Tuesday, July 22, 2014

The rise of community owned stores in the rural Great Plains and Mountain West

In addition to this blog, I also write an occasional column for the Idaho Statesman.  I recently wrote about some work of my Economic Development Clinic for a state agency that I thought I'd share in this forum.  Here is the op-ed, also reproduced below:

Idaho's rural cities are used to having their backs against the wall. Many have already witnessed the civic death-spiral of shrinking populations and shrinking opportunities that send people packing. There is often a tipping point in a rural community, when the townspeople either rally and push on together, or pack up and head for the cities. That tipping point could be when a school closes, a big employer closes, or in many towns, when the daily needs of life can be purchased without an hour's trip to the nearest big-box store.

Over the last decade, a small but growing number of communities across the Great Plains and Mountain West no longer served by a market are taking matters into their own hand. When the chain store or general store leaves, residents are banding together and starting community-owned stores.

Last year, my Economic Development Clinic assisted several rural Idaho communities in researching some of most successful of these community entrepreneurs. The stories we heard from across the country told of years of hard work setting up such stores. But we also heard that the hard work brought these communities together in a way that might save them in the end.

What is a community-owned store? Simply put, it is a for-profit corporation where the shareholders are all members of the local community.

By most accounts, the first community-owned store was Little Muddy Dry Goods, of Plentywood, Mont. The star of the community-owned store movement, though, is the Powell Merc in Powell, Wyo.

When a national chain store closed right at the heart of the 5,000-person town's commercial strip just over a decade ago, the community wondered what the future would bring. Not content to see the town die, a group of volunteers banded together, met once a week for nearly a year, created a business plan in that time, and began selling 1,000 shares of the store at $500 a share to community members. About two years later, in 2002, the Powell Merc opened its doors. It has stayed open since. It filled a major hole in the city's commercial strip, provided a place to shop for daily needs, and proved a source of local pride.

Of course, the store's shareholders have not seen as lucrative a return on their investment as the stock of some high-flying tech company might have provided. Shareholders were told upfront not to expect dividends and that their investment was in the community. In those terms, shareholders of the Powell Merc seem to have gotten something better than a share of Apple could have provided: the town's survival and the maintenance of a rural way of life.

Starting a community-owned store is tough. The Community Store in rural Saranac Lake, N.Y., took five years to go from business plan to grand opening. The manager there told us "you need a group with tenacity" to make a store work. But a growing number of communities - places such as Ely, Nev., and Quimper, Wash., and other small towns across Wyoming - are giving it a try.

It might just work here, too. For the small Idaho town on the tipping point of survival, a community- owned store could be just the thing to keep the town livable, and keep the community together.

Stephen R. Miller 

http://lawprofessors.typepad.com/land_use/2014/07/the-rise-of-community-owned-stores-in-the-rural-great-plains-and-mountain-west.html

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Comments

Very interesting, Stephen. Thanks for sharing this. We are (still) in the process of moving to Colorado and I hope to work with rural communities there. I'm glad to hear the co-op concept is getting a whole new life!

Posted by: Jamie Baker Roskie | Jul 23, 2014 4:21:21 AM

Thanks, Jamie. Yes, what is interesting about the community owned store model is that it seems to fit the ethic of the Mountain West and Great Plains in a way that the term "co-op" does not. People particularly seem to like the "for-profit" model, even if most of these stores break even. Reasons people gave for preferring the for-profit corporation as opposed to the co-op were that the for-profit corporation was administratively easier and also that the for-profit model did not divide the community into "members" and "non-members." I did not expect those responses going into the project, but we heard those two reasons stated from multiple community owned stores across the country.

Posted by: Stephen R. Miller | Jul 23, 2014 10:06:51 AM