In a scary recession, businesses find comfort in co-ops

REI was founded during the Great Depression by 23 mountain-climbing buddies who wanted to pool their efforts to fund their adventures. Now, even in the scary recession, REI offers guided trips to Mount Kilimanjaro; the sky-high, mystical ruins of Machu Picchu; plus less daunting landscapes such as Trinidad and the Greek Islands.

REI is a highly successful co-op. Local entities, from a national retailer to a small school in North Las Vegas, seem to benefit from the camaraderie the cooperative business model provides.

In a cooperative, the business is owned and controlled by the people who use its services. They finance and operate the service for their mutual benefit. The theory is, that by working together, they can reach an objective that would be harder to attain alone.

Stable Development founder Lance Bradford wanted to try the model after noticing a trend among business owners.

Bradford also owns L.L. Bradford Co., a certified public accounting and consulting company, and he found that most businesses lease their office space instead of buying.

Bradford founded Stable Development in 2005. Each office building the company develops is financed by investors and Stable, who collectively own 60 percent of the property. Tenants, collectively, own the remaining 40 percent.

That's only a portion of his model.

The tenants are selected from targeted industries that Bradford's team thinks will complement one another well in an office park. Bradford wants to match businesses that might refer clients to one another.

"Everybody's right here," Bradford said.

Companies that take up residency in one of Stable's buildings aren't required to refer clients to each other, but Bradford hopes it will happen naturally.

For example, Stable built the Coronado Medical Center in 2008. The two-story building houses medical professionals who specialize in sports medicine-related services from physical therapy to surgery.

Stable's Corporate Center at 8880 W. Sunset Road consists of six buildings. Four two-story buildings and two three-story buildings are filled with businesses that Bradford and his team selected to be there.

"It gives us a great resource," Bradford said.

L.L. Bradford is a tenant in one of the three-story buildings and Clark County Collection Services is housed across the parking lot in a two-story building. Other tenants include a mortgage company, a corporate attorney's office, wealth management and insurance.

"Our business has grown through cross referrals," Bradford said.

In 2010, L.L. Bradford grew about 10 percent and in 2009 the business grew about 8 percent.

Bradford plans to add three more buildings to Corporate Center on the now-empty 4.5-acre lot he owns next to the development. He'd like to add a payroll company to his business community.

"We've created a seamless group that can refer to each other," Bradford said.

Bradford said he can help a client who needs a service offered by another business in his park. He may not make money directly from sending that client across the parking lot, but he may earn trust and secure a client for life.

"It can better your quality and increase your revenue with common interests," Bradford said.

Also, Bradford said, it can eliminate the need for outside networking.

"It's a lot better than any organization," Bradford said. "The economic downturn causes businesses to come together more."

Stable is developing the 8.5-acre Seven Hills Business Plaza now, which will include five to seven buildings that Bradford hopes to fill with medical professionals.

Before construction starts on any of his buildings, Bradford secures a roster of tenants that sign a minimum 10-year lease.

Bradford eventually wants to take this model to a few other urban markets.

"I think you'll see more of this over time," Bradford said.

A larger-scale business cooperative in Las Vegas is REI, a retailer of goods for outdoor enthusiasts.

REI is now the nation's largest consumer cooperative. The co-op, founded in 1938, operates 114 stores in America and two in Southern Nevada.

The REI cooperative has more than 3.9 million members, all of who receive dividends from their annual purchases. Historically, members receive about 10 percent back on their purchases each year.

A lifetime membership costs $20.

The retailer is operated by a 16-person, member-elected board. Store employees don't have to be members, but REI spokeswoman Megan Behrbaum said many are.

Customers do not have to be members to shop at REI, but members receive free shipping and store discounts. Last year, members received more than $80 million in dividends.

"It's a model that works for us and differentiates us from other retailers," Behrbaum said.

On a smaller scale, the Kids' Co-Op, a nonprofit preschool and kindergarten, has been in North Las Vegas for more than 20 years operating as a cooperative.

The school functions under the premise that parents pay tuition to fund licensed teachers and administrators, but the families are expected to help in their children's classrooms and in other areas at the school to save costs.

Each month, parents are required to work in the classroom for two days per child in attendance. Also, each family is required to help in another area outside of the classroom such as yard maintenance, facilities or as a member of the board of directors. Assigned duties may include replacing vacuum bags, pulling weeds or cleaning laundry. There are opportunities for parents to fulfill cooperative duties on weekends or after school hours. Katie Halvorson, publicity and marketing manager for the Kids' Co-Op, has three children attending the school.

"I think it's wonderful," Halvorson said. "You will never, ever have an opportunity to watch your children in the classroom and watch them learn like this again."

Halvorson said the school works around families' schedules.

"We're really a community," Halvorson said. "It affords you a unique opportunity."

There are about 60 families in the Kids' Co-Op, which the Junior League of Las Vegas founded in 1982. Preschool tuition for the 2010-11 academic year costs about $150 per month for two days per week and $225 for three days. Kindergarten tuition costs $400 per month. The school offers discounts for multiple children.

Kids' Co-Op charges a few nonrefundable fees, such as a $200 building fund fee per family, a $50 supply fee for kindergarten and a $75 registration fee.

On an even smaller scale, one chiropractor looked to the cooperative model to meet some of his marketing needs.

Chiropractor Joseph Nicola founded a cooperative marketing consortium called Complete Injury Management about eight months ago.

As a chiropractor, he had specific marketing goals, but found the cost of professional services was too expensive for his budget alone. About 10 chiropractors pay for a marketing team's services through the company. The doctors share a website and marketing collateral.

"Together we're a whole lot stronger than we are apart," Nicola said.

Matthew Massey, marketing administrator for Complete Injury Management, said the group has been able to increase its lead generation from 15 to 20 each month to about 100 each month through the cooperative.

"It's through putting like-minded people together," he said. "You can't carry the burden on your own."

An interesting side effect of the consortium is that Massey believes quality of care has increased at the 10 clinics. He thinks it's because the doctors all are keeping closer tabs on one another and want to put their best feet forward, so to speak.

Contact reporter Laura Emerson at lemerson
@lvbusinesspress.com or 380-4588.