The Piazza Plaza
10825 95 Street
The McCauley Development Cooperative (MDC)
The story of how the McCauley neighbourhood and Edmonton Community Development Company were able to raise 1.1 million dollars in six weeks by creating a community co-op to purchase and revitalize a problem strip mall. The community now owns and operates the strip mall through the Community Co-op.
Why this strip mall
The Piazza is located in the heart of the neighbourhood and is situated across the street from the beautiful Giovanni Caboto Park. Historically, the mall has caused the community considerable pain and frustration because of legal gambling and drug trafficking that took place in a couple of establishments. The Edmonton Police Service was often called to this site to address these problems. The owner of the mall did not live in Edmonton.
The community’s vision for the mall is family-friendly, provides opportunities for healthy social engagement, adds value to the local economy, and is no longer a place that causes social malaise.
Community residents asked the Edmonton CDC if we could buy the mall, but we could not make the numbers work on our own. We brought in another developer to see if we could partner, but the proforma didn’t work that way either. But community leaders wouldn’t give up; they were clear with us that they wanted to buy and own the strip mall.
The Edmonton CDC’s mandate is founded on undertaking development and initiatives that communities want. So, we got busy looking for a way to pull this off.
The short story is that the community decided to form an Opportunity Development Co-op, a legal entity that can seek investments, including RSP and TFSA transfers. Here’s what we did:
- The bylaws were drawn up by our consultants in consort with the founding co-op members and the McCauley Development Co-op (MDC) lawyer.
- We hired experts to ensure that the Edmonton CDC and our neighborhood colleagues understood the legal and regulatory requirements of seeking, accepting, and reporting on investments made by residents and stakeholders.
- The CDC joined the Board, and our Director of Neighborhood Development took on the role of Treasurer.
- We teamed up with a realtor to approach the owner; the property at the time was not listed for sale.
- We created proforma scenarios for the Co-op to consider and decide upon.
- We worked with the lender to arrange bridge financing and long-term financing.
- The Co-op board created the marketing collateral with guidance from our consultants, and the Edmonton CDC worked with the Board and consultants to create the offering memorandum.
- We coordinated the offer of purchase and due diligence activities.
- Our Director of Neighbourhood Development was on the team that approached investors; her efforts alone brought in $300,000 in investments.
So what happened
The Edmonton CDC was the backbone
The Piazza Food Hall
Share the risk.
A core group of community leaders put personal cash on the line as well, given that there were due diligence costs of approximately $50,000 that had to be paid.
This was money that would be lost if the deal didn’t go through. In other words, community leaders were so focused on the importance of owning the mall that they were prepared to risk personal capital. The Edmonton CDC shared in that risk, and we also invested approximately $70,000 in cash and staff time to make this work.
Think of the time it took to organize, develop promotional materials for investors, and figure out how to provide the individual attention and transparency each investor would receive! The community members had businesses to run, jobs to go to, families to be with—and still, they made the time to pull this off. That’s a passion for one’s neighbourhood!
The community-led, and the Edmonton CDC supported. Our realtor brokered the deal and nurtured a good relationship with the seller.
The Social Enterprise Fund provided financing and support. It took all four groups to pull this off.
Former Executive Director Mark Holmgren had coffee recently with Miranda Ringma, co-owner of Zocalo and chair of the MDC. They talked about several things, but when they talked about the Piazza, they both got a bit emotional.
From Miranda’s shop, which is across the street from the Piazza, a couple of workers were clearing the mall’s sidewalks of snow—all the way down to the sidewalk! He commented to Miranda, “Wow, that Piazza mall must have a great landlord. Look at how well they’re clearing the snow!”
The smiles on their face were… well, you had to be there — two grown-ups a tad on the teary side still basking in the afterglow of what was accomplished.
Not only did this take great effort, but it also demonstrated the incredible trust the community members have for one another, the strong commitment they share to improve their neighbourhood, and the willingness of people to put up their own money for a shared purpose.
It took what we Community Development nerds called “social capital.” Imagine how much social capital exists in McCauley to be able to raise that much money. That social capital is bigger than the mall purchase; it can only benefit the neighbourhood even more in the future.
The Piazza story is not just a McCauley story; it signals to other neighbourhoods and communities, to community developers, and to political leaders what can be accomplished by citizens determined to do what the community has chosen to do.
A double tip of the hat to the McCauley community.