the late 90s move. In late 2011, CHS reported on the cooperative’s success in paying off loans for constructing its new home and moving forward under the updated Central Co-op brand. It currently boasts more than 13,000 members.

While online shopping has eroded many aspects of traditional retail, even the presence in Seattle of deep investment in ventures like Amazon Fresh hasn’t seemed to take the shine off the economic opportunity around Central Seattle grocery store development. The next big grocery investment in the area is expected to come at Broadway and Madison where Whole Foods will be at the center of a 16-story mixed-use development expected to open in late 2017/early 2018.

Central Co-op is a CHS advertiser.

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6 thoughts on “Central Co-op to expand south with proposed Tacoma merger

  1. Part of the character of a coop is the community connection. A merger with Tacoma would dilute that local connection.
    Further, Would the clearly stronger Seattle Central Co-op with 6 times the membership take on debts of the weaker Tacoma Co-op – and future debts?
    Would Seattle fund expansion of the Tacoma Coop?
    What would be the actual benefits to the Seattle -Coop members?
    Would Seattle Central Coop managers get any sort of financial reward from merging?

    Why not create a working alliance instead? This could provide a purchasing advantage that would serve just as well as a merger without taking on the liabilities of the Tacoma Coop.
    It would also keep the Seattle operation more tightly connected and responsive to the Capitol Hill community.

    I have been a member of the Seattle Central Coop from its time at 12th and Denny.

    • While you definitely bring up some important questions I think your take on the “community connection” is too narrow and overly insular.

      With the arrival of a new Whole Foods on the horizon – and the potential for more chain supermarkets moving into the neighborhood as it continues to grow – it’s doubly important that co-ops maintain a strong presence both on Capitol Hill and in the region as a whole.

      The concern that merging with the Tacoma Co-op would somehow “dilute” or diminish Central’s commitment and focus on the immediate community seems unfounded. If anything, successful expansion would allow Central to extend it’s proven model to support and enrich a whole other community. Which would only help to further the cooperative movement, which really should be one of the ultimate goals.

      When you have a good thing you don’t hoard it for yourself. You put it out into the world so others can share the benefits and successes.

  2. I remember a while back when the board or the powers-that-be with the coop were facing a surplus and solicited recommendations on what to do with it. This was at a time when a survey of store prices in Seattle had ranked the Madison Market as the most expensive store in Seattle. Clearly the management at the time had an agenda other than providing good food and organic products at a reasonable price to its members. I am concerned that this is just such a venture.
    I would like to know how the members are served by this proposal – not pie in the sky – real facts.

  3. Central Co-op has announced important but lightly-publicized changes proposed for our co-op:

    • Central Co-op to “merge with” the Tacoma Food Co-op; and
    • Changes to the structure of Central, making it jointly a member-owned and worker-owned business.

    There are several troubling aspects to these proposals, which have been in the works for some time, but not revealed to most members until very recently.

    Due to the lack of detailed, credible information on these proposals, I recommend a NO vote on both. If the proposals have merit, they should be fully explained so that we members can make informed decisions. There is no need to rush to an uninformed decision.

    Here are some of my concerns.

