What's Next For Troubled Harvest Co-Op: Buyout Or Closure?

JAMAICA PLAIN, MA — The Harvest Co-op Market needed to scrape together $300,000 or it would have to close in August. Now that it's August the outlook has changed a bit and the cooperative market with retail space in JP and in Cambridge may actually have to close by the end of the month after decades of history. That's according to a the public statement sent out this week to the community.

There is some hope, she said, but it also looks like the Co-Op may have to close, after all.

"The most recent financial projections developed for the proposed Harvest Co-op capital campaign showed that even with a successful campaign, it would be extremely unlikely that Harvest could recover financial stability because of our current debt levels. The most likely result of Harvest continuing to operate as it is now would be that we would need to close our Co-op," according to the statement.

But there still may be an alternative solution. The National Co+op Grocers - a kind of national co-op for co-ops with the aim of helping to unify natural food co-ops - reached out to the board and proposed to create a new consumer-owned Boston Food Co-op.

The National group said it would be willing to buy Harvest's stores and invest in making that happened.

In the meantime, Harvest accepted a loan from the NCG. The $50,000 it said would help tide them over til the end of the month as NCG and Harvest decided if this is the way they wanted to go.

If NCG were to take over, it would likely focus fully on local, organic, natural food rather than trying to be everything in such a small space. They also mentioned putting more focus on deli and prepared foods and adding seating and some other equipment updates in both locations, according to the letter.

At this point there aren't many other options on the table.

"This proposal is still just that: a proposal. Either Harvest or NCG could find that they are unable to move forward with it. Given the financial projections, we cannot ethically go forward with our capital campaign. If this proposal does not go forward, unless we are able to find another unusual solution in a very short timeframe, it is likely Harvest would close through a bankruptcy or liquidation process," according to the co-op.

Next up? There's a Community Town Hall Monday, August 6, at 7 p.m. in Cambridge at the Reservoir Church Sanctuary for the community to have a chance to hear more about the proposal.

The letter:

The Future of Harvest: Proposal from National Co+op Grocers (NCG) to Harvest Co-op Markets

The most recent financial projections developed for the proposed Harvest Co-op capital campaign showed that even with a successful campaign, it would be extremely unlikely that Harvest could recover financial stability because of our current debt levels. The most likely result of Harvest continuing to operate as it is now would be that we would need to close our Co-op.

The Board was working to digest this information and communicate to member-ownership when NCG contacted the Board to discuss an alternative solution. The Board spoke with C.E. Pugh, COO and Interim CEO of NCG, regarding their proposal on Monday, July 16, and voted to move forward with investigating this proposal via a public (virtual) board meeting on Wednesday, July 18.

NCG’s proposal to create a new Boston Food Co-op

NCG believes there is significant retail potential in this market for a consumer-owned cooperative. In order to provide the Harvest with another option besides closing its doors, and with the support of NCG’s Board, NCG has offered to invest in the formation of a new consumer-owned co-op which would buy Harvest Co-op’s assets and operate its stores moving forward.

The specifics of NCG’s proposal for a new co-op are yet to be determined. The Board’s vote on July 18 was to accept a loan ($50,000) from NCG via their Co-op Assistance Fund to ensure that Harvest has sufficient working capital while both parties conduct the necessary and appropriate due diligence to explore this proposal. This will allow time for Harvest to continue operations while NCG does a market study and other necessary research, and the Board brings the proposal to Harvest member-owners and community for discussion and feedback.

Ultimately, the decision to move forward with a specific offer is in the hands of Harvest Co-op’s Board and member-owners. Any decision to complete this transaction is subject to satisfactory due diligence and approval by NCG's Board of Directors as well as Harvest’s Board of Directors.

Next steps: Feedback from the Harvest community

Initial feedback from member-ownership has been largely supportive in the Board exploring this proposal from NCG, but the Board wants to provide opportunities for thorough discussion and inquiry of what this might mean for Harvest and our community. We are working to schedule a special meeting of member-owners where the Board and a representative from NCG will answer questions and collect feedback on this proposal. We are looking at dates in late July and early August, and will communicate via email and in-store once the date and location are set. We will also be setting up other ways for you to submit questions and comments.

Harvest Co-Op In Trouble, Needs $300K: But Here's What You Can Do

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Photo by Jenna Fisher/Patch Staff