Struggling West Des Moines Grocery Says It’ll Shutter Without $150,000

The struggling in is seeking $150,000 in member loans to keep the store open, according to an email sent this morning to members and supporters of the startup market that sells locally produced foods and products.

Linda Gobberdiel, one of the founding members of the cooperative and a member of its board of directors, wrote in the email that the store opened to an enthusiastic audience in September and membership grew beyond founders’ expectations.

The email seeks loans in a minimum amount of $1,000.

“Today, Tallgrass truly needs help from each of you as owners of this business,” Gobberdiel wrote. “We need capital in the form of member loans or gifts in order to keep the store open. Many co-ops ask their members for loans and we are no exception.”

Loan terms of five to 10 years with a variable interest rate of 0 to 4.5 percent are possible. Loans will only be made to residents to Iowa due to state and federal regulations governing the cooperative, the email said.

Lynn Heuss, president of the Tallgrass board of directors, said it’s “critical we get an immediate influx of cash now or look at other alternatives.”

“It’s serious,” she said.

In March, the co-op, which opened in September with 700 members, issued an emergency that boosted membership to more than 900. At the time, directors said that if each member committed to spending at least $40 of their weekly grocery budget at the store, it could thrive.

That hasn’t happened, according to Gobberdiel’s email.

“Over the past six months, membership sales have slowed and routine shopping at Tallgrass has not been at a level that is needed to sustain our co-op business,” she wrote.

Heuss said lessons have been learned during the co-op’s first 10 months of operation.

“It’s difficult to know how much capital is needed with any new venture,” she said. “Did we undercapitalize? I don’t know. Some of the founders hoped to have 200 members, and we opened with more than 600. When the originators looked at the numbers and extrapolated that out, you would think, ‘wow, 600 to 700 members, that’s sustainable.’

“I think people did the best they could with the information they had to make the wisest decision,” she said. “We’re Iowans, and we tend to be conservative. They made the best decision with the information they had.”

Heuss said that if residents are committed to keeping a grocery cooperative in the Des Moines metro area, “we need to get people to step up, go to the store, and take out short-term modest loans.”