St. Paul-based nonprofit wins an award, plus $75,000, for fostering homegrown entrepreneurs in low-income neighborhoods.
It’s Friday afternoon at the Grooming House Barbershop on University Avenue in St. Paul’s Frogtown. The clippers are buzzing, the music cranked high and business is good. No Aveda spa feel here, the design is energetic industrial, bold black and white.
Friends Daymn Johnson and Dedrick Young created their slick new shop on the soon-to-be-running light-rail line with help from a $30,000 microloan from the Neighborhood Development Center (NDC), a St. Paul fixture that has boosted more than 4,000 low-income entrepreneurs in its 20 years.
Johnson said the financing “really helped us to be able to set ourselves apart.”
“You never have a second chance to make a first impression,” he said, in the spirit of a true stylist.
Now the NDC has been given an award for its work with entrepreneurs such as Johnson. The group said Friday that it has received the 2013 Citi Microentrepreneurship Award for Capital Access, which comes with $75,000. The awards are part of global program financed by Citi Foundation, which started making awards in the United States last year through the Washington, D.C., nonprofit Association for Enterprise Opportunity.
NDC founder and CEO Mihailo “Mike” Temali called the win gratifying.
“For us to get national recognition from our peers, it validates our practices,” Temali said.
Temali started NDC in 1993 after running a similar program at St. Paul’s Western Bank. The idea is that it’s difficult to attract businesses to low-income neighborhoods, so they have to grow their own. What they need, he said, is training and access to capital. NDC provides both.
A few weeks ago the organization lent a down-on-his-luck man $9,000 to buy a used pickup truck so he could fill a contract he scored to clean Metro Transit bus stops, Temali said.
“For every $1 that we raise and spend, there is $28 that goes back into the community,” Temali said, quoting recently released research from the Amherst H. Wilder Foundation. “They are self-funding engines of change.”
Wilder reported that from 457 NDC-trained and financed alums in business today, 2,285 jobs have been created and $24 million of annual payroll generated.
About half of NDC’s budget comes from grants, he said. About 40 percent is earned through fees, interest on loans, consulting and work the organization does for both city governments. The last 10 percent comes from federal funding, he said.
Not only did NDC lend the money for the Grooming House Barbershop, it helped develop the complex the shop is in, Frogtown Square, with three other neighborhood groups and Episcopal Homes. At the corner of University Avenue and Dale Street, Frogtown Square has retail on the bottom and senior apartments on top.
NDC also helped develop Mercado Central and Midtown Global Market, both on Lake Street in Minneapolis. It has worked extensively with the entrepreneurs in both places, Temali said.
Temali said that the larger, high-profile location for the Grooming House Barbershop, now on a Central Corridor light-rail stop, should propel the business.
“From that base he can really put more of his entrepreneurial talent into play,” Temali said of Johnson. “The place is always packed.”
Johnson is already working on a line of men’s dress clothes and is developing a mobile app called Peerparazzi. It enables people wanting a photo to be taken, so they can be in the photo and not taking it, to locate someone nearby to take the photo and immediately send it to them, with the original on the other person’s device being erased. There’s a game aspect involving points and rewards, he said. NDC is helping with the patents.