Exactly when does a food co-op become a scam?

It’s morally wrong to allow a sucker to keep his money. – W. C. Fields

One of the few perks of the opinion column writing dynamic is columns tend to beget other columns. It almost sounds biblical, doesn’t it? In this case, the First Ward piece on the Elgin Arabica Café debacle provoked a reader into asking me if I’d investigated “an even bigger Carol Rauschenberg boondoggle.”

For those of you who don’t already know, Ms. Rauchenberger currently serves on the Elgin City Council.

But when this source told me the scheme involved the Shared Harvest Food Co-op, I didn’t believe them. I further explained we had a co-op principal on the Ward & Jones radio show back in 2017 when they were about to open in the old Ziegler Ace building on Spring Street in downtown Elgin. And I was convinced that’s exactly what happened.

But after my friend insisted on their “it never opened” theory, I turned to the Net and phoned a couple of Elgin friends who confirmed the bizarre truth that the co-op is no closer to opening today than when they started selling “shares” over ten years ago.

This, of course, begs two questions. The first is, “Where the hell have I been?” And the second amounts to, “When does a proposed food co-op cross the threshold of becoming a scam?

I’m sure Shared Harvest started the planning process with the best of intentions, but reality has a funny way of unravelling the best laid plans of rodents and Homo Sapiens, and the co-op’s plans weren’t nearly the best laid.

In the beginning the co-op said they’d open when they’d secured the requisite financing and recruited 800 shareholders at $100 a share, but they met those benchmarks in 2016. Then they told Mayor David Kaptain they needed 1,000 shareholders, a number they surpassed in 2017. Then they wanted a $250,000 to $500,000 grant from the City, and the Mayor told them if they fixed up the former Ace or some other building, the City would come through with some TIF money.

And the City has heard nothing from them since.

So, contrary to my steadfast belief, they never did open in the Ace building, despite the Ziegler family offering a sweetheart deal in which the co-op to would only pay for utilities and maintenance. But they were convinced the cost to repair cracks in the concrete slab floor would’ve been prohibitive, so that deal fell apart in October of 2017.

Then sources told me Shared Harvest was going to open on the first floor of a building across the street from the Post Office owned by Judson University. Rauschenberger was supposedly “brokering” that deal, but it fell through, too. There have been a number of other downtown possibilities since then, but they’ve all fallen short, too, which brings to mind that dire caution about “letting the perfect become the enemy of the good.”

But the biggest irony is Shared Harvest’s own website “News Stories” page paints a bleak picture for the prospects of any northern Illinois food co-op. According to a cited Daily Herald article, unless you count Woodstock as a suburb, just one suburban (Lombard) food co-op has actually opened and they’re overly reliant on grants to survive. Another WBEZ article described the difficulties in opening Chicago co-ops which have an exponentially larger customer base than any Elgin concern would have. So, just two have opened in the Second City.

Every Elgin source I spoke with said the same thing, Shared Harvest will never open.

Their first and foremost problem is that typical progressive mindset that dictates they shouldn’t have to pay rent, or even utilities, because they’re God’s chosen social justice warriors and their mere presence in a building should be reward enough. But no landlord can pay their mortgage with good intentions.

Thus, no reasonable lease agreement will ever be good enough for Shared Harvest as evidenced by the plethora of potential locations that already have fallen through.

The next and even more difficult issue is, they’ve taken so long to take flight that the co-op’s mantra of selling “affordable, healthy, and locally grown food” has been co-opted by the current crop of Elgin’s downtown-ish grocery chain stores. Given their vast market weight, they can sell locally grown produce far more inexpensively than any food co-op could ever dream of.

Then, if you consider the downtown resident economic demographic, as the Mayor and not-quite-yet councilman Rauschenberger discussed, would those folks be willing to cough up $3.00 a pound for organic co-op broccoli when they could get the regular stuff for 80 cents a pound at Aldi. Rauschenberger’s response was, “They’ll use food stamps.”

I don’t even know where to begin with that one.

The mentality means, unless there’s a consistent influx of city cash and grant money, Shared Harvest can’t possibly compete.

But even if they could compete, I spoke with a former produce consultant who described the process of effectively ordering produce and meat as a “dark art.” You have to order just the right amount and then those orders have to be timed perfectly or your “profits” go directly into the dumpster.

We’re all well aware that supply chain issues that plague the post-COVID era and I don’t think Shared Harvest can count that kind of unique expertise among their governing board. They could hire someone, but that’s an expensive proposition, too.

Meanwhile, an attorney friend said that, between Shared Harvest events, consultants, and their eternal location search, the co-op is racking up all kinds of expenses that will make it difficult to call t off and return whatever money remains to their beleaguered shareholders. And speaking of shareholders, anytime one of them asks about Shared Harvest’s financials or getting their money back, they get stonewalled. I’m sure the co-op is counting on the reality that $100 shares won’t make a worthwhile lawsuit.

Considering the totality of the evidence presented here, the only possible conclusion is that Shared Harvest will never open. And that makes their ongoing shareholder solicitations that much more disingenuous. I’ll ask the question again, when does a food co-op become a scam?
Unless Shared Harvest finally comes to their senses and returns whatever money they can, I think it’s time for the State’s Attorney to answer that question.

Author’s note:

I reached out to Shared Harvest twice by email for documentation purposes, but no response was forthcoming.