From Publishers Weekly:
Porter Square Books will open a second location in Boston’s Seaport District, taking a ground floor space in a new literary center that will house the creative writing non-profit GrubStreet and the poetry non-profit Mass Poetry. GrubStreet executive director Eve Bridburg made the announcement at the organization’s annual Muse and the Marketplace conference at the Boston Park Plaza Hotel on April 6.
“It is so exciting,” said Porter Square Books co-owner David Sandberg. “These days successful bookstores are successful community places. We’ve had a really close relationship with GrubStreet because there is a philosophical affinity between what we care about and what they care about, and this played right into it.”
GrubStreet’s Bridburg has led the effort to create the facility, which will house classrooms, offices, a performance space, a café and the 1,300 sq. ft. bookstore. “We’ve always thought of Boston as a literary city, but this marks a true turning point,” Bridburg said.
After an initial plan to partner with Harvard Book Store did not advance, Porter Square Books stepped in; a decision that Bridburg said is essential to establishing the new center as a literary hub. “They are a terrific local bookstore, known for their incredible support of writers and the local writing scene,” said Bridburg. “They are excited to sell books relevant to our classes and the craft of writing and to highlight local writers. We can’t wait to partner with them on book launches. They share our values.”
The addition of a second store would have been impossible a year ago, Sandberg said, but with the implementation of a financing agreement that gave 10 of the Cambridge-based store’s booksellers an ownership stake in the store, they were able to consider expanding operations.
Link to the rest at Publishers Weekly
PG says that, with the second and third floors occupied by nonprofit organizations, he hopes Porter Square Books makes some money to keep the building’s finances afloat.
The addition of a second store would have been impossible a year ago, Sandberg said, but with the implementation of a financing agreement that gave 10 of the Cambridge-based store’s booksellers an ownership stake in the store, they were able to consider expanding operations.
Following the link embedded in the above was truly interesting.
Porter Square Owners Sell Half Their Store to Employees
They’re going to wind up with nine or ten owners, each holding an equal share (I think?), when the current owners retire. They must have already all coughed up a substantial enough sum to fund this expansion, or such is my take on matters. Also interesting how the older article says it is nine employees, but the newer one says ten. I wonder how decisions will be made, etc., in an organization structured like this. Majority vote? If somebody goes off the rails and wants to stock only works by L. Ron Hubbbard can they be removed?
There’s a lot of paper-slinging going on but no money changing hands. A bookseller gets a loan and an “ownership stake” (but probably no control), and they pay down the loan “with support from” the realized profits, which implies that they have to pitch in some of their own cash.
One assumes that if an employee cashes out their share they just realize the contributions they’ve made either from or in addition to the profits from their particular share. One wonders just how secure an “escrow-like” account is in that regard.
The possible tax implications are interesting. The owners convert part of their capital investment into a loan so that if they do manage to sell out in a decade, less of their capital comes back to them through that channel.
What happens in the future? They say that staff will be in a position to complete purchase of the other half of the store, but that’s left a bit vague. Good luck with that folks.
They converted a capital asset into a (future?) liquid asset. We might see more of these deals if the wealth tax materializes.
Interesting scheme.
Would be more interesting in a profitable business.
Actually it’s more like they are selling the capital asset over time, spreading out their tax liability, assuming they are describing this scheme properly to the IRS.
As Patrick wonders, the relevant questions for the employees have to do with what, exactly, do they own, and what rights does that entail, and how are those rights organized? I certainly hope for all their sakes that good legal help was consulted.
Humorous hypothetical: what would happen if the store fell on hard times and all of the booksellers decided to “cash out their share.”
If there is a balloon payment at the end it could revert to the seller since there is no third party between the buyer and seller. That’s what has me thinking scam.
The payments may end up being just rent.
“PG says that, with the second and third floors occupied by nonprofit organizations, he hopes Porter Square Books makes some money to keep the building’s finances afloat.”
Oooo, low blow, but oh so very true as poorly as many bookstores are doing. Are the nonprofits the types that would have lots of foot traffic that would have the money and want of books?