ST. ANTHONY, N.L.
The Grenfell Memorial Co-Op property has been sold, but its future remains uncertain and its membership likely won’t be receiving compensation for their investments.
During a meeting held on Nov. 19, the Co-op board accepted a $250,000 tender from a numbered company to purchase the property.
The building had been forced to go to tender after the company that held the collateral mortgage called in the Co-op’s loan a couple months ago.
This was the only tender they received.
Co-Op board president John Budgell now expects the numbered company in possession of the property to re-sell it.
When asked whether he thought it would be purchased by another food supply chain, Budgell advised that he did not know.
St. Anthony Mayor Desmond McDonald told The Northern Pen the town had not been approached by a new owner to lease the building.
The Grenfell Co-Op grocery store shut down this past February after 105 years in business.
According to Budgell, the Co-op will not be able to pay off its debt, which was somewhere in the range of $350,000.
But it does have an obligation to pay down as much debt as it can.
Approximately $150,000 will go towards the mortgage company while the board is estimating approximately $60,000 will go to pay off other creditors.
Budgell doesn’t expect anything to be left over to compensate the local membership for their capital investments.
“Any money going to Canada Revenue is the first thing that gets paid and you pay other debts as you can until your money runs out,” he said.
If the board had been successful in selling the property at or above the appraised value, Budgell felt they may have been able to pay something out to the membership.
But the only tender they received fell well short at 78 per cent of the appraised value.
With over 2,000 members, it is unlikely the Co-op board has the time or resources to send a notice out to each of its members informing them of the sale and dissolution.
Budgell said the members will be advised at their next council meeting.
He did not know whether members could claim the investment loss on their income taxes.
Budgell said members had been limited to holding a maximum of $500 in their accounts.
“Once the full share had been realized, the board certainly didn’t take additional investments,” he said.
Seeking a buyer
According to Budgell, from the day the store ceased operation, it had been the Co-Op board’s objective to sell the property to someone who would operate it as a grocery store.
Initially, the board hoped to find a food supplier who would partner with them to re-open the Grenfell Co-Op.
It quickly became apparent this would not happen.
The board then tried to find another food chain to take over the building.
Budgell says they worked hard, contacting companies they thought might have interest in using it as a grocery store. They also held conversations with other interested parties.
They advised those companies when the property went to tender, but none of them submitted a bid.
“We’ve been working really hard to achieve that goal, but it proved impossible,” he said. “We really gave it our best effort.”
Nevertheless, Budgell says the board is hopeful that a grocery store will be operating in that location again, although he stresses that there are still no guarantees at this point.
“At the end of the day, if another grocery store operates out of there and brings back another shopping alternative to the town, I think our efforts will not have been in vain,” he added.
Budgell expects to have a meeting with the membership in the near future to begin the process of dissolving the Grenfell Memorial Co-Op.