Financial Summary

Previous Fundraise Summary

Security Type Common equity
Investor Eligibility All Investors
Minimum Investment $10,000
Voting Rights Yes
Dividend Varies
Details on terms

All investors must join as an owner of the Cooperative.  The Investment Certificates provide owner-investors with an opportunity to earn an equity-like dividend return, beginning after Year 3, which will be disbursed annually from there forward until the the investor withdraws and is repaid their original investment amount. The rate of return issued to each investor will be dependent on whether they select the regular return rate or our social impact return option. The regular rate will be 7% annually on the amount invested, while the social impact rate will be 1.5% annually, with an additional 5.5% being directed by the cooperative board to areas of social impact in the community and the building. The investor will annually have the option to choose to withdraw their capital after Year 6, contingent upon the Cooperative obtaining replacement capital.  In addition to the Cooperative returning the investor's capital, if the investor holds their investment for more than 10 years, regular return investors will receive an additional 20% bonus when their capital is returned, and social impact investors will receive a 10% bonus. Investors will also receive perks as outlined below. Details are available in the document attached.

Investment Perks

Expired 06/01/2019 | $100,000.00
$100,000+ Investment

(1) Annual coworking membership at Commonplace (about $1,500 value), (2) Six month Table Lifestyle membership with massage, personal health, movement, and nutrition options, (3) Four tickets to six shows OR use of event space for one day, (4) Free Iron Fish barn rental for private party (Sat excluded, must be used by 2020, guest responsible for planning/food/bev costs), (5) Higher Grounds consultation on a personalized home brewing system and $200 Coffee Bar credit, (6) Large plaque/brick with your name in the building, and (7) One week per year in the Commongrounds Coop suite overlooking the Boardman River.

Expired 06/01/2019 | $50,000.00
$50,000+ Investment

All $10,000+ perks AND (1) Annual coworking membership at Commonplace (about $1,500 value), (2) Three month Table Lifestyle membership with massage, personal health, movement, and nutrition options, (3) Two tickets to six shows, (4) Two nights per year in Commongrounds Coop suite overlooking Boardman River, (5) Free use of gallery event space/guided tour for private party at Iron Fish Distillery (must use by 2020), (6) Private Higher Grounds coffee cupping and tour for six people, and (7) large plaque/brick with your name in the building.

Expired 06/01/2019 | $500.00
$500+ Investment Level

(1) Exclusive building tours before grand opening, (2) Free admission to grand opening party, (3) Free admission to annual investors party (like a flock star), (4) Swag, (5) Discounted food/drink and free admission to events on community investor days (2x per year), (6) Like something a little more 'concrete'? How about your name in our recognition/gratitude wall!

Expired 04/16/2019 | $10,000.00
$10,000+ Investment Level

All $2,000+ perks AND (1) free Commongrounds Coop membership (about $100 value), (2) One free Table Movement Studio class per month, (3) Two tickets to two shows (and early access to choose tickets), (4) Six months Higher Grounds coffee subscription, and (5) Ten hours of meeting time per year in Commonplace.

Expired 04/16/2019 | $2,000.00
$2000+ Investment Level

All $500+ perks AND (1) daily beverage discounts including $1 Higher Grounds coffee Daily Brew, (2) 10% off first Iron Fish cocktail, (3) One free Commonplace coworking pass every month, (4) Three free Table Movement Studio classes per year, (5) One ticket to a show (and early access to select!) and (6) Like something a bit more 'concrete'? How about your name on our recognition/gratitude wall!

Expired 03/08/2019 | $2,000.00
Hurry! These rewards expire Mar 8!

Limited (awesome) BONUS rewards for investors who commit to invest by the end of the day on 3/8! No need to attend the Flock Party event to receive the rewards if you have already invested. Each investor can choose ONE bonus reward from the list and first to invest gets first pick (quantities of each reward are limited). Rewards include ten-class packages at Table Movement Studio, reserved underground bike parking spot at Commongrounds, use of private event space at Iron Fish Distillery or the new event space in Commongrounds, one year subscription of Higher Grounds coffee, and much more! You can read more detail on the bonus rewards on our website.

Financials

Funding Plans & History

Pitch Deck

Pitch Deck

Q&A

Who are your target customers?

As a real estate cooperative, our customers are people who purchase shares in the cooperative with the intent to participate in the Cooperative's facilities and services, including use of the services and the facilities offered by the Cooperative when the real estate development is completed.  We have a target of 500 Class C community owners by the end of our investment campaign.  We also have a target of selling T-1 shares to lease all rentable space on the first and second floor of the cooperative.  T-1 owners will be businesses and nonprofits interested in operating their organization on the premises of the development after construction.

In general, Commongrounds is targeting as owners individuals who purchase shares in the cooperative with the intent to participate in the Cooperative's facilities and services, including use of the services and the facilities offered by the Cooperative when the real estate development is completed. We expect most customers will have an interest in helping to develop community-orientated real estate and an appreciation for Traverse City, community-building, local investment, and/or alternative real estate funding models. 

Do you have current customers?

As of February 3, 2019, just over 400 Class C community owners have applied for ownership at a cost of $50 per share.  We also have 6 organizations (business and nonprofits) who have signed a letter of intent to purchase Class T-1 (tenant ownership) shares.  Class T-1 ownership shares will be priced on the actual cost for the cooperative of constructing, operating, and financing the building.  Please refer to the cooperative bylaws for more information.

What is your current customer pipeline?

We anticipate 500 Class C community owners by the completion of the crowdfunding campaign.  Our T-1 shares are fully committed other than tenants who will be partners or subtenants of an already committed tenant.

What market(s) are you in?

Real estate development and operation at 416 E. Eighth Street in Traverse City, Michigan.

Who are your competitors?

There are currently no other real estate cooperatives offering the opportunity to own a building in Traverse City.

As a result, for Class C target customers, there is no direct competitor as there are no other real estate cooperatives offering the opportunity to own a building in Traverse City that is developed and operated by a community-orientated and -owned real estate cooperative.  Class C customers are likely investing their money in managed funds in publicly traded companies or in their personally-owned real estate.

For Class T-1 target customers, there is no competition offering similar arrangements.  T-1 owners currently could either (1) rent space or (2) undertake their own real estate development to purchase and develop property to suit their organization's needs.  Option 1 does not offer the opportunity to build equity in their property or to operate the building as "landlord" in partnership with the other T-1 tenants.  Option 2 is significantly more work and risk for an individual tenant and would not involve co-locating with other T-1 tenants whose organizations and business offer possibility for improved services, shared customers, and reduced risk for each individual T-1 tenant organization.

What is your competitive advantage?

Commongrounds is a unique real estate developer because we are owned by our future tenants and our community.   Our mission to develop real estate in a manner that allows the community to participate so that we can together make the Traverse City our owners already love even better.

How do you sell your product or service?

Anyone can submit a Class C application for ownership on our website. Class T-1 ownership shares are only available through individual agreements and conversations.  They are not publicly available for purchase.  We do not have any sales representatives or anyone earning commission on the sale of ownerships.

How do you market your product or service?

We advertise the shares through individual solicitation to friends, family, and pre-existing networks, organizations, and other relationships in the Traverse City region; and through social media.  We have also received some press attention. 

What is your product development timeline?

