Neechi Commons in dire straits

Hey there, time traveller!
This article was published 03/07/2017 (3133 days ago), so information in it may no longer be current.

When Neechi Commons opened in March 2013, it brought with it a lot of hope and served as an economic anchor for the North End.

But what few people saw was that Neechi Commons was struggling to pay off more than $3 million in debt to its primary lender, Assiniboine Credit Union.

The 50,000-square-foot property will be auctioned off on July 12. The initial bid is set at $3.8 million which, according to a spokesperson for Neechi Commons, Russ Rothney, is an indication of how big their debt is. He emphasized the only thing going on sale is the property and that they are finding solutions to keep the business up and running. 

“It’s a very large loan. That’s the main problem,” he said, adding it was a series of events that caused Neechi Commons to struggle to pay off the debt.

“For four years, we struggled with cash shortage on the operating front. It’s difficult for us to make an interest payment on the loan.”

The total cost of construction was $6.8 million. The federal and provincial governments each committed to a $1.3 million funding under the Infrastructure Stimulus Fund. The provincial provided an additional $1 million.

During these four years, Neechi Commons didn’t have any other investors, and once they found themselves into a blind alley, they started reaching out to other organizations and potential supporters. Rothney said they’d received some interest, but nothing has been confirmed yet.

“We’ve been working on this for months. It’s nothing new to us. We are working hard to find solutions to retire that loan with the credit union and gaining more flexibility in terms of our financial needs, which include capital upgrades and inventory expansion,” he added.

Rothney explained options include the possibility of a sale-and-lease-back, which consists in forming a partnership with a supportive landlord. Neechi Commons would no longer be the owner of the property but would have the cash to pay off the debt, he explained.

“If we form a partnership with a supportive landlord, Neechi would become the managing landlord. The basic model would be that Neechi would continue to operate the business and the services we’ve been providing all along.”

Rothney said they are keeping a positive outlook on the situation and that closing down Neechi Commons is not an option for them. 

“We think there’s a lot of groups and individuals out there who would really step forward to help preserve the very strategic community asset that Neechi Commons is. We are hoping that, although we are in a tough situation right now, that it will turn out for the better for us.”

Rothney added he hopes the attention drawn in to the co-operative brings potential investors.