Neighborhood Investments

Local Vermont Restaurants and Markets Follow the CSA Model

Sharon Deitz of the Bees Knees

Written By

Sylvia Fagin

Written on

December 01 , 2008

My family has been here for 50 years. I’ve been in and out of that store all my life. I miss it being the center of the community.”

—Dan Kinoy, Williamsville resident

What’s a community to do when an essential institution goes missing?

The village of Williamsville, northwest of Brattleboro, lost its historic general store two years ago when its owner decided to close its doors. Residents missed the store, and when they convened a meeting to discuss the loss, more than 40 people attended—a big meeting for tiny Williamsville, according to resident Dan Kinoy, who participated.

“People want to have a store because of the convention of getting a newspaper and a cup of coffee, and there needs to be a place for the kids to wait for the school bus in the morning if it’s 20 below,” Kinoy says. “But most importantly, it’s the social hub of the village—where you see neighbors and catch up with people.”

At the gathering, the Rock River Community Store Committee was formed to explore the establishment of a new store, and one of the options it’s been considering is the creation of a “community-supported” store—a business model that’s catching on in Vermont.

Community-supported businesses (CSBs), which in Vermont tend to be markets and restaurants, look to local residents for financial support when they are opening, expanding, or renovating. Typically, the business solicits loans from community members (to be paid back with interest) and/or they sell “shares” that buyers can redeem over time for food or other items sold by the business.

The idea is modeled in part after community-supported agriculture (CSA), in which people pay a lump sum to a farmer at the start of a growing season and receive meat and/or produce throughout the season. Similarly, the CSB model allows businesses to receive a chunk of capital at the beginning of a significant project, when it’s needed most; in return, community members get to invest in their community in tangible ways and to contribute to the success of a local resource they consider valuable.

Every CSB is unique—as shown by the three businesses profiled below—but all of them establish and strengthen local relationships, the very existence of which forms the foundation of true community.

“I grew up in the suburbs. Having a place to gather in a community is a place I never had in my life.”

— Ellen Waldman, Morrisville resident

When Sharon Deitz opened The Bee’s Knees in Morrisville, she envisioned a place that would be like “going to a friend’s house—you never know exactly what’s in the fridge, but you know it will be good.” Five years later, the cozy cafe (there are only seven tables) has become Morrisville’s living room.

But about three years ago, The Bee’s Knees had gotten almost too popular—and crowded. Folks stopping in for a beer after work rubbed elbows with families enjoying a comforting meal and those waiting for the live music to start. The kitchen got crowded, too; due to space limitations, much of the food was cooked upstairs in a tiny kitchen meant for an apartment, then shuttled downstairs to be reheated and served.

Deitz felt the exhaustion of the crowds and the stairs, and put the cafe on the market. But when regular customers heard of her plans to sell, they got worried and decided to help her expand. One by one, people volunteered to paint, lay bricks, lend money … and soon Deitz was researching eateries that had used community-financing models. Adapting the model used by Claire’s restaurant in nearby Hardwick, she began offering shares ranging from $500 to $1,000, and solicited loans of $2,500 to $5,000.

“Community financing wasn’t the only option,” she says, “but emotionally it was about how much work I’d put in and how exhausted I was. Having people say ‘we’re in this with you and we’re risking with you’ changed it for me. When you really feel a part of a community, it gives you more strength.”

Ellen Waldman, who’d moved to Morrisville in part because of the Bee’s Knees, was one of the “community lenders” who came to Deitz’s rescue. Waldman and her husband made a cash loan that will be paid back, with interest, within five years. During those five years, they’ll also receive 10 percent off their food purchases.

“When the opportunity came to invest, my husband and I decided this was just vital,” Waldman explains. “We take risks by putting our money in the bank; this seems like a better bet right now. This is where money should be—local. It’s going to come back in many ways: in relationships, in community.”

“There was a real need for a place like Claire’s. We wanted to be a part of it.

—Kristin Urie, co-owner, Bonnieview Farm, Albany

In 2003, about 50 Hardwick residents met to discuss bringing a new restaurant to their downtown. Three years later, four of those people—Linda Ramsdell, Kristina Michelsen, chef Steven Obranovich, and Michael Bosia—formed two different companies: the Hardwick Restaurant Group, a small group of large-scale investors responsible for securing a location and equipment, and Claire’s, a larger group of people intent on making smaller contributions that would fund the opening inventory and operating capital of the new local-foods eatery.