    1. Lack of transparency. These proposals are being rushed through, with first notice sent on November 16 to members who have provided their e-mail addresses; one hardly-advertised information session on November 21; and a membership vote running from November 23 through December 21.
    • Statements made at a recent information session (attended by about seven members-at-large, aside from Co-op officials) were not consistent with the written proposals posted on the Co-op website. (See the election page on the Co-op website.)
    • The deal is being called a merger (a combination of two companies to form a new company), implying equal partnership, but according to the Plan Of Merger document, Central Co-op will be the “surviving corporation”. An examination of the written proposals shows it to be more like an acquisition. The general manager of Central Co-op described the Tacoma Food Co-op as “low hanging fruit” for Central Co-op. After describing the relationship of the two merged co-ops, when asked if it wouldn’t be better characterized as an acquisition, he asserted that it was legally a merger (that the two entities would be dissolved into a new one). The Plan of Merger document shows the Central Co-op entity remaining and being modified, while the Tacoma entity dissolves. The name of the new entity is to be Central Co-op, with board representation for Tacoma being minimal and not guaranteed
    • There are upcoming informational meetings planned, but the times and locations are not being announced publicly, and the sessions are only lightly publicized. One must RSVP to get the information. The membership meeting at which the voting will conclude is advertised for a half hour, that is, not for conversation.
    • These are big decisions being pushed through with little notice and lots of ambiguity. Changes of this type should be made by a well-informed membership, which needs the time to gather information and engage in debate and conversation. At the November 21 informational session, it was stated that the process could be finished by February. No imminent election was announced, but it must have been set by then, since it began two days later.
    • The information provided by the board and management at the last minute is in stark contrast to the situation in Tacoma, where a well-attended “community conversation” was held on November 14, before the merger was even announced at Central. A second public conversation was scheduled for December 4.
    • There is no forum for a debate at Central. The published voters guide does not have an opposition view, unlike every election guide published for any public election in this country.
    This lack of transparency makes me question whether the board and management can be trusted to be acting in the best interests of Co-op members.

    Further comments will follow.

    Roger Lippman
    Founding board member of Central Co-op

  4. As the end of the election period approaches, I would like to summarize my concerns about the two proposals before us. I voted NO on both proposals.

    Over the past three years, the Central Co-op board, in conjunction with the general manager, has actively limited member engagement in its processes. (The board that developed the current proposals included four members who have served throughout that period.) When members have shown interest, the board has shut them out or made it difficult to participate. They consulted with “co-op experts” for months before the two proposals were announced to the membership (Central Co-op Facebook posting, 12/9/15), but it does not seem to occur to them that there is a tremendous amount of skill and expertise among Central’s very membership – people who have been kept out of the process.

    All of this is evident in the situation where we now find ourselves: Major changes to the Co-op were in the works for a significant period of time, with practically no awareness on the part of the membership. Then, the changes were publicly proposed and within a few days, an election began, before there was any opportunity for members to become informed, or for public discussion and debate.

    A voter’s pamphlet was produced, containing enthusiastic arguments for the two propositions, but no opposition statement. I wrote a critical posting on the Co-op’s Facebook page, the only public platform available for raising questions, short of standing at the store all day passing out leaflets or engaging in one-on-one conversations. Within 12 hours, my posting was censored and I was banned from further access to the Facebook page. (Another member also had his critical comment removed, though reinstated after he inquired.) When I inquired, the board president responded that “you are not an elected leader so you are not empowered by the membership to develop policy.” What he did not do is quote the democracy principle eloquently stated on the Co-op’s website:
    > Democratic member control: Cooperatives are democratic organizations controlled by their members, who actively participate in setting their policies and making decisions. People serving as elected representatives are accountable to the membership.

    The process is shabby. The question is why. Do the board and management lack competence to involve owners? Do they not care? Do they fail to understand the meaning of democracy? Or are they actively working to suppress owner engagement? I don’t know the answer. Perhaps it is some combination of all of these. But their actions are succeeding in excluding owner participation.

    One would have to read the amendments to the articles and bylaws line by line, comparing old and new, to understand the full breadth and all the detail of the changes. Most of the 1200+ members who have voted so far probably haven’t had time to do this. A responsible approach would have been for the Co-op board to provide this information, in an intelligible way.

    However, the one thing that I know I object to is giving the GM a vote on the board. Since the board’s job is to supervise the GM and the GM reports to the board, it is not appropriate to have the GM in a voting position. Also, it’s important that the board be truly independent from the management. The management has a distinct advantage over the board in the information it possesses and the time it has to process. That already puts the board at a disadvantage. At Central, we’ve seen, since Dan Arnett’s arrival as GM, the enormous power he exerts over the board, even without voting. And, I believe, that has been damaging to democratic control and member rights.
    I voted NO on the 2nd proposition.

    As for the merger, I am undecided, but I voted NO to send the message that owner/members need more opportunity for an informed conversation.

    Roger Lippman
    Founding Central Co-op board member