NOTE as of 3:13 PM – This statement originally linked to the incorrect draft of the prospectus, which was missing information about ability to collateralize. This has been updated.
Many of you are already aware through direct outreach, word of mouth, or recent press coverage, that we are at a critical juncture for Alchemist Public Market. I am grateful for the high level of interest in the project at this moment and in the passionate support it is receiving, but this also means the story is being told in bits and pieces with different lenses. It is important that you hear from me.
The truly important story right now is that our situation presents a high level of urgency. The project needs to find $3 million by June, whether in loans or gifts, to move forward. To be clear, we have $9.4 million secured in state and federal grants, but this is paid only as reimbursements. Finding a $3 million loan will allow us to spend the money needed to submit for grant reimbursement. This means that we now have a little over a week to find funding or financing that will enable us to carry on with construction. If we do not find a solution by June 2, we will be forced to make a very difficult decision to permanently wind down the project. Given the constraints of our construction contract and grant contracts, there is no option to adjust the timeline.
This is not due to the project not being viable. The project is permitted, federally compliant, and under construction with a project completion date next spring.
This is not due to a lack of grant funding. We have $9.4 million in contracted state and federal grant funding secured for construction.
The issue is one of cashflow and timing. Our state and federal grants both take about 60 days to reimburse us, but our construction costs are billed monthly – and we estimate spending about $1.2-1.5 million per month. To cover those costs while waiting on reimbursements, we need $3 million in liquid working capital. Alchemist CDC has already fronted roughly $680,000 toward construction that is awaiting reimbursement. This is not a complaint about the reimbursement process, which has operated in this manner for years, but simply to explain the need for additional liquidity.
The need for liquidity is not a surprise. We have been well aware of this need since learning the terms and conditions of our grants in 2023 and have been pursuing solutions since then. Many funders over the years have expressed their love for the project and have invited us to approach them again to request their help once it was actually under construction. This presents major difficulties, as it is very nearly too late to ask for funding once under construction, but it is also an understandable position when a funder wants to ensure their money is used well.
We have also sought loans from private banks and while there are many local banks who want to be of assistance, their risk considerations require them to decline making a loan against secured reimbursable grants unless we can provide full cash collateral. Of course, if we had the cash collateral, we would not need the loan. Even so, it is a perfectly reasonable decision and I have to say that I much prefer banks err on the side of caution when lending their customers’ money.
Various levels of government entities have been approached for assistance throughout that time. Candidly, the need seemed to be too distant and remote to inspire action when we asked in 2024 or 2025, and is seen as too last-minute and urgent when we ask in 2026. This is all understandable, and while Alchemist Public Market is our top priority, I know that it is one of thousands of needs facing any government agency.
Much attention has focused this week on the City of Sacramento declining to assist with a loan. This attention is understandable, because we believed for good reason we had a pathway to City partnership and we asked many community partners to share their support for this approach. When we received a definitive answer from the City declining to provide or co-sign a loan, we were compelled to let our network of supporters and partners know that advocating to the City was no longer an effective use of their time. Because the City was our last remaining viable prospect for this funding, the news of their “no” hit many of us harder. But that is a matter of timing. It is important to note that the City is just one of many entities that have declined to assist with solving this liquidity crisis so far. The City provided a crucial short-term loan for this project in 2022 and is currently supporting our food entrepreneurship training and incubation program.
I have been overwhelmed by the level of community support we have experienced in the last 24 hours with so many people offering to work through their networks trying to find funders or financiers for whom this might be a good fit. When Alchemist Public Market opens, it will be because of the efforts of so many Sacramentans who care about their community and share the vision for this project. If you are interested in helping provide liquidity for this project in the form of an interest-bearing loan or gift, or would like to reach out to your own network to help find those who might be able to help, you can find our prospectus for download here. You may also find the Greater Sacramento Economic Council’s economic impact analysis of the project for download here.
While we would welcome it, we are not asking for any one person or organization to provide the full amount. Alchemist CDC is all about community and would be thrilled to have a group come together to solve this need collaboratively.
We are also happy to discuss naming rights if someone is interested in providing a direct, tax-deductible investment via a major gift – naming rights opportunities begin at the $250,000 investment level.
Finally, in the midst of all of this, I want to remind everyone of the incredible promise and vision of Alchemist Public Market. On Wednesday, the project received national media coverage from Upworthy and I ask that you take a few minutes to read and share this beautiful story about the project and the Sacramento entrepreneurs it will serve.
Thank you for your support and partnership.