We expect to complete our owner capital raise by April 2019 and break ground in May 2019.  The grand opening of the building is expected by Fall 2020 after about 16 months of construction.  Class C owners can being to use the facilities and services in the building at that time.  The T-1 tenant owners (Pathways Preschool, Higher Grounds, Commonplace, and Crosshatch) will be operating their businesses out of the building by the time of the grand opening. 

Provide detail on your hiring plans

Prior to building completion, Commongrounds is operated by a board supervising a project development team consisting of contractors (including the architect, construction manager, owner's representative, and communications and financing team).  As the building nears completion, the real estate cooperative expects to hire at least 2 full-time employees fulfilling: executive management and administration, communications and marketing, property management, community development, and events planning.

What is the composition of your current team?

Please see the Commongrounds Project Narrative for more information our team.  Our current team includes:

Board of Directors & Future Tenant Partners (Higher Grounds Coffee & Trading Company, Commonplace, Iron Fish Distillery, Crosshatch Center for Art &Ecology/May Erlewine, Pathways Preschool, Table Health)

Project Director (Commonplace Law/Kate Redman)

Building Team (Environment Architects/Ray Kendra, Hallmark Construction, Nan Perez, and Ed Bailey)

Financing Team (Sakura Rafferty, Megan Olds)

Communications Team (Joey DiFranco, Andrew Straley, Elise Crafts, Kate Rose)

We are also fortunate to have many advisors and supporters within the community, including Joe Sarafa, an experienced real estate developer, and our LLC investment partners (Jim Olson, Judy Bosma, Mike & Claudia Delp, Laura and Bob Otwell, Kathy Dally, David Koss).

Team

1549399159 kateredman

Kate Redman

Project Director, Board of Directors

Kate is a community enterprise attorney and founder of Commonplace Law and Commonplace, a coworking space and future tenant of Commongrounds.

Why Commongrounds?

"Because I can't wait to hang out in this building!"

1549399176 christreter

Chris Treter

Board of Directors

Chris is the co-founder of Higher Grounds Trading Company, future tenant of Commongrounds.

Why Commongrounds?

"To germinate community-based development that addresses the needs of the ecosystem, workforce, and local population with spaces that foster a sharing and collaborative economy."

1549399198 richardanderson

Richard Anderson

Board of Directors

Richard is the Co-owner of Iron Fish Distillery, Michigan's first farm distillery and future tenant in collaboration with Higher Grounds and a restaurant operator.

Why Commongrounds?

"Joining the Birdhouse allows me to work with a crazy great and audacious group of people working to create a values inspired intentional community and with it, an urban landscape that supports the talent that makes Traverse City what it can be."

1550504176 megan olds

Megan Olds, Fund Development

Service Provider

Megan supports communities and organizations as the founder of Parallel Solutions LLC, and serves on the board of directors of Commonplace, a coworking space and future tenant of Commongrounds.

Why Commongrounds?

"I’m energized by the opportunity for everyone in the community to invest and generate equity in a real estate development project."

1550504176 nan perez

Nan Perez, Construction Owners Representative

Service Provider

Why Commongrounds?

"Commongrounds encompasses some of my most treasured passions in my most treasured hometown: construction, building community & connections, and coffee. Let’s put a shovel in the ground!"

1550504176 ray kendra

Ray Kendra, Architect

Service Provider

Ray is founder of Environment Architects and specializes in environmental, green design, and architecture throughout Northern Michigan.

Why Commongrounds?

"I want to help facilitate an integrated design and process for a unique community driven development."

1550504176 sakura takano

Sakura Takano, Financing Lead

Service Provider

Why Commongrounds?

"I’m excited to optimize federal, state, and local resources to develop and implement workforce and housing solutions in Traverse City."

1550504177 elise crafts

Elise Crafts, Communications

Service Provider

Elise is founder of Statecraft and co-director of Commonplace, future tenant of Commongrounds.

Why Commongrounds?

"I love people, animal puns, and well-designed spaces. I’m eager to connect with the many birds who make this project possible."

1550504177 joey difranco

Joey DiFranco, Communications

Service Provider

Joey is the Creative Director at TentCraft, SEEDS board member and vintage camper enthusiast.

Why Commongrounds?

"I strongly believe that when we all work together as a community, amazing things happen in Traverse City."

1550504177 andrew staley

Andrew Straley, Communications

Service Provider

Andrew is a digital marketer at TentCraft in Traverse City and proud early bird owner.

Why Commongrounds?

"I want to be a part of and help build a community that inspires the people of Traverse City."

1550504178 ed bailey

Ed Bailey, Construction Management Advisor

Service Provider

Why Commongrounds?

"My interest in the project is about the opportunity to work with the people involved. Having a great project also helps."

1550504328 th logo wht grn 100

Table Health

Partner
1550504329 screen shot 2018 12 11 at 9.21.19 pm

Pathways Preschool

Partner
1550504329 hg logo

Higher Grounds Trading Company

Partner
1550504329 cp logo 3 30 173

Commonplace

Partner
1550504329 iron fish

Iron Fish Distillery

Partner
1550504329 xhatch logo

Crosshatch

Partner
1550504408 logo

Hallmark Construction

Service Provider

Hallmark Construction is Northern Michigan's leading construction and development company, located in Traverse City, MI.

About Commongrounds Cooperative

Entity Commongrounds Cooperative
Entity Type Other
State Organized Michigan
Founded March 2018
Social Media
Website

Headquarters

Company Updates

Commongrounds Project Update! August 2019

August 20, 2019

It's hard to believe it is almost back-to-school time already! We hope you are all are enjoying these last official days of summer and gearing up for a beautiful fall.

This summer, the Commongrounds team has been hard at work on building design and assembling the financing pieces for our project. A huge thank you to our architect, Ray Kendra, and his team at Environment Architects for their tireless work on the project; and to the rest of our building team for their work (our Construction Manager, Hallmark, and our owner representatives Ed Bailey and Nan Perez). We feel very lucky to have such a dedicated and experienced team working on the project to make it great (and within budget ;).

We expect to break ground as soon as weather allows in spring 2020! We might do some soil clean-up on the property this fall, but the bulk of the project will start in the spring with completion by summer 2021. This is an update from our original plan to break ground this summer. In June, we realized it would likely be fall at the earliest by the time our building plans and financing were complete. Since fall is not the best time to break ground on a building in northern Michigan, we decided to wait until spring and bumped back some of our other timeline accordingly. We expect to have financing and building plans, including final construction bids and subcontracts in place at the beginning of the year in accordance with a building timeline that lets us hit the ground running as soon as weather allows in spring with building completion by summer 2021.

Why the delay? As we all have heard from other real estate developers, real estate development can sometimes take longer than expected because financing, building design, and bidding are complicated pieces that must fit together in just the right way. Commongrounds is particularly complicated because of our ownership and investment/equity structure. However, we continue to make good progress and are very excited about how the pieces are coming together. We received preliminary letter of loan terms from the bank in January, but the detailed building plans and bids will allow us to finalize bank financing and a loan guarantee from the USDA. When bank financing is finalized, we can start the official process for approval by the MEDC for grant and loan support for the project, which will also take a couple of months.

Some other highlights from this summer:

- 90% Complete Building Design Plans. We're designing the building right down to the electrical outlets. After receiving zoning approval for the conceptual building and site plan, our building team got hard to work designing the guts of the building. Plans were completed at the end of July and we are receiving updated preliminary bids. After that, we'll look at how build in some cost savings without sacrificing the quality and environmental protection aspects of the building to ensure that the project stays in budget with some room for contingencies.

