A new, higher budget for the Skidegate food store and a strong sales year were highlight topics at the annual meeting of the Haida Gwaii Consumers Co-operative Association in Masset. (Andrew Hudson/Haida Gwaii Observer)

Update: Local start-up cost for Skidegate Co-op is $8 million

Co-op must raise start-up loan to $10 million, but can expect $2-million grant once new store opens

Eight million, not ten.

That really should be the headline number for talking about what it will cost the Haida Gwaii Gwaii Co-op to build and stock a new food store in Skidegate.

While it’s true that Haida Gwaii Co-op members will need to vote on borrowing up to $10 million for the new store, Federated Co-operatives Limited (FCL) will contribute a $2-million grant for the store the day after it opens.

“At the end of the day, the borrowing that we’re doing is about $8 million,” says Len Labossiere, general manager for the Haida Gwaii Co-op.

The front-page story in today’s print Observer does note the $2-million grant from FCL, but readers had to get past eight paragraphs and a $10-million headline to see it.

“I picked up a couple of hairs that fell of my head when I read it,” Labossiere said.

Labossiere explained that FCL provides a start-up grant of 20 per cent of the cost of a new store, so long as the store can expect to return at least eight per cent on the investment.

Given the high demand in south-end Haida Gwaii, the new Skidegate food store has an expected return rate well above that threshold — 10.2 per cent.

Labossiere also noted that the cost to open the new store includes some $300,000 to $400,000 in inventory, so it’s not only construction costs that are factored in to the start-up loan.

“It’s complex,” he said, noting that it’s not like the Haida Gwaii Co-op is going to a bank for a $10 million loan. All the lending is done within the co-operative.

Local Co-op members voted overwhelmingly in favour of a $6-million loan for the new Skidegate store last May, but no contractors were willing to build the store using that budget.

Special votes will be held at a series of Co-op member meetings later this February to raise the loan to $10 million, with the understanding that the FCL grant will reduce the net cost for Haida Gwaii Co-op to $8 million.

“Due to our location, contractors are reluctant to come to our island, and for that we pay a premium price,” said Bob Isaacs, board president of the Haida Gwaii Consumers Co-operative Association, speaking about the the annual general meeting on Jan. 28.

“Should the membership decide not to proceed with funding, they will need to understand there will be a price for not moving ahead,” Isaacs added, noting that the current Skidegate store is undersized and needs major fridge upgrades.

“If we do not move forward, we open the door to other food competitors, which will negatively impact our co-operative.”

While the floor plan will remain the same — the new store will be about 16,000 square feet, twice the size of the existing one — Isaacs said the Co-op will trim some costs on materials and exterior decoration.

Labossiere said so long as the loan is approved, shovels should hit the ground in March and the new store will open in early 2019.

“When the funding’s there, we need to be ready to move,” he said.

Sales figures presented at the Jan. 28 annual general meeting in Masset show the Co-op’s three Haida Gwaii stores did a record $15.2 million last fiscal year, up $1.2 million from the year before.

Sales rose 10 per cent at the Skidegate food store, eight per cent at the Masset food store, and 6.2 per cent at the Masset home and building supply. The annual allocation for Haida Gwaii Co-op members will be 2.5 per cent this year, with a total cash payout of $367,192 shared among nearly 3,800 members.

“I think those numbers are extremely positive, and obviously indicative of Haida Gwaii and its global recognition,” Labossiere said.

“We’re becoming more and more known, and getting some tourism — it’s nice to see some growth.”

Renovations over the last year include new siding and a new storage area for the Masset home and building supply, as well as new, high-efficiency fridges for the Masset food store.

Like the Masset food store, Labossiere said the new store in Skidegate will use similar fridges and heat pumps that are well suited to Haida Gwaii’s temperate climate. It will also have heat-reclaim coils that will recycle heat from the store refrigerators and LED lights.

About 60 staff are working with the Haida Gwaii Co-op this winter, Labossiere said, and another 10 will be hired in summer when stores are open longer. The new Skidegate store is expected to require 13 new staff members.

At the AGM, Labossiere and others congratulated David Adams, who recently retired after 28 years, and several long-serving staff members including Mary Frick, who is celebrating her 30th year working with the Co-op.

“We’ve got lots of great people, so I don’t want to pick on Mary,” Labossiere said.

“But as you shop our stores, Mary’s personality, Mary’s service are what we as an organization all strive for.”

Also at the meeting was Doug Potentier, a board director with the Federated Co-operatives Limited — the larger, Saskatoon-based co-operative that the Haida Gwaii Co-op is part of, along with 189 other food, fuel, agriculture, and building supply stores across Canada’s four western provinces.

Potentier said FCL had a strong year too, with sales rising to $9.8 billion from $8.4 billion, thanks in part to a turnaround in its Saskatchewan oil production and refining business. FCL profits for the year totalled $575 million, and from that, the Haida Gwaii Co-op received a patronage refund of just over $300,000.

Besides the patronage increase, Potentier noted that FCL has increased its Community Spaces budget from $1.5 to $2 million. The program offers one-time grants of $25,000 to $150,000 for local non-profits and charities.

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