Fin inancing Heritage – A Cooperative Alt lternative Jay Yanota – CODC Seth Leon - ACCA
In Introduction • The Municipality of Crowsnest Pass is a collection of 5 towns located on HWY #3 in the Southwest corner of Alberta • Located on one of the major rail & road routes through the Rocky Mountains it became home to some of the largest coal mining operations in Canada in the early 1900s • It quickly became a melting pot of engineers, architects, craftsman and workers from all over the world who created a marvelous collection of buildings and facilities that form an enduring cultural heritage. • Several historic buildings were empty and quickly deteriorating .
The Backdrop • Following the 2008 global financial crisis there was a tightening of bank lending and hesitation toward investment • A proposed multi-million dollar resort/conference center & nearby housing development was heading into receivership . • Local municipal optimism was at an all-time low . • No “White Knight” or “ the Cavalry” on the horizon . • Two local businessmen came to the ACCA with an idea.
What is is Unle leashing? Local Leadership + Community-Based Financing = Opportunity Development Co-op (ODC)
A Cooperative Way to Unleash Local Capital A Project + • The Opportunity Development Co-op (ODC) Model + A Promoter & Salesman + A few surprises = Why this works!
How does it it work? The program helps you: • Gather a group of friends • Incorporate your Opportunity Development Co-op (ODC) • Find a business opportunity • Find an entrepreneur(s) to run it • Collect local money (incl. RRSPs) • Invest in the business opportunity • ROI to member-investors
Co-operative Definition A co-operative is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise. • Democratically member owned and controlled enterprise • Created to meet an economic, social, or cultural need of the members • Pools resources and shares risks www.acca.coop
Why the Co-op Model? Number of cases of investment fraud using a corporate shareholder model in Canada/US – • THOUSANDS Number of cases of investment fraud using the cooperative model (across Canada and the US) • ZERO • Spreading out the risk – up to 100 investors per investment • Ability to raise capital – up to $1,000,000 – per investment
Id Identify fy the Needs • What are some of the business development opportunities in your community that people talk about but don’t don anything about? • What are people bi….ng about? • What are the common themes that come up in your communities economic development plans? • What business owners may be getting close to retirement? • Envision the future of your community and what kinds of new businesses could help your community reach that vision?
The In Investment Process • How will you get the word out? • Securities Commission – there to protect investors - How will you do the same? • How will you determine the number and cost of Membership Shares? • How will you determine the number and cost of Investment Shares? • How will you actually sell the shares? • How will you deal with the delay in getting RRSPs in?
Current Unle leashing Communities • Crowsnest Pass - Historic building • Smoky River - 55+ Housing • Vegreville - Withdrew • Athabasca - blind pool • Black Diamond – withdrew • Didsbury - Café/Bakery • Drumheller - Renewable Energy • Three Hills - Medical Clinic • Vulcan - Renewable Energy • Thorhild – Mechanics Shop • Elnora – Housing Development • Killam – Adult Housing • Calgary – Seniors Housing/Renewable Energy • Edmonton – Green Housing/Renewable Energy
Fin inancing Crowsnest Pass Heritage The Cooperative Approach • Using existing legislation streamlined the formation of co-ops • Built on 20+ previous organizations that have proven the model • Canada-wide, formal support in Alberta through the ACCA • CODC was incorporated and formed a partnership with ACCA • Two optimistic businessmen purchased the Peuchen block
Why th the Peuchen Block? • In 1911, owner W.J. Budd built this structure for a reported $7000. • The building was named after Colonel A.G. Peuchen, a Titanic survivor and purchaser or McLaren lumber interests. • Early tenants included the Blairmore Trading Co. (Kalil's dry goods) and the Blairmore Hardware (Dutil Hardware). • Later occupants included a poolroom, a dentist's office, a customs office, a restaurant, and an RCMP office. • In 1938, the building was purchased by John Kubik. He remodeled part of the ground floor for his general store. Kubik also operated a meat and grocery business next door next door.
Why th the Peuchen Block? • It had been vacant for years • It had a large footprint • 5000 sq. ft. main floor commercial • 3500 sq. ft. upper floor residential • Suitable to multiple tenancies, spread out rental risk • Structurally sound • Centrally located in downtown • Everyone in the Pass had shopped there at one time • Risk was in balance with the reward potential!
Downtown Blairmore 1920s CM BL 20 21
Peuchen Blo lock emerged as as an an ic iconic str tructure th that pla layed a a vit vital l rol ole in in th the communit ity an and was a a ce central l feature in in downtown Blai lairmore.
2006
Main Street Today Shane Stewart Promoting The investment Show and Tell
2015
Cr Crowsnest Medic ical Ryp Ath thle letic ics 4 Apartments
Don’t Forget the “Weather - proofing” • The investment needs to survive economic fluctuations. • Build and maintain a 5-year economic model. • Think about everything that can go wrong ...... some will happen. • It did take longer • It did cost more • It does cashflow well • It will be sustainable
Will communities flock to co-op financing? CM BL 20 21
Thank you! • The Visionaries – Larry Saloff – CF Analyst, Shane Stewart – Businessman & Entrepreneur • The Support Team at ACCA – Paul Cabaj, Dan Ohler, Seth Leon and their Unleashing Local Capital program • Crowsnest Pass - Believers & Investors • CODC Board – ensured this investment was successful and that this heritage asset is financially sustainable HISTORIC PHOTOS courtesy of Crowsnest Pass Museum
More CODC in information Jay Yanota Chair - CODC www.codcoop.org 403-606-0094 yanotaj@shaw.ca More ACCA in information Seth Leon Co-op Research Officer ACCA 403-336-0468 sleon@acca.coop More Crowsnest Pass Heritage Information HISTORIC PHOTOS courtesy of Crowsnest Pass Museum http://www.crowsnestpass.com/public/download/documents/13944 http://www.crowsnestpass.com/public/download/documents/13945
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