Clifton Market power struggle threatens the future of the neighborhood co-op

Monday board meeting could be stormy
Clifton Market power struggle is taking a toll
Clifton Market power struggle is taking a toll
Posted at 6:00 AM, Sep 15, 2017
and last updated 2017-09-15 06:00:05-04

CINCINNATI -- It appears there's a substantial shortage of cooperation at the Clifton Market co-op right now.

Two factions of the market's board are battling over control of a business that opened early this year with the feel-good goal of maintaining a grocery in the heart of the Clifton business district that would be owned and operated by local residents who had purchased ownership shares.

As Monday's board meeting approaches, both factions seem to agree on at least one subject: Weekly sales need to increase and must average at least $130,000 to cover all of the market's expenses, including bank loans, payments to vendors and the payroll. There's also some general agreement that the acrimony that has surfaced in the last few months hasn't been productive.

"I don't think it (the Aug. 26 meeting) was a properly called meeting, but we really just need to put our heads together to make the store succeed," said board member Marilyn Hyland, who has been one of the driving forces behind reopening a grocery in the neighborhood where she grew up.

"This (board member controversy) has to end if you want to work with the banks and vendors," said Mark Irey, a former Clifton Market trustee and a share owner who helped establish the financial framework for the market. "There are more people out there who want to loan more money to the market, but they won't do it given the state of the current board." 

Irey said he isn't part of the "Hyland faction" but has tried to remain somewhat neutral in talking with most of the board members in an effort to bring an end to the divisiveness.

"There are too many egos on the board. Board meetings should be boring. There shouldn't be people showing up with pitchforks yelling at each other," said Irey, who lives in Clifton and works for U.S. Bank as a corporate banking underwriter.

Just before the emotionally charged meeting in late August, Marilyn Hyland played a role in distributing an email "warning" that was highly critical of board chair Gary Crawford and board member Ben Pantoja for attempting to change the bylaws so that they could alter the board membership. Once new people were on the board, the email from Hyland said, the market at 319 Ludlow Ave. would be sold to raise cash and then leased back from the new owners.

Board chair Crawford, an executive with the Laurel Grocery Co. in London, Kentucky, was named to the board at the annual meeting in June and then elected as the chair in July. Crawford did not respond to phone calls or emails for this story.

Irey confirmed a published report that said the market owes Laurel Grocery about $500,000. Irey also wrote a detailed rebuttal to the "warning" that was sent out as a message from Crawford.

Board attorney Gary Goldman declined to comment and referred questions to Hyland or Crawford.

Store manager Keith Brock had little to say other than that he was optimistic that the market's problems would be solved.

Hyland and her son, Adam, also a member of the nine-member board and its former chair, have become lightning rods for criticism by those who believe that they have exerted far too much influence on how the market operates without providing much transparency about decisions they have made.

"They have a habit of kind of saying that things have to be done their way or it's the highway," said former board member Rama Kasturi, who has invested about $34,000 in the market and has emerged as one of the most outspoken critics of the Hylands and what she calls the "Hyland 5," which includes both of the Hylands and board members Robert Krikorian, Alex Durst and market treasurer Shaun McCance.

The lack of support for the Hylands became evident at the July meeting when Adam Hyland was replaced by Crawford as the board chair. Then, at the Aug. 26 meeting, share owners voted overwhelmingly to approve two measures that could have an impact on whether the Hylands would continue to play major roles at the grocery.

One measure -- a change to the bylaws -- was approved by a margin of 114-48 and prohibits two family members from serving on the board at the same time. A second measure -- approved 116-48 -- says the board nominating process that was employed in June was "unacceptable."

That procedure had allowed Adam Hyland to be elected again while it bumped Kasturi off the board.

Marilyn Hyland contends that proper notice was not given before the Aug. 26 meeting, which could be used as grounds to challenge decisions that were made at that meeting. If the change in the bylaws that pertains to family members holds up, she said, it would not take effect until the next annual meeting in June of 2018. That means she and her son could continue to serve on the board until then, Hyland said.

"She can contend anything she wants," Kasturi said. "We did get a proper notice on the morning of the meeting. I believe the election is legal … If you want to sue us, go ahead." 

Irey conceded that the legality of the Aug. 26 meeting is "up in the air." But he said the more important issue is that the market "has a board that doesn't function." 

No date has been set for another board election, and it's unclear whether Adam Hyland will retain his board seat until next June.

Irey said it's not an overstatement to describe the market's financial position as 'critical' right now and that the board has to figure out how to keep the store open beyond the next six months. He confirmed that the initial projections called for weekly sales of $256,000, roughly twice what the sales have been in recent months. The market sent out an email last week saying that sales had increased for five successive weeks after the media began reporting about cash-flow shortfalls.

In late June, just prior to the annual meeting, an email went out that urged market supporters to spend another $50 a week at the market, buy another ownership share for $200 or make a loan to the market. Some 1,700 people own shares in the market.

Marilyn Hyland said she's working on a fundraising plan that should kick into gear later in the month. She said the market needs to raise $100,000 in the next month and another $400,000 in the next six months to pay the bills and keep the market running.

One of the reasons for the sales increase in recent months was an effort to trim some of the prices so they are more competitive, she said. The Clifton market co-op was created about three years ago with a plan to reopen what had been Keller's IGA, a family-owned store at 319 Ludlow Ave. that had become a beloved institution in the neighborhood. Keller's closed its doors in 2011.