Frequently Asked Questions
I need a refresher – what is a cooperative?
A cooperative is an association of people who come together voluntarily to form a jointly owned and democratically controlled business to meet their common social, cultural, and material needs and aspirations.
Cooperatives are not charities – they are capitalized by and create wealth for their members who control the business on a one-member, one-vote basis. Democracy distinguishes cooperatives from investor-owned firms in that the voting rights of members are not determined by the amount of capital they’ve invested.
How do real estate investment cooperatives work?
Real estate investment cooperatives are an innovative business model that creates community benefit while generating modest returns on patient investments made by their owners. They can be formed by just a few community members each contributing a lot of capital, many each contributing a little capital, or anywhere in between.
Successful examples include the Northeast Investment Co-op in Minneapolis and the East Bay Permanent Real Estate Investment Co-op in San Francisco. These co-ops pool capital from a wide and diverse base of member-owners to purchase, manage, and develop both commercial and residential spaces – they create stable access for tenants, incubate new businesses, and give residents the opportunity to exercise voice in the development of their local communities.
We are excited to prove that the model can thrive here in Moscow and to inspire organizing in other communities like ours.
How will the business be structured?
MCIC will be formally structured as a cooperative under Minnesota Statutes Section 308(A). Like all businesses, cooperatives are organized under state-level statutes – and some are more favorable than others. Idaho law only provides a not-for-profit incorporation option for cooperatives that constrains their ability to provide returns on investments made by owners . By organizing under Minnesota’s cooperative statute, MCIC is able to balance profit and purpose while retaining 100% local ownership by Latah County community members.
What is MCIC’s initial area of focus?
Our initial focus is to preserve and invigorate Moscow’s “Heart of the Arts” identity and diverse community of downtown local business owners. This strategy will give the co-op visibility in the most commercially vibrant parts of our town and generate reliable returns to build the co-op’s capital base, finance future purchases, and enable us to pay dividends to member-owners and investors.
Our Board of Directors will revisit this strategy as the co-op grows – all owners will have the opportunity to participate democratically in deciding how to evolve our focus.
What are the requirements to become a member?
Joining MCIC will require completing a membership application and purchasing a $1,000 ownership share, which entitles owners to a vote in the cooperative. Ownership is open to residents of Latah County and is contingent upon approval by the Board of Directors.
During the application process, prospective owners will also be required to sign indicating their commitment to upholding the MCIC Community Agreement, which defines our mission, vision, and values and the code of conduct that all participants of the co-op are expected to follow.