Learning about Fair State Brewing Cooperative’s financial woes, Aki’s BreadHaus’ impending move from Central Avenue and a recent vacancy at 1601 37th Ave. NE, one may wonder how this affects their landlord, Northeast Investment Cooperative (NEIC).
NEIC members may find out at the members-only meeting with their new board April 25 at 7 p.m. at Broken Clock Brewing Cooperative, 1712 Marshall St. NE. Six candidates are running for five open board seats, in online balloting that will end April 23 at 10 p.m.
The cooperative has about 250 members who put in $1,000 apiece to join. Some have invested significantly more toward specific projects through “C” and “D” shares. NEIC’s initial purchase, about a decade ago, of the former Twin City Marine and Hardware building at Lowry and Central was partly financed by immediately selling space to Recovery Bike Shop. At the time, Central Avenue real estate was languishing. Shortly afterward, business/investor interest increased, making it difficult to compete for other properties. At a rather strained spring 2023 annual meeting, board members showed pin maps of properties they had considered but lost out on.
Current board member Joe Bove, whose term is expiring, recently emailed some of the members encouraging them to vote for him and him only, because the other five candidates are running as a bloc and he hoped to maintain his seat. The group of five — Leslie Watson, Amy Fields, Colleen O’Connor Toberman, Jill Wilhelmi and Tyler Candee — all served on the board at various times, some as founders, and all but Candee were on the board at the time the co-op acquired the 37th Avenue and Johnson Street property just over the border in Columbia Heights.
O’Connor Toberman, who said she was delegated to speak for the group of five, said, “There are enough former board members who are so proud” of what NEIC had done over the years that “none of the group had to be persuaded to run.” She said they’re not running against anyone and didn’t know who else was running. “We have expertise and had really effective times working together.” Not being on the board now, “there are things we don’t know,” she said, but they are confident they can “bring a steadiness” missing in the last two to three years, that is especially needed given the tenant changes.
In their bios, the five say the organization “lost its way,” and ask for more transparency.
Bove, who served from the founding in 2011 to 2014 and then again starting in 2021, said any member can attend board meetings, held on certain Mondays in the basement of Fair State at 7 p.m. Committees meet on the other Mondays and are open as well. Bove told the Northeaster he’d like to see more transparency and specificity in the agenda of the group of five.
O’Connor Toberman said the group is concerned about a lack of communication about Fair State’s bankruptcy and their statements about NEIC — neither a response to Fair State or “how it might affect us as members.” When the 1601 tenant moved out, the board said the property would be listed with a realtor by November 1 but that has not yet happened, she said, adding that listing a building “for sale or lease,” which they would do immediately, helps a professional give their client data to help make decisions; the five are open to either path.
The group of five has not committed to any specific future, but would like to engage, as they did eight years ago, with members to see what they want. The real estate market has changed many times since the founding. “It is always good to have neighbors get together to take control of their community, and it is as important in times of distress as it is in times of gentrification,” O’Connor Toberman said.
Of the board members currently listed on neic.coop, Pat Vasatka, longtime treasurer, and Nancy Przymus, recently appointed, are not running again. Members remaining are chair Evan Hall, Dylan Stanton, Dan Scoggins, and Nathan Miller.
The board is allowed up to nine members; an additional two can be appointed for one-year terms to acquire certain skills or community representation, Bove said.
A bloc of five would have an instant majority.
“At 100% occupancy, we make about $200 a month,” Bove said of the 37th Avenue property. “At 95%, we start losing money.” He supports selling. As the property and tenant committee chair, he said he’s actively negotiating with a tenant to replace Aki’s, which is moving to a larger space, and said he believes that if Fair State doesn’t survive, a new tenant could be found. The brewery recently signed a
seven-year extension on its initial lease, which is “so complex that it’s hard to tell what they are actually paying but it’s significantly under market rate,” Bove said.
NEIC’s mission is supposed to be transformative, “yet we have so much money tied up in helping these specific businesses,” Bove said. “We’re scraping by. We can’t hire a staffer. More importantly, we can’t do new projects.” Bove lauded Hall and said the board has talked a lot of things through since the last annual meeting. “When NEIC had differing opinions it made us a better board. I think it got too homogeneous. There is stuff that should be called into question.” Bove said he would welcome working with at least some of the bloc, and when pressed, said only that he was not familiar with Candee.
O’Connor Toberman said that the initial mortgage on the Central Avenue building was just paid off last month, freeing up cash flow.
When asked, neither she nor Bove expressed any concern about solvency. Financial statements will be shared and explained at the member meeting.
Loren Schirber texted the Northeaster that he recently resigned as NEIC’s property manager after several years because he was uncomfortable with actions taken by the board to try to get more money from tenants. “None of the members I ever talked with cared most about making the top ROI (return on investment). They cared about making the neighborhood better and would be sickened by the current tussle.”
O’Connor Toberman noted that NEIC formed to fill a gap of availability between small, owner-occupied buildings and expensive new-construction spaces. Members of NEIC also own or owned nearby properties. “NEIC was part of a really big moment on Central,” O’Connor Toberman said. “It’s a thriving place to invest. NEIC has the stability of being a local landlord where absentee landlords are a big issue.”
Editor’s Note: This article came about by curiosity of the reporter, who is a member of NEIC; no candidate or other party asked it be written.