Terre Foods Membership Newsletter, Property update

About two weeks ago, the Terre Foods Steering Committee opened negotiations for the property at 248 S. 7th Street--at the corner of 7th and Poplar Ave, in Downtown Terre Haute. I am happy to report that the negotiations are progressing well. With good luck, we should have the property under a purchase agreement within 1-2 weeks.

I wanted to provide the membership with some of the details of the agreement to date, and let you know what's next. The seller of this property has offered to finance the purchase himself, as opposed to getting financing for the purchase from a bank or similar institution. This is a great deal for us, for a number of reasons:

The purchase price is substantially lower than the property was marketed at: $216,000
The rate and period of the financing are better than we could get at a bank: 6% for 15 years
The downpayment of 10% is also lower than required by a bank: $21,600
Financing the purchase through the seller lowers the overall project cost needed to be financed by banks, funds, and member loans by nearly one quarter of the total. That is, rather than going to the bank with a $1 million project, we will now be going to the banks with an $784,000 project, with approximately $250,000 of that being financed via member loans. This leaves a total of $534,000 to be financed by the bank--a far easier amount to finance than $1 million, no doubt!

While the financing for the purchase will be secured, we will still need to finance the remainder of the project--design & construction, hiring, stock, and more. According to our current purchase agreement, we will have 90 DAYS to secure all remaining financing, or the contract will dissolve and the property will go back onto the market.

Please watch the mail for your Member Loan Packet. Member Loans are how we will secure the remaining financing for the construction of our store; they are a crucial part of opening any consumer cooperative. When your packet arrives, read through the material provided, and make as generous of a loan as you are able to make. Remember, these are loans, not donations--we expect to repay all loans within the 5-10 year period chosen by the lender.

We are close--we are so close! Thank you all for your patience and support. We know that this has been a long process, but it's about to get very, very fast. However, if things go well, and we can all participate to the greatest extent we are able, our store will be open by the Spring of 2010!