Circumspice — Jan/Feb 2022 Issue
Many of you remember, though for most this may be a surprise: The Keweenaw Co-op is currently incorporated in the State of Ohio. Why? I thought you’d ask! I’ve answered this question many times in the last 12 years, and even more often in the ramp-up to relocation.
In 2010 we made the change. Ohio had modernized its cooperative statutes, and a long-time member of our Co-op also happened to be an attorney who played a key role in authoring those statutes. He came to us with an offer: He would help the Co-op restructure under these favorable cooperative statutes, pro bono. His interest was in seeing how the Ohio law would be applied to a consumer co-op. Up until that point his work had been with Ohio farmer and producer cooperatives, so this was a learning opportunity.
That change served us well. The restructuring allowed us to build equity (see my Spring 2021 Circumspice article) and position the Co-op for future growth. We still paid our taxes in Michigan, supported our local economy and food systems, and provided local jobs. It was simply a mechanism to do business under a truly cooperative model.
So, why am I talking about this now? Well, the time has come to convert the Keweenaw Co-op back to a Michigan Consumer Cooperative. In the years since our change, in 2015 to be exact, Michigan updated its cooperative statutes. Today a co-op in Michigan looks a lot like the entity we formed in Ohio in 2010.
Hmm, you’re saying, this sounds like a lot of work to become something that we already are… Yes, but that’s where the relocation and expansion of the Co-op join this story.
As we’ve explored financing options and put together a plan to fund our project, the Co-op will rely on four main sources: Our own cash (equity), which we’ve been building over the years; additional funds raised from our owners and community through an upcoming capital campaign; grants through healthy food and community revitalization initiatives, and (primarily) traditional loans from commercial lenders.
The second item is the biggest driver of our plan to convert to a Michigan Cooperative. This change provides the opportunity to raise capital using Michigan Invests Locally Exemption (MILE) Act. MILE allows small businesses to raise capital by reaching out to Michigan residents to invest in their companies.
Your Board of Directors, relocation committees and management are working hard to prepare for this change. Drafting Articles of Incorporation and Bylaws with the assistance of legal counsel, preparing a communication plan in a run-up to a vote of the membership on this change.
From the consumer perspective you won’t see any changes at all (at least not until the new store opens)! From a Co-op Owner perspective, there will be some changes to the verbiage describing your relationship with the Co-op, but that relationship will remain fundamentally the same. For our community, it is expected that this change will open up an opportunity to further support local food and a healthy community.
We are excited to be moving forward and confident that these changes will not only serve you and our community better but will position the Co-op for a bright future for years to come. Thank you for your continued support!