Hey there, time traveller!

This article was published 28/6/2017 (1186 days ago), so information in it may no longer be current.

Neechi Commons, the aboriginal-owned-and-operated Main Street retail complex that brought jobs to one of Winnipeg’s most economically disadvantaged neighbourhoods, has fallen behind on its loan payments and faces the threat of its building and land being auctioned off by its main lender.

The lender — Assiniboine Credit Union — provided Neechi a $3-million-plus loan to help get the much heralded co-operative off the ground in 2013, with the federal and provincial governments also chipping in $3.6 million in grants.

An advertisement in a local newspaper Tuesday stated the building and land at 865 Main St. would be auctioned off July 10, and the reserve bid would be $3.8 million.

Neechi Commons spokesman Russ Rothney confirmed the credit union has scheduled the auction, and $3.8 million is a good indication of how much money Neechi owes.

He said the co-operative is now scrambling to come up with a new financial arrangement that will convince the bank not to proceed with the auction. The options being explored include finding someone who is willing to take on the loan, finding a new equity partner, finding someone who is willing to act as a guarantor or finding someone who would buy the building and lease it back to the co-operative.

Rothney said the sale-and-lease-back option would be the best long-term solution "because it would immediately give us a lot more financial flexibility."

While finding someone to take on the loan would buy some more time, "it doesn’t give us the extra financial flexibility that we’re hoping will emerge out of all of this," he said.

Rothney said co-op officials are talking to several parties, including someone who might be interested in the buy-and-lease-back option. He said Manitoba Sen. Murray Sinclair is also working with them to find a solution.

KEN GIGLIOTTI / WINNIPEG FREE PRESS files Russ Rothney, spokesman for Neechi Commons, stocks shelves at Neechi Commons before its grand opening in March, 2013.

If Neechi can’t find a way to stop the auction, Rothney said another option would be to have someone bid for the property on the co-op’s behalf.

Kevin Sitka, president and chief executive officer of Assiniboine Credit Union, said the institution is willing to consider calling off or postponing the auction if Neechi comes up with a solution agreeable to everyone. But he seemed to hint the credit union doesn’t want to continue as its lender.

"We certainly believe in the need for a food store in the North End, just like we believe in providing banking services to the North End," he said. "And we certainly hope they can... continue to (provide that) service in some other way going forward."

He emphasized calling in the loan wasn’t an easy decision. "We’ve certainly done everything possible to avoid this. We have a true appreciation for the social impact that Neechi had, and has, today."

Rothney said Neechi has struggled from the get-go because it cost far more than expected to redevelop the two century-old buildings it now calls home.

The original cost estimate was about $5 million, but a series of unexpected structural problems and construction delays drove that up to $6.8 million. At the completion of the project, the true cost was closer to $8 million, Rothney said, when they factored in the extra carrying costs on the loans and the cost of upgrades to the original building on Dufferin Avenue, where Neechi continued to operate a catering and wholesale-food-services division.

The Neechi Commons complex includes a neighbourhood supermarket featuring traditional aboriginal foods such as bannock, fresh and frozen wild berries, wild rice, locally-grown fruits and vegetables and local fish. It also has a bakery, restaurant, aboriginal arts store, and shops selling aboriginal books, crafts, music and clothing. It also hosts a seasonal farmers’ market.

Rothney said the co-op recorded a 35.5 per cent increase in sales last year, but from the time it opened in early 2013, it has been plagued with too little working capital.

"In the end, we got into a situation where cash so was tight that this spring, we had to run our inventory down so badly and we took a substantial hit on our sales," he said. "So to deal with that we brought in new management leadership and we’ve not restored... our inventory and sales are going back up again."

He said the co-op has also improved its margins. "So we do think that Neechi does have a strong future and that it’s still a value to the community."

murray.mcneill@freepress.mb.ca