Community members responded warmly to the opportunity, either by making a $5,000 loan or by purchasing a $1,000 share. The loans were to be repaid in five years, with interest; the shares are redeemed with monthly coupons, usable at the restaurant for five years.

Linda Ramsdell, owner of the Galaxy Bookshop, just down the street from Claire’s, explains that she and her partners borrowed from the model of Robert Fuller, owner of the Bobcat Cafe in Bristol. In 2002, Fuller solicited community loans to support the cafe. The loans have been repaid, and the Bobcat is now a model for community-supported restaurants, as well as a fixture of the community.
Ramsdell acknowledges that $1,000 was a steep commitment for many people in the Hardwick area who wanted to support Claire’s. “Some people wanted a half or quarter share,” she says. “In a way, I wish we had been able to offer that, but at the time, what we were doing was overwhelming and complex enough.”

Claire’s advertises “local ingredients, open to the world,” and to make good on that promise, they exchanged CSR shares for local food from farmers Bruce Kaufman and Judy Jarvis of Riverside Farm in East Hardwick, and Neil and Kristin Urie of Bonnieview Farm in Albany. The farmers paid for their $1,000 share with their own products, rather than cash, and that food, in turn, was served at the restaurant.

“We heard about the shares,” Kristin says, “and we thought about doing it as they were designed, but we weren’t in a position to put up that amount of cash at once. We talked with them about doing it as a product exchange—we wanted to be part of it.”

Claire’s has long since served that first $1,000 worth of lamb and raw sheep’s-milk feta cheese, and continues to buy from the Uries. For the busy farmers, the monthly restaurant coupons are an “extra nudge to go out,” Kristin says. “We feel invested in their success. It’s become our place, too.”

“A neighbor came in and said, “How you are running this store is changing the way people are interacting in this community.”

—David Stenber, board president, Craftsbury General Store

David Stenber bought the Craftsbury General Store in 2003 and ran it as a sole proprietorship for several years. A seasoned business owner, he was aware of a pattern plaguing general stores: “There’s a new owner, the store does well, the owner gets burned out, the store does badly, the store gets sold, repeat.”

The desire to avoid that pattern, the wish to grow, and the need for financial support prompted Stenber to consider a community-supported model. When he presented the idea to the community, there was overwhelming interest, so he decided to reorganize the store as a corporation, selling shares of stock to support the store’s growth.

Like every community-supported endeavor, this one had its own challenges. The new corporation, with its board of directors and bylaws, had to figure out how to let people invest small amounts without exceeding the legal restriction of 50 new investors per year. Many people wanted to invest $100, but with the 50-person limit, those small amounts weren’t guaranteed to raise what was needed to expand the store.

Eventually, with the help of both large and small investors at many levels, the store raised $175,000 toward a $250,000 goal in less than a year. It was enough to turn a back storeroom into a commercial kitchen and deli counter—raising the store’s sales by 20%—but not enough to attract a start-up loan to construct a restaurant upstairs. The fact that the board wasn’t able to meet its goal gave its members pause.

Today, the board is again soliciting input from the community and considering changing the corporate structure so that a larger number of people can participate, or participate differently. “There’s hundreds of people who would love to support the store,” Stenber says. “We need to create opportunities for everyone.”

At a time when so many businesses are owned by decision makers from far away, the direct participation of neighbors in their local businesses is more than just refreshing—it is revitalizing downtowns and communities. Exchanging one’s hard-earned dollars for the chance to co-create a community institution increases the institution’s value in a way that merely buying dinner or a gallon of milk can never match. It gives individuals a chance to prove their commitment to their local economy, and provides the deeper connection to community that many people crave.

Perhaps the eagerness to “co-create” a general store will change the Williamsville community in far-reaching ways. If residents do end up working together to fill the space left by the historic store, they would be writing the next chapter in the story of community-supported business in Vermont.

“No one is an expert on community-supported business,” Craftsbury’s Stenber emphasizes. “We’re figuring it out as we go.”

Photo of Sharon Deitz by Sylvia Fagin

About the Author

Sylvia Fagin

Sylvia Fagin

Sylvia Fagin writes about food and agriculture from her home in Montpelier. To make sure that Vic, Marianne and the Bobs were making wine correctly, she recently took a tour of the Calchaquíes Valley winemaking region of northwestern Argentina. She is happy to report that they are right on track. Contact Sylvia via Twitter: @sylviafagin.

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