Create a Community Co-Op Store in Carlton Landing, OK

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January 17, 2018

IDEAS ON A COMMUNITY STORE . . .

by Grant Humphreys

Dear Neighbors of Carlton Landing,

I trust you’re doing well and enjoying a great start to 2018. I wanted to roll out some thoughts and ideas regarding how we might have a viable Community Store for Carlton Landing.

First, appreciation for Brad. For the past few years, Brad Campbell operated the Boulevard General Store in Carlton Landing. In many ways, it was a real blessing to our community. It might be common knowledge, but I think it bears mentioning that everything about that operation was Brad’s investment in our community. He took out an SBA loan to purchase the home, convert it into a store, stock the merchandise, and operate a retail/restaurant business. He did all of this without any involvement or financial assistance from the developer. At the end of the day, it failed to meet his financial expectations and was not a viable business, but I think Brad should be commended for sticking his neck out, taking on real risk, and working hard to meet an important need for our community. As he continues to operate the Off the Hook Fish House, I’m excited to see him be successful as the food service market continues to expand with the growth of Carlton Landing.

If the experience of the Boulevard General Store has taught us anything, it’s that operating a successful retail operation in Carlton Landing is difficult, if not impossible, without a support structure and/or financial assistance. For a retail operation to remain viable in Carlton Landing, it must reduce operating expenses to a reasonable level in light of the lower revenues resulting from the limited population, maximize its market capture (realizing as much market demand as possible), and clearly understand of the ebb and flow of market demand found in our seasonal economy.

One doesn’t have to look hard outside of Carlton Landing to see that value retail is the name of the game in rural America. Dollar General, consignment shops, and value retail players are the most viable option outside of urban areas with stronger economies. But the typical Carlton Landing owner is accustomed to enjoying quality and not settling for subpar products or service. Applying that standard to a food market, our homeowners would expect to be able to purchase the same kind of food products you might find at Whole Foods, Bill Kamp’s, Lovera’s, Sprout’s, Urban Market, or Eataly. And we want it delivered in a convenient manner and at a reasonable price. But the realities of rural America, combined with the small population and seasonality of Carlton Landing’s local economy, cause free market entrepreneurs to decide against taking on the risk of opening such a store. That’s the reality of our situation, but I believe there is an answer!

Below are several ideas that I invite us to consider as a community. Take a few moments, read these pages, and let these ideas be offered as the opening remarks to a broader discussion that involves as many homeowners as wish to participate. So consider yourself invited into the conversation!

A Community Store for Carlton Landing could be structured as follows:

BY THE PEOPLE, FOR THE PEOPLE. I suggest that a Community Store be created under the Co-Op model which is founded and governed by a Board consisting of Carlton Landing Owners. A possible Board structure could be seven (7) board seats with five (5) board members each representing 20% of the homeowners in Carlton Landing, one (1) board member representing the Association, and one (1) board member representing the Developer. As Carlton Landing continues to grow, Board districts could adjust, but the 7-member board would remain. We have several owners with vast grocery and retail experience. They possess great wisdom and could offer that wisdom as a service to the community by serving on the Co-Op Board.

NON-PROFIT. As a non-profit entity, the Co-Op could avoid paying property taxes and state income tax. All monies collected from Membership Dues and Operating Revenues could therefore be used to cover the cost of goods sold (avg. 60% of revenues) and operating expenses. In the event that cash flow from operations was available at the end of the year, the Board could determine to create a Member Rebate program as described below.

MEMBERSHIP BASED. The traditional cooperative is a membership-based entity. The Co-Op Board could decide to limit membership to Carlton Landing owners or open up membership to the general public. Either way, I think non-members should be allowed to shop in the Co-Op and would pay the retail rate (without any member rebate). These rates would be reasonable and approved by the Board, so no price gouging or unreasonable profit margins applied.

MEMBERSHIP DUES. I’ve put together a brief business plan that assumes each member pays $25 per month. If at least 80% of the homeowners in Carlton Landing choose to participate, that would provide $3,600 each month in dues – enough to cover the cost of labor for someone to staff the Co-Op during operating hours.

MEMBERSHIP REBATES. In the event that the Co-Op realized solid financial performance (either through membership dues or retail sales), the Board could determine to reward Members in the form of a rebate on purchased goods. When the Co-Op is less profitable, the rebate percentage would decrease. As the Co-Op is more profitable, the rebates could be enlarged. Don’t bank on the rebates, but supporting the Co-Op would make them a reality. We’re all in the same boat and everyone shares operating profit and losses together.

