Extra Seasoning

Early this month, New Seasons Market announced plans to build its 13th store on a vacant lot in North Portland’s Eliot neighborhood. 

That’s good news for the listless economy and the upscale grocery chain, which employs about 2,000 people.

It’s even better news for Eileen Brady, the Portland mayoral candidate who has touted her role as a “co-founder” of New Seasons as her primary qualification for the top job at City Hall.

“I know what it’s like to have thousands of people depend on you for a paycheck to support their families,” she said in a speech last year.

Brady’s campaign website highlights the grocery chain’s story, and she does as well on the campaign trail, talking about how she “and her husband, along with two other families and many friends, co-found[ed] the Portland-based business” in 1999.

It’s understandable why Brady would make her connection to New Seasons the centerpiece of her campaign. Since it opened in 2000, New Seasons has joined Powell’s Books and Stumptown Coffee on the short list of businesses that help define Portland.

“She always identifies herself as a New Seasons founder,” says Jim Moore, a political science professor at Pacific University in Forest Grove. “She’s relying a lot on the New Seasons brand because it’s popular, has spread throughout the city, and is seen as a local entity that has done well and reinvests in the community.”

Brady supporters haven’t missed the message. At a Brady campaign rally in December, MergerTech CEO Nitin Khanna said she will make City Hall a clean, inviting and well-run place, “just like New Seasons.” 

But previously unreported public documents raise questions about Brady’s actual role in the company, and whether her claim to be a “co-founder” has any substantive meaning.

The documents provide details on the finances of a large, privately held company. 

In the context of the 2012 mayoral race, however, the ownership stakes the documents reveal are more notable for what they don’t contain:

The name Eileen Brady. 

“Co-founder” is a term of art, not a legal definition. It is the title Brady provides for her time at New Seasons on her LinkedIn résumé. In a previous version, Brady described herself as a “founding co-owner.”

In an interview Jan. 16 at their Mount Tabor home, Brady and her husband, former New Seasons CEO Brian Rohter, addressed exactly what role Brady played in the company. 

When pressed, Brady acknowledged she was never an employee, officer or director of New Seasons. 

“I was never on the payroll,” she said.

She never had an office or a phone number there, nor was she ever paid for any of the time she says she put in.

During the time New Seasons was starting up, Brady held full-time, paying jobs with other organizations.

Nevertheless, Brady insists she played a major role in creating and marketing the New Seasons brand and overseeing a host of important tasks. 

Eileen Brady discusses her role in starting up New Seasons in an interview from last year.

She says she conducted focus groups, acted as company spokeswoman, wrote the New Seasons’ employee manual, established the company’s health insurance program and even helped edit headlines and copy for the store’s ads.

Jala Smith, an early New Seasons employee who served as a creative director for nine years, recalls Brady being heavily involved. “She was a significant contributor,” Smith says. 

“This,” Brady said, “was Brian’s and my business.”

Rohter backs up her story.

“New Seasons Market would not have been started or been successful without Eileen’s contributions,” he says.

While acknowledging that “it’s a fair question because of the opaqueness of the term ‘founder,’” Rohter adds, “there’s an undercurrent of sexism—you can just look at the blogs.”

So what does the public record say?

Oregon law requires companies seeking liquor licenses—whether they’re dive bars or grocery stores—to make thorough disclosures of their ownership structure to the Oregon Liquor Control Commission. The transparency requirements exist in part to deter organized crime. Filing a false application violates state law and can result in license revocation.

In 2000, shortly after New Seasons was founded, the company filed such a declaration with the OLCC. 

Those records show just three original investors in the business: Stan Amy, Chuck Eggert and Rohter. 

On the form, the OLCC asks, “Will anyone else not signing this application share in the ownership or receive a percentage of profits or bonus from the business?”

Rohter, who filed the OLCC papers, checked the box that read “no.”

Rohter explains he answered “no” merely to shield Brady from any potential liability should New Seasons fail. He says he always considered any money he put into the company a joint investment with his wife, and says most of their initial investment came from her savings.

OLCC records also show that Amy and Eggert bore the lion’s share of the initial risk in the company. 

Amy, who was a substantial investor and one-time CEO of Nature’s Northwest, New Seasons’ predecessor company, originally held 44.5 percent of New Seasons. Eggert, another major Nature’s investor, owned another 44.5 percent. 

Rohter held 11 percent, a figure he and Brady say grew over the years.

In campaign literature, Brady says she and Rohter “risked our entire life savings…to start New Seasons Market.” 

That claim appears to be an exaggeration. 

OLCC filings show Rohter’s initial cash investment in New Seasons was $220,000. In those filings, he listed his and Brady’s net worth as $712,000. 

The couple now says they later invested more sweat equity and money—everything they had except retirement accounts and checking accounts—ultimately bringing their stake in New Seasons to 24 percent.  

It’s difficult to find independent confirmation of Brady’s role as a co-founder from New Seasons’ other founders. 

Eggert—who, with Amy, owned and sold Nature’s Northwest before they started New Seasons, and now runs Pacific Natural Foods, a manufacturer of soups and soy products—declined repeated requests to discuss Brady’s role. He has not contributed to her campaign.

Amy, likewise, would not answer questions about Brady. He has donated $10,000 to Brady’s campaign, and his wife, Christy Eugenis, has donated another $10,000.

Both men referred questions to current New Seasons CEO Lisa Sedlar, who did not join the company until five years after its founding. 

“I wasn’t here at the time,” Sedlar says when asked about Brady’s early role. “But New Seasons would not be New Seasons if Eileen had not contributed so greatly.”

There’s no disputing New Seasons grew into a major success—so much so that one of the Northwest’s savviest investment groups wanted in on the action.

In late 2009, Rohter announced the company was selling a minority stake to Endeavour Capital, a Portland-based buyout firm that has invested in other local companies. 

“We’re very pleased to announce that Endeavour Capital, Portland’s own private capital firm and a leader in helping food and retail companies move to broad-based employee ownership, is becoming an investor in New Seasons Market,” Rohter announced in a Dec. 9, 2009, post on New Seasons’ blog. 

“I want to emphasize that the company is not being sold,” he added.

That characterization was at odds with documents New Seasons filed with the OLCC in March 2010. 

The documents show that Endeavour Capital bought a majority interest—55.44 percent of New Seasons—for $31.1 million.

That purchase price valued the entire chain at $56.1 million.

Another consequence of the sale was to essentially cash Rohter out of his then-20-percent stake in New Seasons, for about $11.2 million.

After the sale, Amy and Eggert still own a combined 44 percent of New Seasons. (Rohter says a stock-option plan will ultimately return majority ownership of New Seasons to Amy, Eggert and its employees, but that hasn’t happened yet.)

Rohter now owns less than 1 percent of the company. He left as CEO in 2010 and is no longer a board member.

Brady’s subsequent entry into the mayoral race placed New Seasons, however awkwardly, into the political discussion, although Sedlar, New Seasons’ CEO, says the company does not endorse or contribute to candidates—including Brady.

Endeavour Capital’s principals have contributed generously to Brady’s campaign—$8,000 so far.

But the description of New Seasons on the Endeavour website does not support Brady’s background story. 

“The company was founded in 1999 by three pioneers in the natural foods industry,” Endeavour’s website reads. “Endeavour developed a relationship with the three primary owners over many years.”

Brady was not one of them.