Our current location at 823 Washington Avenue has served us very well, but this expansion is necessary for our long-term success: 

1. More space. Our current location is 1,700 square feet and we have simply outgrown it. The new space is 6,000 square feet on the main level which will provide more than 3,500 square feet for the store and ample space for the shared commercial kitchen, storage, and receiving. 
2. A long-term location of our own. We started operations in 2017 renting 105 Barbara Avenue on the northside of Detroit Lakes and moved to 823 Washington Avenue in 2021. By no means do we intend to keep moving every four years, which takes both effort and money, but, as a new business, we need to expand.
3. Opportunity is now. Our 5-year lease at 823 Washington Avenue is ending at the end of 2025. We expected our rent and maintenance costs to increase in our lease renewal and a purchase of 801 Washington with payments starting at the end of 2025 allows us time for construction between now and our move. When the property at 801 Washington Avenue came on the market, we took the once-in-a generation opportunity to expand into one of the only downtown Detroit Lakes properties that would work for an expansion of our store. 

The co-op board, staff, and members view this relocation and the associated store improvements as not only an exciting expansion of a store, but also an opportunity to better fulfill our mission.

Simply put, we need to make investments in equipment and improvements to transform a 100-year-old building into a grocery store and build out a shared commercial kitchen to support our local farmers, suppliers, and local food entrepreneurs. Based on estimates from contractors, these improvements will cost between $600,000 and $650,000. Since selected to receive a USDA grant for the shared commercial kitchen portion of the project, that leaves $300,000 to $350,000 to cover estimated costs. 

Financing all the costs of the expansion would more than double the co-op’s current debt and add a significant monthly cost and strain daily operations. Not unlike all cooperatives that have undertaken significant expansions, we look to our member-owners for support at this time. All businesses need additional investments and this is our time to support our cooperative.

The capital campaign funds will cover the direct costs of fitting up the new retail space. After receiving estimates from contractors, we estimate that our expansion will cost between $600,000 and $650,000. We have been awarded a $304,000 USDA grant for the commercial kitchen portion of the project, so this leaves approximately $300,000 to $350,000 necessary to cover our total project. 

Costs fall into three main categories:

1. 1. Equipment: The lion’s share of equipment expenses will be installing much larger walk-in coolers and freezers to NSF-certified kitchen and processing equipment for the shared commercial kitchen. But we’ll also have we’ll be adding some grocery equipment like freezer space. Price tag: $280,000. 
   2. Construction: To turn a former hardware store into a licensed food-grade kitchen and grocery, we will need new floors, new lights, and food-grade wall coverings. We’ll also install a new glass storefront along Washington and Front St together with new signage. Price tag: $250,000.
   3. Utility upgrades: The main electrical line coming into the store needs an upgrade to 400 amps to power our equipment plus an entirely new HVAC system. Price tag: $80,000. 

This funding will give us the flexibility to grow into our new downtown location and continue to serve our community effectively.

Please contact Ryan Pesch, capital campaign co-chair and board treasurer of Manna Food Co-op, with any technical or financial questions you may have at 218-770-4398 or lidafarmer@gmail.com

Certainly feel free to reach out to any capital campaign committee member you may know personally: Ruth Solie, co-chair; Katerina Renner, Mindi Jensen, Bonnie Juma, Dawn Finn, Casey Brodsho, or Lori Botzet.

Yes, in time, Manna Food Co-op will own the building. 

Currently, Ryan and Maree Pesch, our treasurer and general manager respectively, are the owners of the building. Their passion for the co-op and its success inspired them to take the risk of purchasing the property under a contract for deed to make this expansion possible. The contract is with the Beug family who have operated Ace Hardware at 801 Washington since the 1980s. 

Manna Food Co-op was not in a position to acquire the building in the short period of time it was on the market. Instead of allowing the opportunity to pass, the Pesch’s stepped up to buy the building with the intention to transfer the property to the co-op when the time was right. When the co-op is in a financial position to acquire a mortgage, the co-op can buy out both the Pesch’s and the Beug parties and own the building outright. In the meantime, the Pesch’s as landlords will provide a rent-to-own lease also known as a lease-option agreement. Basically, a portion of each month’s rent will go towards principal payments.

In short, the board of directors.

Board members first toured the property in October, 2023 when 801 Washington Avenue came on the market. Knowing that our current lease was ending in 2025, this opportunity seemed worth investigating. After an initial look, we solicited estimates from contractors to price out the cost of improvements. Our treasurer, Ryan Pesch, negotiated with the Beug family who owned the building on terms of any possible lease or purchase over the ensuring 7 months, keeping the board of directors informed of developments at our monthly board meetings.

At its March meeting, the board of directors unanimously approved of the idea moving forward with the expansion should the building be acquired. Due to need to move quickly in negotiations and due to their ability to garner funds for a down payment, Ryan and Maree Pesch closed on a contract for deed with the Beug family at the end of June. Any lease contract between the Pesch family and Manna Food Co-op will be executed in 2025.

Built in 1920, 801 Washington was originally a JC Penney. Mid-century the building transitioned to a hardware store and was acquired by the Beug family in 1986. The Beugs were operating a hardware business at the time in the Glicks building  and simply moved across the street. 

Upstairs are 8 apartments that were last rented out in the early 1980s. In a fairly dilapidated state, the space is very interesting and historic with original woodwork throughout, two skylights, and a lot of charm. The upstairs remains an opportunity for partners to bring these apartments back to life or convert to another use. Give Ryan a call if you want to explore ideas at 218-770-4398.