There’s no grocery store within a two-mile radius of Chad McIntyre’s popular Market restaurant and that, he says, is an opportunity.
McIntyre’s business is part of the growing local food movement in North Carolina. The Market serves whole, all-natural, unprocessed foods from local sources and supports organic and sustainable farming practices. But McIntyre’s restaurant is a stand-alone in Raleigh, a community about two years behind neighboring Chapel Hill and Durham in its development of businesses that focus on local food.
So last summer, McIntyre approached Carol Peppe Hewitt, who leads the North Carolina Slow Money effort, with an idea. Could she help him find funding to expand the Market into a grocery store that offers fresh local produce and foods prepared using those same ingredients? McIntyre was looking for $750,000 to finance the renovation and supply inventory for half a year.
Peppe Hewitt is known in North Carolina communities for facilitating close to $600,000 in some three-dozen Slow Money loans between investors and businesses. Her investor-entrepreneur matchmaking has worked on large deals and small: everything from a $400,000 refinancing of a food coop by 16 investors to a $2,500 loan to a small farmer for winter vegetable storage. Her approach and experience is documented in her upcoming book, Financing Our Foodshed: Growing Local Food With Slow Money, coming out in January 2013.
Increasing the Reach of a Neighborhood Hub
Chad McIntyre started the Market in 2010. It’s a 1,600-square-foot restaurant that seats 63. McIntyre doesn’t have much in the way of reserve funds and has operated in the black since opening, grossing $425,000 in sales the first year, with profits of around 10 percent.
McIntyre’s restaurant doesn’t stop at just providing a dozen or so local jobs, but also supports neighborhood plans for sustainable urban redevelopment, serves as a place for community meetings, and provides mentorship to related businesses such as Slingshot Coffee. Slingshot got its start out of Market’s kitchen and is now carried by Whole Foods. “The restaurant has always been about delivering an ideology, as well as a product,” he says.
The Bones of the Project
The plan, says McIntyre, is to move his restaurant three blocks down the street to a spacious 5,500 square foot location that overlooks the Raleigh City Farmers’ Market and sits next to William Peace University and Yellow Dog bakery. The restaurant will occupy 1,500 square feet, with the remaining 4,000 sq. ft. for the grocery. McIntyre plans on an open-space concept with modern garage doors. He’ll focus on local and fresh, supplying some product staples, but mostly items geared toward high-quality ingredients and prepared foods that a busy parent could quickly drop in and purchase before dinner.
The Bones of the Loans
Of the $750,000 he seeks—$500,000 to fund the renovation and $250,000 to fund the first half-year of inventory—McIntyre has raised $100,000 from investors he had previously known and $165,000 from his landlord. Close to $150,000 in verbal commitments have been made by Slow Money investors. “I was completely amazed at the response from people wanting to be involved with funding through slow money,” says McIntyre. While the terms of the deal have not been solidified, he and Peppe Hewitt are meeting with potential lenders about affordable interest rate loans with repayment deferred for the first year or so. A few investors may come in as equity partners. There’s also a micro-financing loan option in the works; investors who lend $500 would get a $550 gift card to be redeemed once the restaurant and grocery is open.
“This is a big project and Slow Money will not be Chad’s only source of capital,” says Peppe Hewitt. “But it’s exactly what we want to do—help increase the amount and availability of local and sustainable foods in our communities. It’s relationship based. Neighbors helping neighbors, for the benefit of all.”