- Community investment. We've been collecting investment from community owners and continue to develop equity investment from other community partners - so far, we have raised about $800k from 140+ investors, in addition to the $550k we raised to help purchase the land. We will share full details when we officially close on the public and private offering. We expect to officially close the Reg CF crowdfunding in September -- so if you haven't already invested, do so now before you miss the window (and the doors, flooring, green roof, and cafe space).

-8th Street reconstruction. If you've been in TC this summer, you know that the city has been doing a major rebuild of 8th Street, right in front of our building, to transform it from an eyesore that is the butt of community jokes to the most pedestrian- and bike-friendly street in town. They are starting to lay the cycle track and sidewalks with projected completion by the end of September. We're working with other businesses in the North Boardman Lake District and the DDA to plan a party to celebrate the street opening in early October. Stay tuned for more updates!

- Full Board development. Commongrounds has operated with an agile start-up board of Kate Redman, Chris Treter, and Richard Anderson to help design and mobilize Commongrounds, the building. We are now ready to build Commongrounds, the organization, which will prepare Commongrounds to be more than just a real estate development and also a space for community events and partnership. To build the organization, we are adding additional community members to the board and leadership committees this fall in order to add more depth, brains, experience, and friendly faces to the leadership team. We'll be announcing the board this fall, including the process for filling community-owner elected board seats, and looking for additional community owner volunteers interested in getting involved in leadership committees.

That's just a taste of what we've been up to -- we'll be sharing other updates with community owners this fall include, some updates in tenant-partners, overall community investment lessons learned, and future events. If you are not already an owner and would like to stay in the loop, visit www.commongrounds.coop and you can become an owner for $50.

Thanks for reading and looking forward to seeing you on 8th Street soon!

Investing $10k or more? Use this link.

March 27, 2019

Hey, there!

If you are receiving this email, you have been invited to invest in our "private" campaign. We can't talk about this one publicly (oh, those securities laws), but if you want to invest $10,000 or more, this is the campaign for you. Investment in public campaign is capped at a lower amount.

Today, I'm writing to ask you take action. We have 6 days left in our public crowdfunding campaign to reach our minimum investment goal. 71 people have pledged a commitment to invest in Commongrounds. Another 106 people have officially said they are "interested" on Localstake in the public campaign but not yet pledged commitment to a specific amount. And yet another 43 people, like you, have said you are "interested" in our private campaign.

If even half the people who have expressed interest in just the private campaign pledged $10,000 today, we would meet our minimum investment goal.

Will you help us close the gap to meet our goal? Just pledge the amount you will invest by logging into Localstake and clicking the green "commit to invest": https://localstake.com/businesses/commongrounds... .

Or, if you would like to invest less than $10,000 - check out our public campaign page at www.localstake.com. Both the public and private campaign investors receive the same terms.

If you are interested in investing but not yet comfortable, let us know what we can do to help.
a. Are you confused about the process?
b. Do you need more time?
c. Do you need more info about rewards?
d. Do you want more info about investment terms or the project overall?

Drop us a line and let us know how we can help. And please feel free to set up a one-on-one phone call or meeting with me (Kate), at https://calendly.com/commongrounds/invest.

A note on the Localstake process, in case you are confused about what it means to show "interest" or "commit": On Localstake, you can click that you are "interested" or you can click "commit to invest," and enter an amount. Localstake will only collect investment dollars when we reach pledged commitment for our minimum goal. So, until we reach pledges for our minimum goal, when you "commit" you are not immediately asked to put money in - instead, you are making a pledge that you will invest when we reach the minimum. This ensures you do not risk investing money unless we receive a minimum level of support from the community as a whole.

Thank you so much for your interest in the project. It is not an exaggeration to say that investment from supporters like you is what makes this project possible. Y'all rock.

With gratitude,

Kate

Today! Show Your Commongrounds Love on Facebook

March 22, 2019

If you have invested or are thinking about investing in Commongrounds, join the project partners in telling your friends and family to help spread the word! Starting today (Friday) at 2pm through this weekend, we are asking anyone who is interested in investing in Commongrounds to (1) Add the "investor" frame to their facebook profile photo (click here: www.facebook.com/profilepicframes/?selected_ove... to go directly to the frame); and (2) post a short testimonial stating who you are, why you are interested in investing in commongrounds, and what you are looking forward to doing in the building when it opens. And, oh, yeah - don't forget to tag @commongroundscoop in your post. Let us know if you have questions. Thanks, y'all. We appreciate you!

And if you have been thinking about completing your investment pledge but haven't pulled the trigger yet --- today could be a great to day to pledge ;) Please feel free to reach out with questions and remember that you click "commit" and enter an investment amount to complete your pledge.

Have a wonderful weekend!

Kate

Commongrounds Project Receives Zoning Approval!

March 22, 2019

In an exciting update, the Commongrounds project received unanimous approval from the Traverse City Planning Commission for its site plan. Other than financing, the zoning approval was the most significant step yet to be completed in approvals for the project and keeps the project on its anticipated timeline to break ground by June 2019. To read more about the approval in local press, check out: https://www.traverseticker.com/news/three-eight...

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Risks & Disclosures

The Company's management will have broad discretion in use of proceeds

The Company has preliminarily designated the use of the proceeds from this Offering for land acquisition, building and construction costs, general working capital purposes and other necessary expenditures as determined in the discretion of management. Accordingly, the Company's management will have significant flexibility and broad discretion in applying the proceeds of the Offering. The failure of management to apply these funds effectively could have a material adverse effect on the Company's business, results of operations, prospects, and financial condition.

No assurances of sufficient financing; Additional capital may be required

Although the Company believes the proceeds of this Offering, along with other planned financings, will provide adequate funding to develop and successfully support its business plans, there can be no assurances that such funds will be adequate. If the Company's cash requirements exceed current expectations, the Company reserves the right to raise additional equity or debt capital, beyond what is being sought with current efforts. There can be no assurance that adequate additional financing on acceptable terms will be available when needed. The unavailability of sufficient financing when needed would have a material adverse effect on the Company, could require the Company to terminate its operations, and Investors could lose all, or a significant portion of, their investment. Additionally, any new financing that might hereafter be issued by the Company may carry certain rights and privileges senior to those of the Investors in C-1 Investment Certificates and may negatively impact the Investors in C-1 Investment Certificates.

Existing and potential litigation

Although management is unaware of any threatened or pending litigation against the Company or management, there can be no assurance that future claims will not be asserted and that, even if without merit, the cost to defend against such claims would not be significant, thus having a material adverse effect on the Company's business, financial condition and results of operations. The Company has never filed any lawsuit against any other person or entity, or been the subject of a lawsuit.

Control of the Company

The Directors comprising the Company's Cooperative Board will have management authority over the majority of the operations of the Company, regardless of the opposition of Investors to pursue an alternate course of action. Investors will have limited rights to vote with respect to the management and limited ability to participate in many decisions regarding management of the Company's business.

