CHEDA Board Meeting - Heroes Rise Coffee seeks loan
Closed since April due to what they said was continued struggles involving equipment failure, the owners of Heroes Rise Coffee in Crookston, Matt and Jeff VanGrinsven, are exploring the possibility of being at a different location when they reopen, the former DaRoos Pizza site downtown, and are seeking a $75,000 loan from CHEDA’s revolving loan fund to buy new equipment and expand by launching their new canning operation.
Members of the CHEDA Board this week, after considerable discussion, tabled the matter until they had more information. CHEDA Board President Kurt Heldstab left open the possibility of scheduling a special board meeting if necessary to revisit the loan request before the board’s next scheduled meeting the third week of June.
Heroes Rise Coffee has a fairly dedicated customer base. The father/son (Jeff and Matt) ownership team provides free coffee to first responders and donates some of their profits to initiatives that benefit first responders. Matt is a UMN Crookston graduate and is a flight paramedic, and Jeff is a retired police chief.
With a store in Bemidji, they brought their coffee truck, known as the “Mobile Command Unit” to downtown Crookston one day last fall and subsequently sold more coffee in a single day than they ever had. That spurred the VanGrinsvens to pursue a more permanent location in Crookston, and by November they’d opened in the University Avenue location next door to I.C. Muggs and Best Buy Liquor that had previously been home to coffee bistros Cofé and then Chickadee Coffee Roasters, both of which eventually closed. As part of their financing package to open in Crookston, the VanGrinsvens purchased for around $31,000 existing kitchen/coffee-making equipment, which CHEDA had taken ownership of when Chickadee Coffee Roasters closed.
But the VanGrinsvens said various components of the equipment failed to perform adequately early on, and then a “massive” equipment failure forced their closure last month.
If they reopen in their current location, their plan is to open their canning operation in the space immediately next door, to the south, CHEDA Executive Director Craig Hoiseth said. If they move to the former DaRoos site – Hoiseth said it’s possible the VanGrinsvens have a verbal agreement to do so – they could operate their coffee and food operation as well as their canning operation in the same space.
The Times on its Facebook page on Tuesday asked readers/Heroes Rise customers if they’d rather see the business reopen at their current location, or downtown at the former DaRoos site. Of the almost 80 comments as of press time Wednesday, three trends emerged:
• Heroes Rise has a passionate fan base.
• Downtown proponents would love to see Heroes Rise fill the DaRoos space. (The former Arby’s location was also mentioned several times, mostly because it’s equipped with a drive-through, but many noted that it would be too costly and is too big of a space for a single business.)
• Many would like to see Heroes Rise remain at its current location, mostly because they don’t want to lose drive-through service.
Board member questions, concerns
Among the questions asked and concerns voiced by CHEDA Board members:
• Steve Erickson said he preferred that Heroes Rise have a “home” identified before they ask for a loan. If the VanGrinsvens can’t do “everything they want” at their current location, he said he wasn’t comfortable issuing funds “up front.” To that, Hoiseth said there is likely no reason for the VanGrinsvens to continue the process of potentially securing the former DaRoos site if they don’t have the loan in place.
• Craig Buness wondered why either one or both of the VanGrinsvens weren’t in attendance at the CHEDA Board meeting. To that, Hoiseth said he had advised them that their attendance wasn’t required or necessary, since he’d developed a detailed narrative on their business and their loan request for board members to read.
• Wayne Melbye, who used to be general manager of Ampride/Crookston Fuel, which was home to somewhat similar coffee and kitchen equipment, said he had a “hard time” believing that commercial/industrial level equipment would fail after only a few years.
• Tom Vedbraaten noted that Heroes Rise Coffee is the third coffee shop to be located at the University Avenue location, and that the CHEDA Board had many discussions and came up with several financing options for Cofé and Chickadee Coffee Roasters, yet both ended up closing anyway. He also called not having a drive-through at the former DaRoos site a “recipe for disaster.” To that, Hoiseth said that, in speaking with the VanGrinsvens, he was advised that having a drive-through is not critical to their business model – their Bemidji store does not have one – and that they’re more interested in increasing walk-up traffic, which they said is minimal at their current location. As for the overall success of Heroes Rise in Crookston, Hoiseth added that the VanGrinsvens said they were cash-flowing and that Crookston is a good market for them.
Erickson was the first to suggest tabling the matter, but he was quick to note that Heroes Rise seems to have really caught on in Crookston.
“They have a great market and when they shut down, people were upset,” he said. “There’s a need for it and a want for it in the community, I know that for sure.”