Collegetown Crossing : Proposed GreenStar Satellite Store
Monday, 01 October 2012 15:41
Hidden - Collegetown Store Vote
Should the GreenStar Council be authorized to proceed with the opening of a new, satellite, natural foods market at a rented site at 307 College Avenue, in Collegetown, with an initial lease term of five years and seven months (and three, 5-year renewal options)?
PRO Statement
By Brandon Kane,
General Manager
My opinion is an emphatic "Yes!" The primary reasons that GreenStar should open a store in Collegetown are two-fold:
It honors our mission and values:
Serving underserved communities
Our co-op is consistently looking for ways to serve underserved populations in our area. After spending a large part of this year speaking with students and residents while researching...
CON Statement
By GreenStar Staff and Council
GreenStar's Bylaws say that the Co-op cannot open a new store, at a new location, without the approval of the Membership. Before you vote on whether to approve the proposed new store in Collegetown, here are some points to consider.
1. The proposed new store poses a potentially large financial risk for GreenStar.
- A major capital investment by GS (currently estimated at $807,270) will be required, adding to the Co-op's debt load and reducing cash reserves; much of this investment will not be recoverable if the store fails....
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In November GreenStar Membership will be asked to vote on whether or not GreenStar should open and operate a third natural food market located in Collegetown at 307 College Ave. This proposal is the culmination of nearly two years of negotiations between the owner of the property Josh Lower, GreenStar's General Manager Brandon Kane, and several members of GreenStar's Council.
A lease calling for four consecutive 5-year terms has been approved and signed by Council with the understanding that there are several major contingencies still to be satisfied before this project becomes a reality:
1. GreenStar's Membership must approve the store location by a 2/3 majority. The voting period is 11/1/12 - 11/30/12
2. This project requires a variance to be granted by the City on the parking space requirement associated with a residency. The timeline calls for a variance to be granted no later than February of 2013
3. All permits must be issued and construction commenced by July of 2013
4. GreenStar must be able to occupy the store by July 31st 2014
Collegetown Crossing Draft Site Plan Ground Floor
Other important facts regarding the lease:
1. Rent is based off of 2.7% of gross sales based on our conservative third-party sales projections. Rent is subject to an annual increase of 3% to account for inflation. For comparison , rent at Oasis is also 2.7% of sales while the West End Store is 1.4% of gross sales. This appears to be a generous offer given Collegetown's reputation for high commercial rental rates
2. GreenStar will occupy approximately 3,000 SF of the ground floor with an additional 500 SF of storage in the basement. It is expected that the retail space will be 2,500 SF. For comparison West End retail is 5,710 SF and Oasis is 2,428
3. It is the intention of the developer to incorporate a permanent indoor bus station facility in the front of building
GreenStar's financial projections:
|
Year |
Year |
Gross Sales |
Net Income |
Percent of Sales |
| 1 | 2014 |
$757,100.00 |
-$114,438.00 |
(15.12%) |
| 2 | 2015 |
$2,089,596.00 |
-$152,996.00 |
(7.32%) |
| 3 | 2016 |
$2,403,035.00 |
-$13,858.00 |
(0.58%) |
| 4 | 2017 |
$2,739,460.00 |
$19,151.00 |
0.70% |
| 5 | 2018 |
$3,013,406.00 |
$35,424.00 |
1.18% |
| 6 | 2019 |
$3,254,479.00 |
$49,384.00 |
1.52% |
| 7 | 2020 |
$3,417,203.00 |
$57,899.00 |
1.69% |
| 8 | 2021 |
$3,588,063.00 |
$81,848.00 |
2.28% |
| 9 | 2022 |
$3,767,466.00 |
$112,306.00 |
2.98% |
| 10 | 2023 |
$3,955,839.00 |
$122,441.00 |
3.10% |
Collegetown Crossing Draft Site Plan Ground Floor
Other important facts regarding the lease:
1. Rent is based off of 2.7% of gross sales based on our conservative third-party sales projections. Rent is subject to an annual increase of 3% to account for inflation. For comparison , rent at Oasis is also 2.7% of sales while the West End Store is 1.4% of gross sales. This appears to be a generous offer given Collegetown's reputation for high commercial rental rates
2. GreenStar will occupy approximately 3,000 SF of the ground floor with an additional 500 SF of storage in the basement. It is expected that the retail space will be 2,500 SF. For comparison West End retail is 5,710 SF and Oasis is 2,428
3. It is the intention of the developer to incorporate a permanent indoor bus station facility in the front of building
GreenStar's financial projections:
|
Year |
Year |
Gross Sales |
Net Income |
Percent of Sales |
| 1 | 2014 |
$757,100.00 |
-$114,438.00 |
(15.12%) |
| 2 | 2015 |
$2,089,596.00 |
-$152,996.00 |
(7.32%) |
| 3 | 2016 |
$2,403,035.00 |
-$13,858.00 |
(0.58%) |
| 4 | 2017 |
$2,739,460.00 |
$19,151.00 |
0.70% |
| 5 | 2018 |
$3,013,406.00 |
$35,424.00 |
1.18% |
| 6 | 2019 |
$3,254,479.00 |
$49,384.00 |
1.52% |
| 7 | 2020 |
$3,417,203.00 |
$57,899.00 |
1.69% |
| 8 | 2021 |
$3,588,063.00 |
$81,848.00 |
2.28% |
| 9 | 2022 |
$3,767,466.00 |
$112,306.00 |
2.98% |
| 10 | 2023 |
$3,955,839.00 |
$122,441.00 |
3.10% |
Collegetown Crossing Draft Financing Plan
| Expenses | Total | Percent of Total | Financing | Total | Percent of Total | |
| Leaseholder Improvements -Ground Floor | $238,400 | 26.66% | Landlord Contribution | — | — | |
|
Leaseholder Improvements - Basement |
$10,000 | 1.12% | ||||
| Equipment - Ground Floor | $238,400 | 26.66% | Member Loans | — | — | |
| Equipment - Basement | $10,000 | 1.12% | Bank Debt | $295,109 | 33.00% | |
| Inventory | $79,030 | 8.84% | GreenStar Cash Contribution | $599,161 | 67% | |
| Buildout and Inventory Subtotal | $575,830 | 64.39% | ||||
| Build-out-related Fees | $69,100 | 7.73% | ||||
| Start-up Staffing | $65,883 | 7.37% | ||||
| Pre-opening Utilities Cost | $4,875 | 0.55% | ||||
| Start-up Promotion | $7,655 | 0.86% | ||||
| Pre-opening Interest Expense | $8,000 | 0.89% | ||||
| Organizations Development Costs Subtotal | $155,513 | 17.39% | ||||
| Working Capital | $45,928 | 5.14% | ||||
| Overrun Allocation | $117,000 | 13.08% | ||||
| Total | $894,270 | 100.00% | Total | $894,270 | 100.00% |
Estimated cash reserves as of 2013 $1,570,114*
Estimate cash usage of project $599,161
Cash remaining $970,953
* Does not include possible cash usage for offsite commissary kitchen and bakery
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