The Company is obligated to indemnify its management

Directors of the Company owe certain duties to the Company they serve in connection with the use of its assets. Directors are fiduciaries, and as such are under obligations of trust and confidence to the Company and owners to act in good faith and for the interest of the Company and its owners, with due care and diligence. Notwithstanding the foregoing, the Company is obligated to indemnify Directors of the Company for actions or omissions to act by such Directors of the Company on behalf of the Company that are authorized under the organizational documents of the Company. There are very limited circumstances under which the Directors of the Company can be held liable to the Company. Accordingly, it may be very difficult for the Company or any Investor to pursue any form of action against the management of the Company.

Limited ability to protect intellectual property rights

The Company has not applied for, and has no plans to apply for, intellectual property protection through trademarks or patents. Existing trademarks have been issued for the name 'Commongrounds' for real-estate related purposes. For this reason or others, the Company may become subject to third-party claims that it infringed upon their proprietary rights or trademarks. Such claims, whether or not meritorious, may result in the expenditure of significant financial and managerial resources, injunctions against the Company or the payment of damages by the Company.

No audited financial statements

The Company has not yet sought to have its financial information audited by an independent certified public accountant and there is no assurance that it will do so in the future. All financial information provided in the Offering Materials has been prepared by the Company's management team and has not been reviewed or compiled by an independent accounting firm.

The Company may not obtain sufficient insurance coverage

The cost of insurance policies maintained by the Company to protect the Company's business and assets could increase in the future. In addition, some types of losses, such as losses resulting from natural disasters, generally are not insured because they are uninsurable or it is not economically practical to obtain insurance to cover them. Moreover, insurers recently have become more reluctant to insure against these types of events. Should an uninsured loss or a loss in excess of insured limits occur, this could have a material adverse effect on the Company's business, results of operations and financial condition.

Need for additional financing

The Company is looking to raise $11,805,864 in additional equity, long-term debt and grant financing for the Project outside of this Offering. If the Company's gross proceeds from this Offering and other financing sources do not cover estimated Project costs, completion of the Project may be delayed indefinitely, jeopardizing the Company's ability to make distributions to Investors.

Dependence on a single income producing asset

The Project is expected to be, for the foreseeable future, the Company's only asset. As a result, the Company will not have diversified sources of revenue. The prospects of the Company depend upon the Project maintaining its occupancy, rental, and resale value or increasing in such value. The typical risks relating to an investment in real estate will apply to the Project and its ability to meet debt service obligations. These include, but are not limited to:

  • Changes in the general economic climate and market conditions of the United States and Indianapolis, Indiana;
  • Changes in the occupancy or rental rates of the Project;
  • A failure to lease the Project in accordance with the projected leasing schedule;
  • Limited availability of mortgage funds or fluctuations in interest rates which may render the sale and refinancing of the Project difficult;
  • Unanticipated increases in real estate taxes and other operating expenses;
  • Competition from other similar housing and commercial properties;
  • Environmental considerations;
  • Zoning laws and other governmental rules and policies; and
  • Uninsured losses including possible acts of terrorism or natural disasters.

Due to the lack of diversification, any one or more of the preceding factors could materially adversely affect the value of the Project. If the value of the Project were to decrease and the Company were to choose to sell the Project, liquidate and distribute its remaining assets after paying creditors, Investors might not recover the amount of their investment, if Investors were to receive any funds at all.

Dependence on rental income

The Company's income and operating results may vary significantly from projected amounts and fluctuate substantially from month to month due to several factors, many of which are likely to be outside of the Company's control. These factors, each of which could adversely affect results of operations, include:

  • Unexpected expenditures for development, construction and other expenses;
  • Lease price reductions by the Company, regulations or its competitors or changes in how rent is priced;
  • Actual leasing income could be lower than projected rental income due to lower than expected rental demand;
  • A Tenant may terminate a lease early;
  • Collection of rent may occur in a subsequent year than the year projected due to the requirement or the failure of a Tenant to make rent payments when due;
  • Actual expenses could be in excess of projected expenses;
  • Changes in the demand for or supply of competitive properties;
  • Environmental controls and other governmentally imposed restrictions;
  • Changes in state or local tax rates and assessments;
  • Changes in general or local economic conditions and acts of God or other calamities;
  • The Company's ability to attract, train and retain qualified personnel;
  • Change in federal or state laws and regulations;
  • Timing and number of strategic relationships that are established;
  • Loss of key business partners.

Any projections of the Company's future operating costs will be based upon assumptions as to future events and conditions, which the Company believes to be reasonable, but which are inherently uncertain and unpredictable. The Company's assumptions may prove to be incomplete or incorrect and unanticipated events and circumstances may occur. Due to these uncertainties and the other risks outlined in this section, the actual results of the Company's future operations can be expected to be different from those projected and such differences may have a material adverse effect on the Company's prospects, business or financial condition.

Any projections that prepared or provided by the Company will not be prepared with a view toward public disclosure or complying with the published guidelines of the American Institute of Certified Public Accountants or the Securities Exchange Commission regarding projected financial information. Under no circumstances should such information be construed to represent or predict that the Company is likely to achieve any particular results. The cautionary statements made should be read as being applicable to all related forward-looking statements wherever they appear.

No operating history

The Company was formed in March 2018 and has no previous operating history or past financial information. The Company has not generated any income to date. The Project is currently in an early phase of construction and is not generating rental income. Due to the Company's lack of operating history and the development status of the Project, the Company is unable to forecast its income with any assurance of accuracy. Therefore, we cannot provide any assurance that the Company will be able to achieve projected income levels or projected interest payments to Investors.

General real estate industry risks

The Company will be subject to all the risks inherent in developing and investing in real estate assets. A major risk of owning real estate is the possibility that the Project will not generate sufficient rental income or other income to meet expenses, including debt service or other required payments, or will decrease in value. Additional risks may include, without limitation, general and local economic and social conditions, the supply and demand for comparable properties, energy shortages and costs, declines in neighborhood property values, changes in tax, zoning, building, environmental and other applicable laws, real property tax rates, changes in interest rates and the availability of mortgage funds which may render the sale of properties difficult or unattractive. Such risks also include fluctuations in operating expenses, which could adversely affect the ability of the Company to meet debt service obligations. These risks could result in substantial unanticipated delays or expenses and, under certain circumstances, could prevent completion of development activities once undertaken, any of which could have an adverse effect on the Company.

Environmental liabilities

Federal, state and local laws may impose liability on a property owner for releases, or the otherwise improper presence on the premises, of hazardous substances without regard to fault or knowledge of the presence of such substances. A property owner may be held liable for environmental releases of such substances that occurred before it acquired title and that are not discovered until after it sells the Property. Although the Company has had an environmental assessment of the Property performed, if any hazardous substances are found at any time on or around the Property, the Company may be held liable for all cleanup costs, fines, penalties and other costs regardless of whether it owned that Property when the releases occurred or the hazardous substances were discovered. If losses arise from hazardous substance contamination that cannot be recovered from a responsible party, the financial viability of the Project may be substantially affected. In an extreme case, the Project may be rendered worthless, or the Company may be obligated to pay cleanup and other costs in excess of the value of the Project.

Phase I and Phase II environmental assessments have been completed for the property. A Baseline Environmental Assessment was submitted to the Michigan Department of Environmental Quality and Commongrounds is not expected to be held liable for hazardous substances identified and reported in the BEA, pursuant to state and federal environmental laws. Subject to state approval, Commongrounds has been allocated brownfield funding to assist with any environmental cleanup required onsite.

