Here are some questions that we’ve gotten about the proposed $4 million remodel of Willy East, and our responses. If you have questions not answered on this page, please email firstname.lastname@example.org. We will answer as many as time allows. We will prioritize those questions asked by multiple Owners, and add them to this page. You can also ask questions at our Owner Input session on Tuesday, July 9th at 6:30pm in the Willy East Community Room, or at the Annual Meeting & Party business meeting (6pm-7:15pm).
Using traditional financial ratios and comparing ourselves to other similarly sized grocery co-ops, Willy Street Co-op is financially healthy. Our sales continue to grow. We earned a surplus (aka profit) the last couple of fiscal years. Our debt-to-equity ratio is approximately 1.0 and our current ratio is over 1.9. We also ended Fiscal Year 2013 with approximately $4.5M in cash.
From a strictly financial perspective, the Board is recommending that the remodel expenditure not exceed $4M because it is an investment we can afford without jeopardizing our interest in a possible new store. We have not finalized our sources and uses or projections, but we've done enough modeling to know the following:
- Financing: We believe we will contribute $2M in cash and borrow up to $2M.
- Debt: With the additional debt our debt-to-equity ratio will be closer to 1.3. We expect it will take 2 to 3 years to return our debt-to-equity to 1.0.
- Cash: We also expect it will take 2 to 3 years to rebuild our cash position.
- Sales & Risk: Investing in Willy East is less risky as we know it generates over $23M in sales and is profitable. It reduces the unknowns and allows us to make this investment without sacrificing future opportunities.
Prior to moving forward with the major expenditures of the remodel, Willy Street's Finance Committee and Board will review a detailed budget and projections.
Specific plans for the remodel of Willy East are still up in the air, contingent upon the results of this referendum. We can provide you with some big picture information on what a $2 million remodel and a $4 million remodel will mean for our Co-op. In either scenario, we intend to make this a high quality remodel project with an emphasis on sustainability whenever/wherever possible (more on that below).
If Owners approve management's request for up to $4 million for the remodel, we plan to:
If Owners directed management to move forward with a $2 million remodel, we plan to limit our focus on 3 major areas of improvement.
We also hope to remodel the bathrooms up front, but may not be able to add additional customer bathrooms in a $2 million remodel. We would not be able to make other improvements to customer experience at this time.
We have focused on sustainability in this remodel by looking for gains in energy efficiency (mainly through equipment upgrades), and by minimizing our waste during construction through recycling materials, reusing existing materials whenever/wherever possible, offering equipment to other co-ops, etc. We are investigating LEED certification, but first need to determine our budgetary constraints.
We are asking Owners to approve an additional $2 million, bringing the total up to $4 million.
There are multiple reasons to remodel Willy East. First and foremost, there are many important pieces of maintenance that need to be done to keep the store functional and safe. Second, the Board of Directors back in 2004 set a remodel of 1221 as an important expansion priority for the organization, so the Co-op can better meet the needs of Owners who shop at Willy East. We feel that there are many opportunities in this expansion project to make Willy East a more enjoyable place to shop. Third, we would like to do a number of green building initiatives that will make our site more energy efficient and sustainable into the future. $4 million will allow the Co-op to complete some much needed maintenance to our roof and floor, update some of the equipment in the store, improve the shopping experience through a revised floor layout and expanded commons space, revamp our loading dock and receiving area, and pursue LEED certification.
We plan on expanding our deli and cheese departments and are expanding our meat offerings to be more similar to those found at Willy West. We also plan to increase the number of register lanes, which we expect will help us maintain a speedy check-out process and help move people through our store — and cars through the parking lot — faster.
Yes. At this time the Co-op is in a financially secure position and can afford a $4 million remodel. Willy West is doing very well. Two and a half years after opening we are exceeding sales goals we hoped would be reached 5 years after opening. Sales at East continue to grow. Our Director of Finance, David Waisman and the Board’s Finance Committee are both in favor of this dollar amount. David states, “Using traditional financial ratios and comparing ourselves to other similarly sized grocery co-ops, Willy Street Co-op is financially healthy. Our sales continue to grow. We earned a surplus (aka profit) last year (Fiscal Year 2012) and will do so again this year (Fiscal Year 2013). Our debt-to-equity ratio is approximately 1.0 and our current ratio is over 1.9. We also expect to end Fiscal Year 2013 with approximately $4.5M in cash. This means we have the capacity to invest cash and take on additional debt to finance the remodel. Lastly, investing in Willy East is less risky as we know it generates over $23M in sales and is profitable.”
$4 million enables us to make many of the most important renovations needed at Willy East while preserving additional capital for other opportunities that may present themselves.
When we asked for Owners to approve $2 million last fall, we had a much smaller remodel project in mind. After receiving lots of great suggestions and comments from Owners and staff, we realized that $2 million would not be enough to make most of those suggestions become real. Additionally, key maintenance work to improve the heating, ventilation and air conditioning (HVAC) systems, the roof and the floor that had been deferred to a later date has become a top priority at this time.
No. The Board of Directors set a cap of $4 million on the 1221 remodel project to ensure that we are able to expand into a third location should we choose to do so.