Here are answers to some of the most commonly asked questions.
We are currently studying Cooperative business models and bylaws and are thinking that TEY will be a 308B cooperative with two member classes. Essentially one member class will be comprised of residents who will control day to day operations and make decisions on how TEY operates and functions and the second member class will be made up of investors who hope encourage cooperative affordable development and earn a return on their investment. This investor class of members will also have a percentage of the seats on the board and will have more voice in regards to financial decisions of the cooperative. A proposed / example set of bylaws will be available by the fall of 2017.
That's a good question. We're still working out the exact details but here is how we think it will work based on talking with local banks and credit unions. The co-op will receive one single loan for 60% - 70% of the entire development. The difference will be made up of down payments from residents between 10% - 20% and coop investors members hoping to earn an annual dividend (around 7.5%) on their investment. The proceeds of that loan, down payments, and investments would used to develop The East Yard. Finding the right banking partner is still being worked on and more updates will be coming.
Each person who contacts The East Yard through the web form or attends and information session and signs in or completes a survey will be added to the interest list. We have created a numbering system to track the order of inquiries received (sales priority will be given to those earliest on the list and those involved from the start).
There will be two interior design options to choose from. One will be "classic" and one will be "modern". Upon completion co-op members will be able to make modifications to personalize their units. Interior renderings and design selection recommendations will be available in September 2017. Co-op members will have an opportunity to give feedback to TEY's interior designer prior to construction beginning. Please note the interiors will not be custom with every nook and cranny utilized like you may have seen on HGTV.
We are hoping to open the first phase with 18 tiny homes in the spring of 2018. Given our current time line for testing, possible remediation, development and building of tiny homes, Spring of 2019 is most likely.
Here is the most likely scenario for timeline:
Spring 2017 - Completed
- Completed Phase 2 testing / investigate remediation grants.
- Launch marketing / get press / build interest
- Apply for vacation of city streets and alleys.
- Begin community outreach
- Investigate solar panels, shared cars, and other co-op systems.
Summer 2017 – Completed
- Apply for remediation grants (MPCA, DEED) through STP.
- Acquire rights to historic home at 656 Bush. Have verbal commitment but not an unlimited timeline.
Summer 2017 – Not-Completed
- Build partnership with land trust and or non-profit that assists with down payment.
- Finalize site design, land development plan and design of tiny homes
- Start co-op. develop bylaws. form board and committees.
- Meet with zoning and do preliminary review of site plan.
- Finalize bank financing partner and determine level of equity needed. Continue outreach to Western Bank, National Coop Bank, Self Help Credit Union.
- Raise $1M - $1.5M in equity or debt through MNVest Portal. MNvesTiny.com.
- Choose legal team to prepare for SCORE fund raise. Allows for outstate investors and raising up to $5M.
Winter 2017 / 2018
- Complete Co-op Disclosure Statement.
- Apply for rezoning of land. Obtain variances from planning commission at the same time.
- Complete RFP for 1) Site Work and Utilities, 2) Landscaping, 3) Community Centers, 4) Tiny Home Builds.
- Remediate pollution if grants are received.
- Reach co-op presales of all homes.
- Reach investment goal. Raise $1M in debt or equity for co-op.
- Move historic house / Community Center
- Develop land / install plumbing / install utilities
- Build tiny homes and remodel historic community center.
- Finalize parking and grounds.
- Open The East Yard Cooperative Tiny Home Village!
Cooperative Ownership Principles
The cooperative model is an innovative vehicle for ownership with many advantages over traditional models. A cooperative operates democratically on a one-member, one-vote basis, so that all members have equal voting power. Because a cooperative is a for-profit business, it can provide members with a modest return on their investment. A cooperative also typically focuses on multiple bottom lines, including improving a community’s social and economic capital. This means giving residents a way to work together to intentionally make a great place to live.
The residents of a housing co-op are members of the co-op corporation which owns the whole property. The co-op provides a unit to a member household. A household can consist of one or more adults with, or without children. Members do not own their own units, but purchase a share of the whole, which allows them access to specific resources.
Yes. Because the Cooperative receives a loan for the entire project your financing for your tiny home / share is through the cooperative. The co-op model is an innovative vehicle for home ownership and community investment. A cooperative operates democratically on a one-member, one-vote basis. A cooperative also typically focuses on multiple bottom lines, including improving a community’s social and economic capital. There is usually no minimum or maximum income level.
All members have an equal say in how major decisions are made – “one member, one vote.” Members come together at meetings to elect a Board of Directors, to approve the annual budget and approve by-laws. Each director is a member and lives in the co-op. Other members work on committees or they perform various tasks to help with the work involved in running the co-op. A co-op may also employ staff in the co-op’s office who looks after the day-to-day business of the co-op.
The key difference between co-ops and other kinds of non-profit housing, is that co-op members are actively involved in running their housing community. Each co-op member must volunteer time to serve on the Board or on a committee, or volunteer for some other co-op task. Members do not need special skills to get involved. They learn from one another and in training sessions designed for co-op members. Members get to know each other through working together in the co-op. This involvement creates a sense of community and a safe place for children and adults.
Anyone can apply to live in a housing co-op. People of all backgrounds and cultures – young and old, married or single, with or without children – live in co-ops. Co-ops are also home to people with disabilities and special needs. There is usually no minimum or maximum income level. Co-ops select their own members from those applicants who will be willing to share the responsibility of running the co-op once they become members. The desire to live in a diverse community is important.
Examples of Student Coop Housing:
Riverton - http://www.riverton.org/
U of M Student Co-op - http://www.studentscoop.org/
U of M Grad Student - http://cscc.umn.edu/
U of M St. Paul Campus - https://www.umnctc.org/
Article on Twin Cities Market and Co-ops:
Community Association Fee – It is assumed that there would be a monthly fee that will cover things like: maintenance and upkeep of the grounds, use of the community center and laundry facility, use of guest bedrooms on a first come first serve basis, and use of the party room for events. This fee will not cover the costs of full time staffing of the community center. It is assumed the residents will cooperatively staff the community center. Here is an example organizational budget that shows costs and what might be included. Please note these numbers are complete guesses and will be locked down in the coming year.