GSBDC Assists with Purchase of Farm & Garden Store

Posted 05.11.15

Loan: SBA 504

Dennis and Marla Gawarecki (husband and wife) purchased the store, warehouse and inventory of the former Baldwinsville Farmer’s Co-op in the fall of 2013.  The Co-op had been established in 1921 to serve the needs of the local agricultural community. However, over time the store evolved with the area becoming a full service Farm and Garden store serving the residential Baldwinsville community.  They carry an extensive line of pet food and supplies, lawn and garden supplies and propane refills.

Since the Co-op no longer served its original function and its stockholders were scattered across the country, they decided to dissolve and sell the store.  However, they wanted to ensure that the store continued to support the Baldwinsville community and felt the best way to achieve that goal was to accept the Gawareckis’ proposal to purchase the business.  Dennis had been the Co-op’s Store Manager since 1992 with responsibility for the oversight of all aspects of the store’s management.  Prior to joining the Co-op, he worked at Agway’s farm and garden stores initially as a store manager and then later becoming a territory manager.

The Gawareckis contacted Community Bank to determine the best financing structure to purchase the inventory and store.  The store is located at 82 East Genesee Street in Baldwinsville, NY and consists of a 9,518 sq. ft. one-story wood frame metal-clad building with approximately 4,320 sq. ft. of finished retail space and 5,198 sq. ft. of warehouse and an attached barn annex of 1,200 sq. ft. to accommodate their inventory.  As part of this transaction, they also needed to replace the store’s roof and fund the purchase of the store’s inventory.

Community Bank provided a line of credit to assist with their inventory needs, and the real estate part of the project was financed using the SBA 504 program.  This allowed them to minimize their down payment requirement to 10% conserving cash needed for inventory.   Community Bank provided 50% of the financing in a first mortgage position with the Greater Syracuse Business Development Corporation (GSBDC) providing a 20 year fixed-rate second mortgage for 40% of the project cost through the SBA 504 program.  The financing structure also included allocations for the cost of the environmental, appraisal and other soft costs such as title insurance and mortgage tax.  According to Russ Sturtz, Assistant Vice-President Commercial Banking, “The SBA 504 Program was the perfect solution for the Gawarecki’s, allowing them to purchase the store and replace the roof while conserving cash for the inventory purchase.  Peggy Adams and Kathy Campbell made the process as simple as possible. We are happy to have been able to assist the Gawarecki’s with the purchase of this long standing business.

Without the Gawareckis’ purchase, this 92 year old business and its jobs would have been lost to the community.  Dennis and Marla Gawarecki added that “We are grateful that GSBDC and Community Bank has programs available that enable individuals to purchase or fund businesses with a smaller percentage down.  The purchase of the Baldwinsville Farmers Co-op was important to us to maintain the integrity of the store, the Village of Baldwinsville and retain the employees of the store.  We are grateful for the opportunity and look forward to many successful years of business.”

They currently employ four full-time and two part-time with plans to add two to three positions over the next few years.