DELIVERING QUALITY. To be able to deliver quality products, the Co-Op needs to have an open ear, hearing the voice of members related to what kind of items should be included in the Co-Op’s inventory. Also, the Co-Op could provide a limited amount of refrigerated meat products (which have a 1-2 week shelf life), but a vast amount of high-quality meat products which are vacuum packed and frozen (which can retain great quality for up to 12 months). This will allow the Co-Op to sell a variety of steak cuts, chicken, pork, turkey, and seafood. I’ve already secured a commitment from Lovera’s to provide cheese, a wide variety of meat items from their butchery, shelf groceries, and prepared meals (lasagna, chicken alfredo, etc.).

HIGH LEVEL OF SERVICE. The Co-Op could offer pre-arrival groceries for owners and renters of vacation homes. These grocery orders could be delivered to the Carlton Landing home at the time of check-in and would allow the Co-Op to meet the market need for food without expanding the operating hours unnecessarily.

A FINANCIALLY VIABLE BUSINESS. To remain financially viable and stay in business for many years to come, the Co-Op would need to:

1.       REDUCE OPERATING EXPENSES by receiving free land donated by the Developer, Humphreys Partners 2009, LLC. Also, have limited hours of operation as determined by the Board. This might include lunch hours with more time during the weekends.

2.      MAXIMIZE MARKET CAPTURE through a membership program that attracts at least 80% of the homeowners in Carlton Landing as members.

3.      ADJUST SEASONALLY by altering operating hours in the off-season based on seasonal demand. So, more hours in the summer months and less in the off-season.

GROWING OUR ECONOMY. The Co-Op could serve as:

1.       A DISTRIBUTION CHANNEL FOR ORGANIC PRODUCE. Our Town Farmers could sell their organic produce through the Co-Op in addition to the Farmer’s Market.

2.      A RETAIL INCUBATOR. We’ve provided the pop-up sheds which perform a great purpose about 30 Saturdays each year, but at the end of each market day, those vendors pack up their wares and go home. The Co-Op might provide vendors with smaller displays that could serve as mini-retail storefronts until their business grows to support something more.

3.      A DISTRIBUTION CHANNEL FOR CATERED GOODS. Some Carlton Landing homeowners are considering making prepared meals at home as a side business. They could use the Co-Op as a clearinghouse for their lasagna, casseroles and catered meals.

NEXT STEPS. If we can see 80% (144 homeowners) of the homeowners in Carlton Landing agree to support a Community Co-Op, we’ll proceed with the following actions:

1.       Form the non-profit entity

2.      Elect a Board of Directors

3.      Finalize Co-Op Membership Agreements

4.     Complete the architectural design (estimated to be 1,000 sf)

5.      Complete construction cost estimation

6.      Confirm receipt of Membership Agreements

7.      Confirm food and non-food inventory items and unit pricing

8.      Establish contracts with food suppliers

9.      Execute construction contract

10.   Hire a store manager

11.    Set a date for opening

12.   Complete construction of the free-standing retail storefront near the lake, across Water Street from the Residence Club

13.   Enjoy great food in Carlton Landing!

GRASSROOTS, NOT TOP-DOWN. I am proposing that this is a voluntary membership in a board-governed entity that exists for the common good. That idea is in line with the culture and values of Carlton Landing. It’s in line with the values we profess.

Most communities, if they are able to create a collective support structure with similar desired outcomes, elect to assemble the necessary votes, create a public assessment zone, and place a tax on people. While this kind of government structure is typical and can prove to be effective, my hope is that we see this together as something that our community desperately needs and will choose to participate through voluntary private action.

As a big believer in the free market, I love to see people choose to participate and support local businesses. Becoming a member of the Carlton Landing Co-Op should be something we do, not because it’s forced upon us, but because we take pride in voluntarily supporting the best community around.

I invite your feedback. If you are in Carlton Landing, feel free to come by my office at Park Street and Water Street. Feel free to call my cell phone at (918) 932-9254. Or you can reach me by email at grant@carltonlanding.com. If you support the idea, show that support by signing this petition!

Thanks for your time. Here’s to a great 2018! 

Sincerely,

Grant Humphreys

Town Founder, Carlton Landing



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