Revisiting the Riverwest Public House
April 2, 2012 § 1 Comment
Last year, we introduced you to the Riverwest Public House Cooperative, the nation’s second-ever cooperative bar (the first is a brewpub called Black Star in Austin, TX). The Public House is a little bar with a big idea: to use the excess revenue (read: profit) from the bar as an economic engine to start more co-ops in the Riverwest neighborhood.
On St. Patrick’s Day, the Public House turned 1 year old. At the commencement of an enormous party to celebrate, founder Gibson Caldwell announced that a group comprised of Public House founders and other cooperators in the neighborhood (Riverwest Investment Co-op, Riverwest Co-op & Cafe) had recently sent in their articles of incorporation for the Riverwest Cooperative Alliance (RCA). This, he said, was a huge step forward and after only a year in business as the Public House, the initial idea was picking up steam.
A perennial problem cooperatives have to overcome is how to raise starting capital for their venture. Unlike the standard single-owner business model, cooperatives have a hard time getting loans from banks for a number of reasons, but mainly because with a co-op there is, by definition, no single person to guarantee the loan with collateral. Generally speaking, banks read this as a risky situation. The Riverwest Cooperative Alliance is these folks’ effort to create a model for cooperative development that can be as autonomous as possible. It doesn’t rely on individual loans or donations, nor does it does it depend on big banks for loans. Instead, they’ve begun a lucrative business with the Public House, and the excess revenue will be used for the starting capital of new businesses.
The Public House has evolved tremendously over the past 12 months. It began with a limited selection of alcohol, but now features one of the best selections of local beverages and hand-made ingredients in town. It took months to get a sign on the building and a whole year to deliver the coveted member mugs pictured above. As a venue, it began as little more than a step up from a DIY basement stage, (which was never a problem–DIY or DIE!), but now hosts national acts. It boasts comparisons with some of Milwaukee’s most cherished, long-established venues like Cactus Club. Even the bartenders, many of whom wanted to start “a new co-op” rather than “a new bar,” have become skilled mixologists where complete barkeep-naïveté prevailed only a year ago. They’ve hosted a handful of campaign stops for politicians including Tammy Baldwin, Rob Zerban, Tom Barrett, and Sandy Pasch. And they’ve staged benefit events for all kinds of causes from a youth center to a neighbor’s healthcare bills. All this is to say that as far as models go, it’s interesting to consider that a dozen people with a vision for their neighborhood have put together a member-owned bar from scratch and have made it a successful and important neighborhood institution.
When the Public House founders were initially talking about starting a co-op from which more co-ops could spawn, one idea was a bakery. They ultimately nixed the idea because a bar seemed more profitable in Milwaukee. However, with the success of the Public House, and the RCA finally getting off the ground as a legitimate organization, the Bakery idea has been revived by a separate group of people from the original Public House founders. And this is great news.
Even though the Public House founders (people like Gibson Caldwell, who spoke at our inaugural symposium) wanted to set up co-ops and let them prosper on their own, the Public House has shown that these projects take a very long time to establish and settle in terms of daily operations, as well as personnel policies. The RCA, which so far is comprised of folks who already have their hands tied with the maintenance of one or two cooperatives, predicates the success of the model on the existence of a new group of people willing to step up and put in the effort to start a new co-op. So far, the new bakery group has shown promise in this regard.
The bakery group started when a couple people put up some posters around the neighborhood that said something to the effect of “Hey, let’s start a cooperative bakery! First meeting is at the Public House on this date and time.” The first meeting boasted about 30 people and was full of energy and excitement. As will happen with these projects, the group slowly shrank down to a manageable size, and subcommittees formed to explore cooperative structures, projected costs, fundraising possibilities, and product development. The last meeting had about 7 people and all were actively contributing to a productive conversation. After deciding to become a hybrid worker/member cooperative, they’re currently working on a business plan and their articles of incorporation.
Pending all sorts of variables that are still up in the air, if everything goes according to plan the bakery will likely be the first cooperative to receive starting capital from the RCA. When that happens, there will be many celebratory blog posts here and elsewhere, and probably some good old cooperative toasts at the Public House. But already the RCA has been assisting the Bakery as much as they can. The real services the RCA has to offer are in the realm of professional consultations: basically, the nuts and bolts of starting a co-op with only a few posters around the neighborhood explaining intentions. The next steps for the RCA aside from drawing up bylaws are to create physical documents that describe meeting agendas, timelines, realistic goals, as well as trainings in collective management, co-op structure considerations, fundraising strategies, accounting practices, sample business plans, articles of incorporation, bylaws and much more.
The other main objective of the RCA for the immediate future is to conduct an exhaustive neighborhood survey to outline the best and most desirable leads for new cooperative businesses. Why not a co-op daycare center? Pharmacy? Clinic? Butcher? Resale Shop? Something else? They won’t know what to put their energy into without knowing where the community stands on these ideas. And as new groups get inspired by the success of the Public House and (hopefully) the Bakery, perhaps more and more people will contribute to this new and experimental model in Riverwest, building co-ops from the ground up–together.
Peter Murphy, co-founder