Investments in property requiring substantial construction carry significant risks

Because the Property requires substantial construction, there are additional risks relating to the nature of such construction efforts. Construction risks include, but are not limited to, the timeliness of the project's completion, the integrity of appraisal values, and the length of the ultimate construction process. If construction work is not completed (due to contractor abandonment, unsatisfactory work performance, or various other factors) and all available financing has already been expended, then in the event of a default the Company may in some instances borrow significant additional funds to complete the construction work. Any such investment could potentially require that it be repaid by the Company prior to the Investors receiving any distributions on their investment; in such event, the ability of the Investors to realize a return on their investment would be materially adversely affected. Investments involving properties with such development or significant rehabilitation business plans have an increased risk of failure.

The C-1 Investment Certificates are offered on a best efforts basis

The C-1 Investment Certificates are being offered by the Company on a best efforts basis as specified herein. The Company will begin using the net proceeds of the Offering immediately. To the extent that the Company does not raise the full $2,000,000 amount that it is seeking in this Offering, some or all of the business objectives and financial forecasts of the Company may be delayed and/or unfilled. There can be no assurances that the Company will raise the full amount of $2,000,000 sought through this Offering.

No market; Lack of liquidity

There currently is no public or other trading market for the C-1 Investment Certificates being offered or any other securities of the Company and there can be no assurance that any market may ever exist for the C-1 Investment Certificates being offered or any other securities of the Company. If a public market does develop, factors such as competitors' announcements about performance, failure to meet securities analysts' expectations, changes in laws, government regulatory action, and market conditions for the industry in which the Company operates in general could harm the price of the Company's publicly traded securities. The Company has no obligation to register the C-1 Investment Certificates being offered or any other securities under the Securities Act or any state securities laws. Investors should be prepared to hold their C-1 Investment Certificates for an indefinite period.

Restrictions on transferability

The C-1 Investment Certificates offered by the Company have not been registered under the Securities Act, nor any applicable state securities laws, in reliance on the exemption from registration in Securities Act Sections 3(b) and 4(2) thereof and in the rules of Regulation D promulgated thereunder. As a result, the C-1 Investment Certificates are subject to restrictions on transferability and resale and may not be transferred or resold by any Investor except as permitted under the Securities Act and applicable state securities laws, pursuant to registration or exemption from these laws, or if the Company has received an opinion of counsel satisfactory to it that registration under such laws is not required. In addition, there is no market for the C-1 Investment Certificates being offered and the Company does not expect that any market will be developed in the foreseeable future.

Investors may not receive a return of their investment amounts and there is no guarantee of return

Investors will be entitled to receive a return on their investment only through the C-1 Investment Certificates and the . The only source of funds for the repayment of the Investors' investment amounts and a return on such investment amounts is the Company's operations. The return to Investors and the future value of the investment will depend on a number of factors which cannot be predicted at this time and which may be beyond the control of the Company. These include the general, local, and industry-related economic conditions. In the event that the Company does not generate sufficient revenues from operations, the Investors may not receive any return at all and may lose a substantial portion (or possibly all) of their investment amounts. Neither the Company nor the Placement Agent makes any representations or warranties with respect to any return on an investment in the Company. There can be no assurance that an Investor will receive any return on an investment in the Company or realize any profits on such Investor's investment in the Company.

The Company anticipates borrowing additional debt senior to the C-1 Investment Certificates

The Company plans to secure a senior bank loan from 4Front Credit Union of up to $8,700,000 (the "Senior Lender", and the "Senior Loan", respectively), which imposes certain conditions on the Company. Any Senior Loan documents will likely contain various representations, covenants (affirmative and negative) and other provisions. Such restrictions, while relatively common in today's real estate financing market, increase the risks of an investment in the Company. If the Company fails to satisfy the covenants, the Senior Lender may declare the Senior Loan in default, in which case, Investors could lose their entire investment in the Company.

Additionally, the Company has issued a class of equity securities with rights and return provisions senior to those being issued to the Investors in this Offering. In the event that the Company does not generate sufficient revenues from operations, or otherwise has insufficient capital to fund the return provisions of the senior equity securities and the C-1 Investment Certificates, Investors may receive a limited return or no return at all.

Purchase price of the C-1 Investment Certificates may not reflect the value of the C-1 Investment Certificates

The offering price of the Class C Membership Shares has been established by the Manager of the Company and is not necessarily indicative of the value of the Class C Membership Shares or the Company's asset value, net worth, or other criteria of value. There can be no assurance that this price accurately reflects the current value of the Class C Membership Shares.

General tax considerations

Investors in the Class C Membership Shares are urged to consult their tax advisors concerning the federal, state, local and foreign income tax consequences of acquiring, owning, and disposing of, the Class C Membership Shares as well as the application of state, local and foreign income and other tax laws. Any federal tax discussion contained in these Offering Materials, including any attachments, was written in connection with the Offering of the Class C Membership Shares by the Company, and is not intended or written to be used, by anyone for the purpose of avoiding federal tax penalties that may be imposed by the federal government. Nothing in these Offering Materials shall be deemed tax or legal advice by the Company or its members.

An investment in the C-1 Investment Certificates is speculative and involves a high degree of risk

An investment in the Company should not be made by persons unable to bear the risk of loss of their entire investment or by persons who may have a need for liquidity from their investment. In making an investment decision, you must rely on your examination of the Company and the terms of the Offering, including the merits and the risks involved. Like all investments, an investment in the Company involves the risk of the loss of capital, and the C-1 Investment Certificates should not be purchased by anyone who cannot afford the loss of his, her or its entire investment. Investors must be prepared to bear the economic risk of an investment in the Company for an indefinite period of time and be able to withstand a total loss of their investment. Investors are encouraged to consult their own investment or tax advisors, accountants, legal counsel, or other advisors to determine whether an investment in the C-1 Investment Certificates is appropriate.

The C-1 Investment Certificates have not been registered under the Securities Act

The C-1 Investment Certificates offered by the Company have not been registered under the Securities Act, nor any applicable state securities laws, in reliance on the exemption from registration in Securities Act Sections 3(b) and 4(2) thereof and in the rules of Regulation D promulgated thereunder. The investment contemplated by the C-1 Investment Certificates has not been recommended, approved, or disapproved by the SEC, or any state securities commission, or other regulatory authority, nor have any of these authorities passed upon or endorsed the merits of this Offering or the accuracy, completeness, or adequacy of the Offering Materials. Any representation to the contrary is a criminal offense.

Investors will be subject to certain suitability requirements

The C-1 Investment Certificates will not be sold to an Investor until such Investor delivers an executed representation, as contained in the Qualified Investor Questionnaire and Subscription Agreement, that he, she or it is a Qualified Investor and meets certain standards. Persons who are not Qualified Investors are not permitted to invest. The fact that a person is a Qualified Investor represents the minimum suitability requirement for an Investor, and compliance with such standards does not necessarily indicate that this would be a suitable investment for such person.

There is no market for the C-1 Investment Certificates and no such market is expected to develop

The C-1 Investment Certificates are subject to restrictions on transferability and resale and may not be transferred or resold by any Investor except as permitted under the Securities Act and applicable state securities laws, pursuant to registration or exemption from these laws, or if the Company has received an opinion of counsel satisfactory to it that registration under such laws is not required. Investors may be required to bear the financial risks of the investment in the Company for an indefinite period of time. Persons who desire liquidity from this investment should not invest.

