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A new business model for Richmond

on October 13, 2010

Richmond may have an industrial past, but listening to both business leaders and residents talk on Tuesday night, its future may lie in worker cooperatives.

Community leaders and residents gathered at the Richmond Public Library for a lively discussion of how Richmond could revitalize its economy by duplicating a model of the internationally known Mondragón cooperative in Spain. Mayor Gayle McLaughlin and Community Advocate Marilyn Langlois travelled to the Basque region of Spain recently for a seminar hosted by the California non-profit Praxis Peace Institute, to learn how to bring the co-op model to Richmond.

“This is like some kind of fantasy,” said David Strain who has an idea for a bicycle cooperative. “But it’s true, they’re [Mondragón] really doing it.”

The Mondragón Cooperative Corporation is not the small hippie group many think of when they hear the word, ‘co-op.’ Mondragón started with one small co-op in 1956 and has since grown to employ more than 85,000 people worldwide in 256 companies, of which 120 are autonomous cooperatives. It is the seventh wealthiest business in Spain bringing in more than 18 billion Euros in 2009.

The foundation of the Mondragón Cooperative model rests in the fact that each person working for the cooperative has an equal vote in the way the business is run. One small business owner in Richmond, voiced concern about the loss of authority when a business moves toward a cooperative.

Neil Helfman (center) would like to see a revolving fund set up to help start cooperative businesses. "Nothing succeeds like success," he said.

Attorney Neil Helfman, who specializes in cooperative business law, agreed that not all businesses would benefit from a cooperative model. The best kind of businesses for a successful co-op, he said, do not require large capital investments and function around many people combining their efforts for a community gain based on their own intellectual property. A business interested in purchasing real estate, for one, would not.

Langlois and McLaughlin also brought home lessons from the Mondragón model adopted in Cleveland, Ohio. Since a co-op relies on local talent and resources and returns profits to its workers, money stays within the community, theoretically providing more jobs to the city in need.

Doors opened at the Evergreen Cooperative’s first business—a green laundry facility—in June of 2009. The business is owned entirely by its 50 employees. In order to make the business sustainable from the start, Evergreen connected with anchor institutions like local hospitals and universities to provide their ongoing needs- starting with laundry.

Key to the success of the Mondragón model is that workers are trained, and they are rewarded equitably based on their work. The model does allow more highly educated workers to earn a better wage, but maintains that no worker should make more than six or seven times the lowest paid worker. Profits return to the cooperative for retirement, self-insurance, and improvements.

David Strain (left) shows Neil Helman (right) his prototype for a hybrid cargo bicycle made using non-toxic and easy to find materials. He hopes to put the protoype into production with a cooperative.

Discussing whether a cooperative model would work in Richmond, participants mentioned existing co-ops like REI and Atchison Village, and ideas for new ones.

Resident Miguel Espino want to start greenhouse co-ops that would use vacant spaces and skilled, though currently unemployed, laborers to build local agriculture.

Brian Drayton and David Strain intend to create a bicycle cooperative to teach unemployed workers to build and repair bicycles. There currently are no bicycle repair shops within Richmond city limits.

The Arizmendi Association of Cooperatives modeled itself after the Mondragón Cooperative Corporation. The name Arizmendi comes from José Maria Arizmendiarrieta, the founder of Mondragón. The association is made up of seven member businesses including six bakeries (the Arizmendi Bakeries and The Cheese Board Cooperative) and the support cooperative.

In the open forum, Terry Baird of Arizmendi Bakery, said he is personally interested in Richmond but doesn’t see Arizmendi expanding to the city. One of the missing pieces necessary for a successful cooperative, he said, is that the business should own the property it occupies. In this way, when an impoverished economic locale improves and property values rise, the cooperative’s financial gain returns to itself instead of providing income for the landlord.

“We have to figure out where we crisscross and put out a net—a blanket that wraps around a lot of social issues,” said resident Brian Drayton.

Drayton immediately raised his hand to comment. He said what Richmond needs is an organic café—like Arizmendi Bakery—and/or a bike shop near the Amtrak. That way when people go to and from Amtrak they stay in Richmond.

“It’s clear to me it’s a food desert,” said Drayton. “If it takes owning a piece of property to change that, I’ll do what I can to help.”

A few attendees threw around ideas on ways to get property available to cooperative businesses. One resident suggested offering tax deductions for the donation of property otherwise not in use.

In order to maintain an open dialogue after the presentation concluded, Drayton volunteered to create an internet forum for any interested people.

After the first meeting came to a close, several attendees said they were disappointed there wasn’t a plan of action established; they wanted to start creating a cooperative.

“It’s got to lead to something tangible,” said Helfman. “I’d like to start developing practical policies.”

A second presentation will be held on Thursday, October 14, 1:00-3:00 pm in the Multi-Use Room of the Civic Center.

|Want to learn more?|Link to document |Signed letter of intent and endorsement

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