Letter From the GM

Hello all, it’s Mike, the GM at your co-op. I want to start the new year by letting you know that the KCFC Board and I are committed to transparency in our endeavors to get the store opened. With that in mind, I’ll be sending out a letter to keep you aware of what’s happening: This is the first in what will be a monthly communication from me.

The Co-op is alive and well; your Board and I have been working hard. Many of our challenges are behind us and now things are starting to move at a more rapid rate. I’ll give you more detail below about how we’ve achieved that.

FINANCIAL UPDATE

I'm excited to let you know the project's funding story is nearly closed. Why nearly? We are fully funded according to current budgetary estimates. Woohoo! However, we are currently working on contracts for labor and it's possible may be more costly than initially estimated. Until every contract is signed, we will be conservative and say nearly.

As many of you know, funding has been a big obstacle for KCFC for many years. As a member-owner, I think it's important to understand where our co-op's funding comes from:

  • Funding through Members: KCFC currently has more than 840 member-owners! This is a $168,000 testament to our community’s willingness to invest in a project we believe in—a true reflection of people working together to accomplish a common goal. And that number continues to grow as new owners join monthly. Additionally, our owners have been generous in making loans to KCFC, providing us with more than $329,000 in funding over the past few years. This has been incredibly important for a reason that you may be unaware of: This base of support has allowed us to pursue other funding opportunities. We’ve been able to approach foundations, organizations, and the city of Philadelphia and have been successful in securing grants and loans for approximately $1.5 million.

  • The challenges of funding: Keep in mind that the budget for KCFC is $1.8 million. Securing that amount of funding is no easy task for a number of reasons. Most traditional lending institutions require a personal guarantee of some sort—easy for an owner, but not for 840 owners! Banks have loan interest rates that are prohibitively high for KCFC; they’re not sustainable in the long run. We’ve needed to find and work with organizations that are open, flexible, and creative, and we’ve been able to do that.


CONSTRUCTION UPDATE

I want to address construction next. Before anything can happen at the site, there are months and months of preliminary work with lawyers, an architect, a general contractor, and city agencies—we’ve seen delays with them all. These include getting signed contracts from lawyers, getting finalized plans from our architect, submitting those plans to the city, hiring a general contractor, getting the city’s feedback on our plans as well as permits and licenses. We received the signed contracts and finalized plans, submitted the plans, received them back with a few comments, made the necessary adjustments, and have re-submitted them to the city.

SUBCONTRACTOR IDENTIFICATION AND SELECTION

One of the first responsibilities of a general contractor is to build a team to complete the project, a team that the GC oversees. These subcontractors include demolition professionals, electricians, plumbers, HVAC professionals, carpenters, and painters.

Because of the amount of city funding for KCFC, there are certain requirements that must be met having to do with subcontractors. The main one is that we are required to use a certain percentage of city-certified and registered minority- and women-owned businesses I have been working closely with our GC, who is working with the city’s Commerce department to find, update, and even help to register contractors to make this happen. It’s been a time-consuming process: There are lists to make calls from (emails are not sufficient per the city), subcontractors to interview, walk-throughs by subcontractors, and possible city certifications and registrations to be obtained.

While this has added some time to the process, hiring women- and minority-owned subcontractors reflects KCFC’s philosophy to create economic opportunity and empowerment in the neighborhood. The Board and I are committed to seeing this happen.

MOVING FORWARD

This letter is the first step in being more transparent. Know that we heard you and we need to do a better job of keeping you all informed. I will be updating you on a monthly basis, keeping you up to date with what is happening within the construction process and will be sharing a glimpse into the operational decisions when the time comes. My commitment is to building an awesome store—one that supports the customers it serves, the vendors we buy from, and the people who work here to make it all happen.

Thank you for your continued support of KCFC. I know it may not always be easy, but I promise this crazy ride is almost over. Have a little (more) faith and I look forward to seeing you all in our store on Coral Street.

Feel free to reach out to me directly with questions, comments, or concerns, I’ll be happy to answer them or put you in touch with someone who can.

Michael Richards
General Manager
gm@kcfc.coop

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