The Company will have the right to refuse any subscription in its sole discretion

The Company will have the right to refuse any subscription in its sole discretion and for any reason (or no reason), including the Company’s belief that an Investor does not meet the applicable suitability requirements or that exemptions from the registration requirements of any applicable jurisdiction are not available with respect to the issuance of the C-1 Investment Certificates to any Investor under this Offering. The Company may make or cause to be made such further inquiry and obtain such additional information as it deems appropriate with regard to the suitability of Investors. The Company reserves the right to modify the suitability standards with respect to certain Investors in order to comply with any applicable state or local laws, rules, regulations or otherwise.

The information presented in the Offering Materials was prepared by the Company and contains "forward-looking" statements

The Offering Materials (together with any amendments or supplements and any other information that may be furnished by the Company) includes or may include certain forward-looking statements, estimates, and projections with respect to the Company's anticipated future performance. Examples of forward-looking statements include statements regarding the Company's future sales, purchase orders, financial results, operating results, acquisitions, business and monetization strategies, projected costs, revenues, products, competitive positions and plans and objectives of management for future operations. In some cases, forward-looking statements can be identified by terminology such as "may," "will," "should," "would," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "continue," or the negative of these terms or other comparable terminology. Such forward-looking statements, estimates, and projections are not guarantees of future performance and reflect various assumptions of the Company's management that may or may not prove correct and involve various risks and uncertainties over which the Company may have no influence or control. No independent party has verified or confirmed the reasonableness of the assumptions that form the basis of the forecasts. These and many other factors could affect the Company's future financial and operating results, and could cause actual results to differ materially from expectations based on forward-looking statements made in the Offering Materials or elsewhere by the Company (or on its behalf). The likelihood of the Company's success must be considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with growing a startup business. There can be no assurance that the Company will generate any particular level of revenue or will be able to continue to operate profitably. The Placement Agent expressly disclaims any representation or warranty regarding involvement in or responsibility for any forward looking statements contained in the Offering Materials.

Only the Offering Materials may be relied upon in connection with this Offering

Only the information expressly set forth in the Offering Materials or contained in documents furnished by the Company upon request may be relied upon in connection with this Offering. No person has been authorized to give any information or to make any representations other than those contained in the Offering Materials and, if given or made, such information or representations must not be relied upon. Access to the Offering Materials at this time does not imply that information therein is correct as of any time subsequent to this date.

The Offering Materials do not purport to be all-inclusive

The Offering Materials provided to Investors do not purport to be all-inclusive or contain all of the information that you may desire in investigating the Company. You must rely on your own examination of the Company and the terms of the Offering, including the merits and risks involved in making an investment in the C-1 Investment Certificates. Prior to making an investment decision, you should consult your own counsel, accountants, and other advisors and carefully review and consider all of the Offering Materials provided and the other information that you acquire. You should not construe any statements made in the Offering Materials provided as investment, tax or legal advice.

The Company reserves the right to reject some or all of any prospective investment

The offer of the C-1 Investment Certificates by the Company is subject to prior sale and certain other conditions. The Company reserves the right, in the Company's sole discretion and for any reason, to withdraw, cancel, or modify the Offering and to accept or reject some or all of any prospective investment. The Company will have no liability to any Investor in the event that the Company takes any of these actions.

The terms, conditions and restrictions of the C-1 Investment Certificates are fully set forth in the Operating Agreement

The terms, conditions and restrictions of the C-1 Investment Certificates are fully set forth in the Operating Agreement, which you will be required to execute if you decide to invest, the form of which has been provided to you in the Offering Materials section for this Offering on the Company Offering Profile. You should not invest unless you have completely and thoroughly reviewed the provisions of the Operating Agreement. In the event that any of the terms, conditions, or other provisions of the Operating Agreement are inconsistent with or contrary to the information provided in the Offering Materials, that agreement will control. Any additional information or representations given or made by the Company in connection with the Offering, whether oral or written, are qualified in their entirety by the information set forth in the Offering Materials, including, but not limited to, the risks of investment.

No solicitation in any state or other jurisdiction in which such solicitation is not authorized

The Offering Materials do not constitute an offer to sell, or a solicitation of an offer to buy, any security in any state or other jurisdiction in which such an offer or solicitation is not authorized. Except as otherwise indicated, the offering materials speak as of the date the Offering was initiated. Neither access to the Offering Materials nor any sale of the C-1 Investment Certificates shall, under any circumstances, create an implication that there has been no change in the Company's affairs from the date the Offering was initiated.

Each investment is subject to the terms and conditions of the Investor Registration Agreement

Each Investor's subscription for and purchase of the C-1 Investment Certificates is governed by, and subject to, the terms and conditions of the Investor Registration Agreement entered into between the Placement Agent and such Investor, including, without limitation, the investment limits established by the Placement Agent for such Investor, the Placement Agent's rights to terminate the offering or any Investor's registration with the Placement Agent.

The Company will be available to you to answer questions and furnish additional information

The Company will make available to you, within a reasonable amount of time upon receiving a request, at reasonable times and in the manner determined by the Company, copies of material agreements and other documents relating to the Company and will afford you the opportunity to ask questions and receive answers from the Company concerning its business and financial condition. The Company will also provide you an opportunity to meet with representatives of the Company to obtain other additional information.

Securities to be offered to investors

The offering materials being accessed by you (the "Offering Materials") on the Company's profile page (located at https://localstake.com/businesses/commongrounds-cooperative) (the "Company Offering Profile") relate to the offer and sale of C-1 non-voting investment certificates (collectively, the "C-1 Investment Certificates") in Commongrounds Cooperative, a Michigan nonprofit corporation organized under the Consumer Cooperative Act, MCL 450.3100, et seq (the "Company"). The Company is seeking to raise up to $2,000,000 (the "Offering Amount") from potential investors (each, an "Investor" and collectively, the "Investors") through the offer and sale of the C-1 Investment Certificates. The Company owns real estate located at 416 Eighth St, Traverse City, MI 49686 (the "Property") and was formed to develop and manage a mixed-use building to be constructed on the Property (the "Project").

Closing procedures for the Offering

The Offering shall be available to potential Investors until the final closing of the sale and purchase of the C-1 Investment Certificates (the "Final Closing"), which will occur upon the earlier of (i) the date the Company has closed on the purchase and sale of C-1 Investment Certificates for the entire Offering Amount, (ii) 12 months from the date the Offering was initiated, or (iii) the Company terminates the Offering in its sole and absolute discretion (the "Termination Date").

The C-1 Investment Certificates are offered by the Company on a best efforts basis as specified herein. There is no aggregate minimum amount of C-1 Investment Certificates that must be sold in the Offering, and each individual investment transaction will be closed on an Investor-by-Investor basis upon the Company’s acceptance of an Subscriber’s subscription for the C-1 Investment Certificates by its execution of such Subscriber’s Qualified Investor Questionnaire and Subscription Agreement, and counterpart signature page to the Operating Agreement (collectively, the "Subscription Documents") together with a form of payment as specified on the Localstake Marketplace. There is no provision for the escrow of any part of the proceeds from the sale of the C-1 Investment Certificates prior to the termination of the Offering, and unless a Subscriber cancels their investment commitment in the C-1 Investment Certificates within forty-eight (48) hours after the Company’s acceptance of such Subscriber’s Subscription Documents by its execution thereof, there will be no refunds of amounts tendered unless the subscription is rejected by the Company. The Company will immediately use the net proceeds of this Offering as such funds are raised.

