She didn’t get all of the money she asked for to fund a business development program in Frogtown, but State Rep. Rena Moran was able to bring over $1 million.
Moran requested $2.6 million in the House’s omnibus yearly spending bill for the Neighborhood Development Center in her central St. Paul District 65A. In the end, the fifth-term legislator, who has urged the importance of staying focused on incremental, cumulative progress, was able to come away with $1.3 million split over two years for business development nonprofits in the Black neighborhood of Frogtown.
The Neighborhood Development Center (NDC), started in 1993 by Mihailo Temali, supports small business ownership and entrepreneurship through training, loans, business services, and business incubators. Programs operate through the lens of small business ownership and equity, with an eye to cultural competency.
“If we took a three-year snapshot [from 2016 to 2018], almost 60 percent of our clients are African [immigrants] or African American,” said NDC development and communications director Elisa Pluhar. “In that same time period, we deployed $3.7 million in loan capital to African or African American-owned businesses.”
Overall, NDC’s clientele averages 85 to 90 percent of people of color. Eighty-one percent are from households earning less than 50 percent of the area median income.
A way out of that bottom-half income bracket is through developing business which spurs job growth. Sixty percent of businesses aided by NDC are housed in previously vacant buildings, an important benefit in neighborhoods blighted by empty storefronts and plywood-covered doors and windows. Starting businesses in these neighborhoods helps turns things around.
“I really believe in self-sufficiency, and we always talk about the importance of access to good wages. We talk about it even more in the Black community,” said Moran. “What we don’t talk enough about is small business ownership being a job creator. NDC creates access to small business ownership, and their focus on communities of color is important to me. A traditional bank is not going to take that risk.”
Although NDC helps entrepreneurs all over the Twin Cities, they started in St. Paul with a view to revitalizing ailing business corridors suffering from consumer flight to suburban malls and big box stores. They have given strong support to businesses in the Selby Ave. corridor.
Instead of the usual practice of bringing in a large, external corporation to provide jobs, NDC seeks to empower residents to strengthen their own neighborhoods and retain wealth through the creation of local businesses and jobs.
Developing more than business
Moran asked for money for the nonprofit because of its track record. A notable and expansive NDC effort was the University Avenue Business Preparation Collaborative Project, which helped small businesses — many owned by immigrants of color — stay open during the lengthy construction of the Green Line light rail on University Ave. from 2010 to 2014. The retention of such businesses and the creation of new ones is vital, said Moran.
NDC’s long history with St. Paul was also important to the hometown legislator’s support for funding. “I’m a St. Paul girl,” she said. “In St. Paul, NDC helps strengthen communities by investing in small businesses. From my perspective as someone who represents St. Paul, it’s a joy to see NDC’s intentional investment…recognizing the value of businesses of color and the barriers they may face.”
A part of the funds gained in the omnibus bill goes to reproducing NDC’s model outside of the metro area, says Pluhar. “Of the amount appropriated in the first year, $150,000 is for outreach and training activities outside the seven-county metropolitan area … The rest of the $500,000 will go towards NDC’s programs in Minneapolis and St. Paul,” she said.
The bill also commits $50,000 in grants for cultural-based nonprofits.
Business development not only brings an important bump in jobs but enriches the neighborhood in other ways. People who own a business increase their personal income an average of $14,964 a year, according to a study by the research wing of the Wilder Foundation in St. Paul.
Eighty-two percent of owners serve as role models in their neighborhoods, serving on church boards and business associations. And nearly half of small businesses are the sort that serve as a safe community gathering place.
This last statistic resonates strongly with Moran. “It’s a win-win when we can see local mom-and-pop businesses right here in our community that are a reflection of the community. I love to be able to go into a Golden Thyme or a Heritage Tea House, or Tapestry Restaurant or any of those places on University Avenue and see a reflection of the community, and the diversity in the community.
“It’s feeling welcome, and feeling safe, and being invited to just be.”