Girl Talk, Saranac Lake — Plenty of people don’t like Wal-Mart. Plenty of them protest when Wal-Mart wants to build a store nearby. But very, very few take their economic futures into their own hands the way the residents of Saranac Lake, New York, a small Adirondack town about 40 miles from the Canadian border, have.
In 2002, the local Ames department store closed, and the 5,000 full-time residents of Saranac Lake suddenly had to drive 50 miles to buy basic provisions like sheets and underwear. They needed another option. For years, Wal-Mart, which considered opening stores in town in 2002 and 2005, looked like the only one. Then a resident of Saranac Lake, Gail Brill, discovered the community store in Powell, Wyoming, which sold the dry goods that Saranac Lake needed.
Community stores are common in Britain, but they’re extremely rare in the U.S. They’re funded by residents who buy shares. Unlike a co-op, they’re open to anyone. There is no organized way to trade shares, but in a particularly good year, shareholders might get a dividend.
When a representative from the Powell community store came to speak in Saranac Lake in May 2006, nearly 200 people showed up to listen. At the end of the presentation, attendees were asked if they would invest to open a similar store in their town. “Nearly every hand shot up,” says Melinda Little, who is now the community store’s board chairperson. Fundraising efforts began in earnest a year later.
Little, a serial entrepreneur and co-founder of the not-for-profit Independent Means, which helps educate girls about finance, became a large part of the brains – and the fundraising brawn – that led to the opening of the Saranac Lake Community Store in November.
One Thing New’s Kimberly Weisul spoke with Melinda Little (pictured below, wearing purple) about share offerings, women’s underwear, and communism.
Why go through
the work of trying to open a community store if you could have bought pretty much anything you wanted at Wal-Mart?
The concern was that a Wal-Mart superstore was not sustainable and would take away from small businesses downtown. After a while Wal-Mart would close and we’d be left with a huge empty building and no downtown retail.
Look at what happened in Watkins Glen [in New York’s Finger Lakes region]. The Wal-Mart there was awful for the downtown retailers, and then it closed. Wal-Mart was promising all kinds of jobs, but none of the employees getenough hours to have health insurance. I got an email recently from someone who wants to invest in our community store because they live in Watkins Glen and saw what happened there.
What led you to think a community store was the answer?
We talked with TJMaxx, but they looked at the demographics and said no way. A number of people had said maybe you should look at getting grants. I was reluctant to go down that path. We needed something self-sustaining. And Powell is a lot like us. They also have about 5,000 year-round residents. They’re a little closer to a big box store, but still more than 20 miles away.
I had gone through private share offerings before, and I knew what was involved. There was one area attorney, Charles Noth, [yes, the brother of actor Chris Noth] who had expertise in this. He took us on as a client to get the prospectus and filings done. He agreed to do it not knowing if he would get paid.
How much did you have to raise
Our threshold for beginning operations was $500,000. We did that finally in March of this year. It took four years. Nobody, going into it, thought it would take that long.
How did you do it?
We did block parties and open houses. A number of investors and supporters had share parties. They would bring together a group of friends, and one of us from the board would be there to pitch the Community Store as an investment. Shares cost $100, and those parties raised from $2,000 to $12,000 each. About 675 people have invested.
What about people who wanted to invest but didn’t have $100? Is $100 a lot in Saranac Lake?
It can be. When we were almost at $500,000 we were going back to existing investors, asking them if they would invest more. We had one couple that decided to forgo a whole month’s social security check and put it into the store. We were so close, and they wanted to be part of putting us over the top and making it a reality.
Was everyone that supportive?
While we were raising money, it did become an issue that some of us are not native to the area. I moved here full-time five years ago. I had been on a board or two, but this was really getting down and doing something meaningful. There are people who are waiting for us to fail still. Who say we’re communists who moved here and are taking over the town.
Do investors expect to get dividends?
Most people don’t want dividends. The reason they’re investing is for the community. Many of the downtown retailers are investors. They understand that the downtown needs to be healthy.
Now that the store is open, what are your best-selling items?
Women’s underwear, socks and thread.
Do you see the Community Store, and the rejection of a superstore, as a rebuttal to traditional capitalism?
The Community Store is capitalism. It’s not going to survive unless it makes money. But I think it’s capitalism with a conscience and a good purpose. It’s social entrepreneurship at its best. —KW
Image courtesy of Melinda Little