Certain risks associated with best efforts offerings

There can be no assurances that the Company will raise the entire Offering Amount or the entire amount of any targeted amount of commitments set forth on the Company Offering Profile. Potential investors that have expressed an interest in the Offering and indicated a commitment amount may subsequently cancel their investment commitment, fail to fund all or a portion of their commitment amount, or the Company may reject all or a portion of their commitment amount. Subscribers should not place any reliance on the Company’s receipt of commitments in an amount equal to or greater than the targeted minimum amount of commitments set forth on the Company Offering Profile as an indication that the Company has or will receive such amount. Upon a Subscriber’s subscription for the C-1 Investment Certificates becoming irrevocable as set forth herein, such Subscriber shall be required to pay his, her or its investment funds to the Company regardless of the amount of Offering proceeds received by the Company as of such date.

The Company's acceptance of investments and cancellations

The Company reserves the right to accept, through execution of a countersignature on the Subscription Documents, an Investor’s subscription for C-1 Investment Certificates at any time prior to the Termination Date of the Offering and may reject the Subscription Documents based upon the Company’s review thereof for any reason or for no reason. Should the Company receive investment commitments for greater than the Offering Amount, the Company will determine, in its sole discretion, which subscriptions to accept up to the Offering Amount.

If the Investor has chosen to transfer their investment funds electronically, these funds will be transferred from their linked bank account as specified on the Company Offering Profile to a deposit account in the name of the Company, forty-eight (48) hours after the Company’s acceptance thereof. If the Investor has chosen another form of funds transfer, the Investor will receive a notice containing instructions for transferring funds to the deposit account in the name of the Company. Investors may cancel their investment commitment in the C-1 Investment Certificates, using the methods made available on the Company Offering Profile, and have their investment funds returned (if applicable) for any reason up to forty-eight (48) hours after the Closing applicable to the Investor’s investment. If an Investor has not canceled his, her or its investment commitment in the C-1 Investment Certificates prior to such deadline, the Investor’s subscription for the C-1 Investment Certificates shall be irrevocable by the Investor, and will be documented through the receipt of an executed copy of the C-1 Investment Certificates, which will also be recorded and maintained on the books of the Company. The Company does not intend to employ the services of a transfer agent.

Securities laws being utilized and investor qualifications

This Offering is made in reliance upon an exemption from registration under the federal Securities Act of 1933, as amended (the "Securities Act") as set forth in Sections 3(b) and 4(2) thereof and in the rules of Regulation D promulgated thereunder. Regulation D sets forth certain restrictions as to the nature of purchasers of securities offered pursuant thereto. The C-1 Investment Certificates will be offered and sold only to persons who meet certain qualifications, including, but not limited to, being either (i) "accredited investors" ("Accredited Investors") as defined in Rule 501(a) of Regulation D promulgated by the United States Securities and Exchange Commission under the Securities Act, (ii) persons who have, either alone or with a purchaser representative, such knowledge and experience in financial and business matters that they are capable of evaluating the merits and risks of the prospective investment, or (iii) "non-accredited investors" whose investment in the C-1 Investment Certificates would not equal or exceed any percentage or dollar limit imposed by the registration exemption being relied upon in their state of residence ((i), (ii) and (iii) collectively referred to as the "Qualified Investors"). The minimum investment that will be accepted by the Company from a Qualified Investor is $10,000.

Use of proceeds in the Offering

The Company intends to use the net proceeds of this Offering for land acquisition, building and construction costs, general working capital purposes and other necessary Project expenditures as determined in the discretion of management of the Company, as explained in further detail on the Funding tab of the Company Offering Profile.

Subscribing for an investment and transferring funds

Investors interested in subscribing for the C-1 Investment Certificates will be required to complete and return to the Company the Subscription Documents, as described herein. Payment of the investment amount is preferred via electronic ACH transfer, but may also be made by check or domestic wire. Instructions for each method of payment will be provided upon investment via the Company Offering Profile.

Fees for placement agent services

As compensation for Localstake Marketplace LLC's services in connection with the Offering, Localstake Marketplace LLC shall be entitled to receive a placement fee paid by the Company (the "Placement Fee"). Below is a breakdown of the Gross Proceeds, estimated Placement Fee and Net Proceeds for the Offering.

  • Gross Proceeds: $2,000,000
  • Estimated Placement Fee: $78,500
  • Net Proceeds: $1,921,500
(1) Estimated placement fee payable by the Company to Localstake Marketplace LLC. The Company will pay a Placement Fee of 4.0% on all Gross Proceeds received by the Company from the sale of the C-1 Investment Certificates in the Offering. The resulting aggregate Placement Fee will be discounted by a $1,500 Offering Preparation fee paid prior to the Offering.

An investment in the Company involves a high degree of risk, and should be regarded as speculative. Prospective investors should carefully consider these investment risks, among others, in addition to the other information presented in the Offering Materials, in evaluating the Company for investment. The risks listed herein are not a complete list of potential risks facing the Company and it may encounter unexpected risks in the future, which, may adversely affect its performance.

Company Updates

Commongrounds Project Update! August 2019

August 20, 2019

It's hard to believe it is almost back-to-school time already! We hope you are all are enjoying these last official days of summer and gearing up for a beautiful fall.

This summer, the Commongrounds team has been hard at work on building design and assembling the financing pieces for our project. A huge thank you to our architect, Ray Kendra, and his team at Environment Architects for their tireless work on the project; and to the rest of our building team for their work (our Construction Manager, Hallmark, and our owner representatives Ed Bailey and Nan Perez). We feel very lucky to have such a dedicated and experienced team working on the project to make it great (and within budget ;).

We expect to break ground as soon as weather allows in spring 2020! We might do some soil clean-up on the property this fall, but the bulk of the project will start in the spring with completion by summer 2021. This is an update from our original plan to break ground this summer. In June, we realized it would likely be fall at the earliest by the time our building plans and financing were complete. Since fall is not the best time to break ground on a building in northern Michigan, we decided to wait until spring and bumped back some of our other timeline accordingly. We expect to have financing and building plans, including final construction bids and subcontracts in place at the beginning of the year in accordance with a building timeline that lets us hit the ground running as soon as weather allows in spring with building completion by summer 2021.

Why the delay? As we all have heard from other real estate developers, real estate development can sometimes take longer than expected because financing, building design, and bidding are complicated pieces that must fit together in just the right way. Commongrounds is particularly complicated because of our ownership and investment/equity structure. However, we continue to make good progress and are very excited about how the pieces are coming together. We received preliminary letter of loan terms from the bank in January, but the detailed building plans and bids will allow us to finalize bank financing and a loan guarantee from the USDA. When bank financing is finalized, we can start the official process for approval by the MEDC for grant and loan support for the project, which will also take a couple of months.

Some other highlights from this summer:

- 90% Complete Building Design Plans. We're designing the building right down to the electrical outlets. After receiving zoning approval for the conceptual building and site plan, our building team got hard to work designing the guts of the building. Plans were completed at the end of July and we are receiving updated preliminary bids. After that, we'll look at how build in some cost savings without sacrificing the quality and environmental protection aspects of the building to ensure that the project stays in budget with some room for contingencies.

