APPLE STREET MARKET COMMUNITY OWNER MEETING – FEBRUARY 20, 2019 PRESS STATEMENT
Apple Street Market’s Board of Directors held an Owner’s Meeting open to the public on Wednesday, February 20th, 2019 to report on significant, unexpected setbacks in the cooperative’s financing, and to assess community support for different options to address this critical situation. The intent was to gather input from the cooperative’s owners and other community stakeholders on how to best make use of the time and talents of our owners and community partners to best address our community’s dual needs for family-sustaining employment and healthy food at competitive & affordable prices.
In 2017 the cooperative’s institutional funders required that the building be owned by a neighborhood organization. After just over a year of negotiations, NEST – in partnership with the City of Cincinnati, purchased 4145 Apple Street this past November to secure this important property for development that would benefit the community. Asbestos abatement was completed early this year, making the property ready for development.
In the third week of January, Finance Fund terminated underwriting for the project because of Apple Street’s lack of working capital in hand. Even more significantly, the following week, PNC analysts determined that their tax liability was much lower than anticipated because of the 2017 tax reform law and that they had over-invested in tax credits in 2018. They informed NEST that they were cancelling all new 2019 investments using New Market Tax Credits (NMTC) across the country, including this one. This caused a cascade effect. First,this led to our important partner, Cincinnati Development Fund, to release Apple Street’s allocation of New Market Tax Credits (which they had been holding for 2 years), because they needed to get the funds disbursed in order to have a chance of receiving new allocation of credits in the upcoming round. The NMTC were bringing 1.5 million of equity into the project.
Since Apple Street’s financing became unclear and NEST’s agreement with the City has an obligation for the property to create jobs and/or low-income housing within two years, the next effect is that NEST, in order to ensure they meet this timeline, will be releasing a Request for Proposal this spring to stay on schedule. NEST is encouraging Apple Street to respond to the RFP.
Approximately 100 attendees discussed the prospects for continuing to fundraise for development of the 4145 Apple Street site, both as the cooperative had already intended and possibly as part of a partnership with another developer, while also investigating other sites and models for increasing food access. The feedback showed overwhelming support for continuing the project. Apple Street’s first fundraising goal by this summer is to raise $800,000 to be in a good position to receive the RFP from NEST. Apple Street is creating an escrow account where 75% of funds raised will go while 25% will be available for moving the project forward. Community owners will assess progress at the beginning of September to determine whether these funds will be released to the project or returned. Remarkably, at the meeting, community owners Heather and Jasper Sturgill pledged 100,000 from their retirement account, saying they wants to vote with their dollars for the community they want to live in, for a store that is so much more than a store, a community partner that will be meeting the need for healthy food, honoring workers, helping people live healthier lives with a teaching kitchen, helping people connect with one another, and keeping money circulating in the community.
There are multiple opportunities for community owners to get involved. Helpful entry points include a volunteer meeting that occurs the first and third Tuesdays of the month at 7pm at Happen or the board meeting at 6pm the first Thursday of each month at Toy Lab (right next to Happen).
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GOP tax bill plays role in sinking financing for Northside grocery store , Cincinnati Business Courier