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Tevlin: Continued subsidies for Global Market up for debate

  • Article by: JON TEVLIN
  • Star Tribune
  • December 3, 2013 - 7:40 PM

On a recent weekday afternoon, shoppers at the Midtown Global Market mused over what to have for lunch, the fish tacos at Los Ocampo, or maybe a camel burger at Safari Express.

It was a couple of hours after the lunch hour, however, so while a few dozen people scattered around the dining area chatted or used laptops, most of the ethnic shops selling everything from East African drums to Ole and Lena fortune cookies were empty.

The market, which features goods from the many ethnic immigrant communities of Minnesota, proves that it’s a small world after all.

Maybe too small.

It’s clear that the renovation of the former Sears site into living space, corporate offices for Allina Hospitals and Clinics and the ethnic market have transformed the area and brought traffic, business and — they say — 1.2 million visitors.

But since it started in 2006, the market portion has struggled to break even. Now the Minneapolis City Council will be deciding in the next few weeks whether to continue to subsidize the market, an issue that has become suddenly contentious behind the scenes.

It is one of Mayor R.T. Rybak’s signature projects, and he earmarked $185,000 in his budget for the market, rather than make it vie for competitive grants. That seemed to rankle some, and as of Tuesday he said the item was being discussed. At issue is whether to give the market $185,000 for operations and $85,000 to subsidize free parking. The city would also forgive about $1.5 million in outstanding debt.

The debt removal makes some sense because it would allow the market to leverage that to make deals with their private lenders. But critics calculated the city has given the market more than $3 million in grants and low-interest loans over the years, and wonder when it will stop.

Feelings about supporting the market seem to fall into two categories: Those who see it as public support of private businesses that unfairly benefits one group of merchants over others. And those who think that if we can give a half-billion dollars to build a football stadium, the money used to help small businesses in a poor neighborhood seems like a pittance.

At a budget meeting, Council Member Lisa Goodman criticized continued spending on the project, calling it “absolutely outrageous.”

“There are plenty of good organizations in town that have a public purpose [and] we do not fund their operations,” said Goodman, who declined to comment for this column. Council Member Meg Tuthill also questioned subsidized parking.

Ironically, just as the debate ignited, the director of one of the nonprofits that run the market was on his way to Washington, D.C., to pick up an award for “exceptional initiatives that promote immigrant integration.”

Mike Temali, founder of the Neighborhood Development Center, which manages the market, bristles at the idea that public money “subsidizes” private businesses. Instead, he said it funds the training, marketing and multilingual entrepreneurial support the project was designed for.

“This is a business incubator,” said Temali, who acknowledged the market struggled during the recession. “It costs a little to do that, but it pays off.”

Temali points to the Salty Tart (“we built their kitchen”), now a James Beard award winner, and Sonora Grill, “a huge success” that is expanding to the Longfellow neighborhood.

Rybak jumped at the chance to defend the market. He pointed out that it was conceived to replace an Allina cafeteria, “a riskier and much more expensive” idea that would help the community more.

Rybak said that despite the recession, the market has survived in a poor neighborhood and is closing the gap on debts. “These people are heroes,” Rybak said. “They didn’t come to the city for help, I did.”

Whether Rybak runs again for office, this is legacy-building time, and he certainly doesn’t want the market to become his Block E.

Temali called the market “a unique and powerful combination of private, public and nonprofit cooperation, and we bring huge community benefits.”

I agree. Nobody wants to see the market fail. But Goodman and council members are right to question whether the city is picking favorites, and they need to ask when enough is enough. Though some indoor markets across the country get public subsides, others such as Pike Place Market in Seattle are sustainable from rent.

Temali has an answer: He thinks they will break even in three more years with more tenants (occupancy is now more than 80 percent), slowly increasing rents and a focus on more fresh foods.

We should hold Temali to his prediction, and hope the market finds the right combination of tenants to thrive.

In case we ever have a hankering for a camel burger.

 

jtevlin@startribune.com • 612-673-1702 Twitter: @jontevlin

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