Neechi Food Co-op owes more than $5M, and province says interest adding up

Neechi Food Co-op is carrying more than $5 million in debt. 

The North End grocer, restaurant and gallery owes around $3.8 million to the Assiniboine Credit Union and $1.73 million to the province.

That money from the province is in addition to $2.3 million it received in grants in 2013. The federal government also provided Neechi with $1.3 million in funding at that time.

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A spokesperson for the department of Growth, Enterprise and Trade said in an email that the province provided two loans to the group operating Neechi Commons: one in 2014 for $1.1 million and another in 2015 for $500,000.

The spokesperson said the co-op has not made any principal payments on the loans and interest is adding up.

"In the past we made some [interest payments], but we haven't been making them recently," said Russ Rothney, treasurer of the Neechi Foods Co-op board.

Rothney said the board is meeting with the province on Friday. The province said Neechi has not asked for any additional financial help since the building and property was listed for auction.

"Last year was a tough year for us," said Rothney. "We didn't achieve the [operating] grants we were anticipated ... without that we ended up again with a substantial cash lost, whereas we thought we were going to break even."

A former employee and board member said he thinks focusing on grants is where things took a turn for the worse for Neechi.

Kelly Edwards worked there from 2014 to 2016. He worked in sales and said he was part of the team who brought in a meat manager and implemented a strategy to dramatically lower meat prices.

"During that time our sales increased by the millions because [the manager] had these connections, he had business know how, how to do things," said Edwards.

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"It's because we were focusing on business development, every manager in the building wanted to increase their sales," he added.

Edwards thinks once things improved the focus shifted to grants. He said he wasn't surprised when he heard that Assiniboine Credit Union had listed the property and building for auction. However, he said he remains optimistic.

"I absolutely think that Neechi still has an opportunity to turn itself around," he said. "But the board members and the management team of Neechi need to come up with a different approach than what they've been doing for the past two to three years."

Rothney said Neechi still needs grants to operate because it is a social enterprise. 

"Our dependency on grants is not high, in fact it's small compared to a typical social enterprise," he said. "Most of our revenues by far are coming from our sales."

Rothney said the grants cover training costs for new staff and then pay their wages.

"It's important to understand that there is a fundamental difference between responding to the social crisis that surrounds the absence of economic opportunities and directly meeting that challenge head-on," he said.

Rothney said board president Louise Champagne will attend a meeting Friday morning organized by community members who want to find solutions to save Neechi Commons.