Section 6 Financial Summary
Additional funding sources
19. Describe any additional funding sources to be used in the project.
The City and County of Schenectady are working collaboratively with ECCG to ensure that the goal of locating and operating a community grocery in downtown Schenectady can be realized.
Schenectady County has committed $3 million, of which $2,820,709 is available as a match for the Food Access grant. NOTE: These funds are fully committed until December 31,2025, as long as the remaining funds needed for construction and equipment/systems are committed (this is not an opening date requirement). A Food Access Expansion award is the missing piece that will ensure that these County funds remain available, and that the project can succeed.
The City of Schenectady allocated $1 million of its American Rescue Plan Act (ARPA) funds, of which $152,551 is available as a match for this request.
The remainder of both the City and County grants, plus an additional $150k recently awarded by the USDA, will be utilized for essential project development and start-up expenditures that are not eligible under the NYS AGM Access Expansion Grant Program.
Potential Funding Opportunities:
ECCG is in dialogue with the Cooperative Fund of the Northeast about borrowing up to $1.2MM for a commercial loan. Ideally, the amount of debt taken on would be limited, as margins are very tight and loan repayments will impact financial sustainability. Similarly, the landlord for the proposed site is prepared to front up to $900,000 for building fit up, but this would be passed on to ECCG through a higher lease rate, which will also impact financial sustainability. An award of $2.1 million from the Food Access Expansion Grant Program would mitigate these challenges, limit the need to take out loans or pay a higher lease rate, and accelerate the path to the community grocery’s financial stability.
Total Food Access Expansion Project Uses: $5,073,260
Food Access Expansion Grant Request: $2,100,000 (41.4%)
Total Committed Project Sources: $2,973,260 (58.6%)
Current financial statements
20. Please provide a statement of financial condition for your organization, including the current annual operating budget and the last third-party audit for your organization.
The City of Schenectady (applicant) will be responsible for grant administration, and oversight of project implementation by ECCG. The City provides services for 65,000+ residents, administers an annual budget of over $115MM (2025), and supports 612 municipal employees.
The financial condition of the City of Schenectady, as applicant, is described below.
• S&P Global Ratings raised its long-term rating to ‘A+’ from ‘A’ on the City of Schenectady, N.Y.’s general obligation (GO) debt.
• At the same time, S&P Global Ratings raised its short-term rating to ‘SP-1+’ from ‘SP-1’ on the city’s outstanding bond anticipation note (BAN).
• The upgrade reflects the ongoing economic expansion of the city’s tax base with increases in economic indicators, coupled with strong performance, with maintenance of reserves, in line with peers.
• The outlook on the long-term rating is stable. The city's faith and credit pledge secures the bonds and BANs.
Five-year projected financial statement
21. Provide a five-year projected financial statement for the retail food store.
Projected Five-year Financial statement
Plan for long-term financial stability
22. Explain how the overall project goals and objectives will be funded after the terms of the grant end to maintain food access in the long term.
Food co-ops operate with a triple bottom line: people, planet, and profit. Co-ops put people and planet first, and they are deeply embedded in the community, allowing the co-op to be nimble in its operations to directly meet the evolving needs of the community. Co-ops also recognize that profit is the critical third leg of the triple bottom line: profit is necessary for long-term sustainability.
Our recent market study, conducted by G2G Research in August of 2024 clearly illustrates strong sales potential, and notes that store maturity will not occur for about four years. Our projected five year financial statement illustrates sales growing steadily at approximately 5% per year. The receipt of this grant will reduce our cost of financing, and significantly impact the bottom line.
To ensure long-term sustainability, ECCG will lean on its strategic partnership with National Co+op Grocers, the experts in ensuring long-term financial viability of cooperative grocery stores in a wide variety of environments. As member-owners of National Co+op Grocers, they are more than just a consultant or strategic partner for ECCG; we actually have an ownership stake. In other words, in the same way that Schenectady residents literally own ECCG; ECCG literally owns NCG. Through participation in NCG, we have ongoing access to national specialists for all aspects of grocery retail (produce, packaged grocery, meat, seafood, prepared foods), as well as retail financial management, human resources, IT/POS infrastructure, and more. As best practices in any or all of these fields evolve over time, NCG will be our strategic partner to ensure that ECCG remains at the cutting edge, moving in sync with a network of 164+ co-ops in 39 states with over $2.5 billion in collective annual sales. This gives us a key strategic advantage extending far beyond the grant term, ensuring that ECCG remains not only a viable, but a thriving, staple of food access in Downtown Schenectady in the long term.
Matching funds for five-year contract
23. What is your ability to secure matching funds for the duration of the five-year contract term and commitment of match.
As noted in Question 19, to date, a total of $2,973,260, out of a total $5,073,260 project cost, has been secured. The City of Schenectady has committed $1 million to ensure the opening of the community grocery. $152,551 of this City grant will be used as a match for this request. Schenectady County has committed $3 million of which $2,820,709 will be used as a match for this request.
The remainder of the City and County grants as well as an additional $150k awarded on October 31, 2024 under the USDA America’s Healthy Food Financing Initiative will leverage a Food Access Expansion Grant award by NYS Department of Agriculture and Markets. These leveraged funds will be utilized for essential expenditures related to project development and start-up, that are not eligible expenses under the Food Access Expansion program.
The County is committed to its pledge of $3MM as long as the necessary capital funds are raised/awarded to complete the construction and commissioning of the facility by December 31st 2025. A Food Access Expansion Grant award by NYS Department of Agriculture and Markets would fill the financing gap needed to ensure that this grant is not recaptured, and ensure that this important project can commence.
The project timeline is estimated at 16 months from November, 2024 to April, 2026. Based on the 5 year financial projections (attached), not only will the Food Access Expansion project be complete - the grocery will also be sustainable within the five-year contract term. In short, the award of funding being requested through the Food Access Expansion program will accelerate the ECCG’s path to financial sustainability.