- Community investment. We've been collecting investment from community owners and continue to develop equity investment from other community partners - so far, we have raised about $800k from 140+ investors, in addition to the $550k we raised to help purchase the land. We will share full details when we officially close on the public and private offering. We expect to officially close the Reg CF crowdfunding in September -- so if you haven't already invested, do so now before you miss the window (and the doors, flooring, green roof, and cafe space).

-8th Street reconstruction. If you've been in TC this summer, you know that the city has been doing a major rebuild of 8th Street, right in front of our building, to transform it from an eyesore that is the butt of community jokes to the most pedestrian- and bike-friendly street in town. They are starting to lay the cycle track and sidewalks with projected completion by the end of September. We're working with other businesses in the North Boardman Lake District and the DDA to plan a party to celebrate the street opening in early October. Stay tuned for more updates!

- Full Board development. Commongrounds has operated with an agile start-up board of Kate Redman, Chris Treter, and Richard Anderson to help design and mobilize Commongrounds, the building. We are now ready to build Commongrounds, the organization, which will prepare Commongrounds to be more than just a real estate development and also a space for community events and partnership. To build the organization, we are adding additional community members to the board and leadership committees this fall in order to add more depth, brains, experience, and friendly faces to the leadership team. We'll be announcing the board this fall, including the process for filling community-owner elected board seats, and looking for additional community owner volunteers interested in getting involved in leadership committees.

That's just a taste of what we've been up to -- we'll be sharing other updates with community owners this fall include, some updates in tenant-partners, overall community investment lessons learned, and future events. If you are not already an owner and would like to stay in the loop, visit www.commongrounds.coop and you can become an owner for $50.

Thanks for reading and looking forward to seeing you on 8th Street soon!

Investing $10k or more? Use this link.

March 27, 2019

Hey, there!

If you are receiving this email, you have been invited to invest in our "private" campaign. We can't talk about this one publicly (oh, those securities laws), but if you want to invest $10,000 or more, this is the campaign for you. Investment in public campaign is capped at a lower amount.

Today, I'm writing to ask you take action. We have 6 days left in our public crowdfunding campaign to reach our minimum investment goal. 71 people have pledged a commitment to invest in Commongrounds. Another 106 people have officially said they are "interested" on Localstake in the public campaign but not yet pledged commitment to a specific amount. And yet another 43 people, like you, have said you are "interested" in our private campaign.

If even half the people who have expressed interest in just the private campaign pledged $10,000 today, we would meet our minimum investment goal.

Will you help us close the gap to meet our goal? Just pledge the amount you will invest by logging into Localstake and clicking the green "commit to invest": https://localstake.com/businesses/commongrounds... .

Or, if you would like to invest less than $10,000 - check out our public campaign page at www.localstake.com. Both the public and private campaign investors receive the same terms.

If you are interested in investing but not yet comfortable, let us know what we can do to help.
a. Are you confused about the process?
b. Do you need more time?
c. Do you need more info about rewards?
d. Do you want more info about investment terms or the project overall?

Drop us a line and let us know how we can help. And please feel free to set up a one-on-one phone call or meeting with me (Kate), at https://calendly.com/commongrounds/invest.

A note on the Localstake process, in case you are confused about what it means to show "interest" or "commit": On Localstake, you can click that you are "interested" or you can click "commit to invest," and enter an amount. Localstake will only collect investment dollars when we reach pledged commitment for our minimum goal. So, until we reach pledges for our minimum goal, when you "commit" you are not immediately asked to put money in - instead, you are making a pledge that you will invest when we reach the minimum. This ensures you do not risk investing money unless we receive a minimum level of support from the community as a whole.

Thank you so much for your interest in the project. It is not an exaggeration to say that investment from supporters like you is what makes this project possible. Y'all rock.

With gratitude,

Kate

Today! Show Your Commongrounds Love on Facebook

March 22, 2019

If you have invested or are thinking about investing in Commongrounds, join the project partners in telling your friends and family to help spread the word! Starting today (Friday) at 2pm through this weekend, we are asking anyone who is interested in investing in Commongrounds to (1) Add the "investor" frame to their facebook profile photo (click here: www.facebook.com/profilepicframes/?selected_ove... to go directly to the frame); and (2) post a short testimonial stating who you are, why you are interested in investing in commongrounds, and what you are looking forward to doing in the building when it opens. And, oh, yeah - don't forget to tag @commongroundscoop in your post. Let us know if you have questions. Thanks, y'all. We appreciate you!

And if you have been thinking about completing your investment pledge but haven't pulled the trigger yet --- today could be a great to day to pledge ;) Please feel free to reach out with questions and remember that you click "commit" and enter an investment amount to complete your pledge.

Have a wonderful weekend!

Kate

Commongrounds Project Receives Zoning Approval!

March 22, 2019

In an exciting update, the Commongrounds project received unanimous approval from the Traverse City Planning Commission for its site plan. Other than financing, the zoning approval was the most significant step yet to be completed in approvals for the project and keeps the project on its anticipated timeline to break ground by June 2019. To read more about the approval in local press, check out: https://www.traverseticker.com/news/three-eight...

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Important Disclosures: localstake.com is a website owned by Stake Management LLC (“Stake Management”), which licenses SaaS tools and technology to a variety of issuers, broker-dealers, investment advisers, financial institutions and other entities. Stake Management is not a broker dealer, funding portal or investment advisor. The permitted use of Stake Management’s technology should not be interpreted as an endorsement or recommendation of any issuer, offering, or technology licensee. The Localstake Marketplace Platform operates under a technology license from Stake Management.

All offerings of securities are made through Localstake Marketplace, a registered broker dealer and member of FINRA and SIPC. Stake Management and Localstake Marketplace are hereinafter referred to collectively as the "Localstake Marketplace Platform Operators", unless otherwise specified.

The Localstake Marketplace Platform Operators do not provide legal advice, tax advice, or make investment recommendations, and no communication through this website or in any other medium should be construed as such. Investment opportunities posted on this website are private placements. Private placement investments are NOT bank deposits (and thus NOT guaranteed or insured by the FDIC, by a bank, or by any other federal governmental agency), and are NOT guaranteed by the Localstake Marketplace Platform Operators or any of their collective affiliates, owners, managers or members. Private placements of securities such as those displayed on this website MAY lose value. There is NO guarantee of a return on your investment and investors must be able to afford the loss of their entire investment. Neither the Securities and Exchange Commission (SEC) nor any federal or state securities commission or regulatory authority has recommended or approved any investment or the accuracy or completeness of any of the information or materials provided by or through this website. Nothing on this website shall constitute an offer to sell, or a solicitation of an offer to subscribe for or buy, any securities to any person in any jurisdiction to whom or in which such offer or solicitation is unlawful.

Any financial projections or returns shown on the website are illustrative examples only. Any investment information contained herein has been secured from sources the Localstake Marketplace Platform Operators believe are reliable, but we make no representations or warranties as to the accuracy of such information and accept no liability therefor. Offers to sell by issuers on Localstake Marketplace or the solicitations of offers to buy by investors on Localstake Marketplace, any security are only made through official offering materials that contain important information about risks, fees and expenses. Investors should conduct their own due diligence, not rely on the financial assumptions or estimates displayed on this website, and are encouraged to consult with a financial advisor, attorney, accountant, and any other professional that can help to understand and assess the risks associated with an investment opportunity. Please review the risks of investing in private placements on Localstake Marketplace.