Community Reinvestment Fund (CRF) has been selected by Goldman Sachs and its foundation for a $5 million investment in the form of a long-term, low-interest loan that will help leverage up to $30 million in future small-business loans in disadvantaged neighborhoods in the Twin Cities and around the country.
"This is huge for us," said CEO Frank Altman, who runs what has become one of the country's largest nonbank lenders of U.S. Small Business Administration (SBA) loans to businesses.
CRF will help expand Goldman's 10,000 Small Businesses loan program in underserved urban areas. The loans will target businesses that have at least two years' experience, more than $150,000 in revenue and at least two employees. CRF serves a disproportionately high number of female- and minority-headed businesses in struggling neighborhoods, such as veteran businesswoman Gloria Freeman's $1.2 million purchase-and-renovation of a long-shuttered north Minneapolis charter school into Olu's Center, a day care for toddlers as well as seniors that will employ 25 people at $11 to $25 per hour plus benefits.
"I am particularly proud that the Goldman Sachs 10,000 Small Businesses initiative is now in my hometown," said Esta Eiger Stecher, CEO of Goldman Sachs Bank USA and a Twin Cities native who attended the University of Minnesota before moving to New York for a career in law and commerce.
Interested small-business owners in the Twin Cities should explore the Goldman Sachs 10,000 Small Businesses national education program at: www.10KSBapply.com.
CRF is a U.S. Treasury-certified Community Financial Development Institution that is authorized to make U.S. Small Business Administration loans that target capital-poor communities. Last year it originated $43 million in SBA "7A" business loans.
"We don't compete with community banks on business loans," Altman said. "We target the next layer, that's not easily banked. Banks often refer us to businesses that aren't quite 'bankable.' We're one of the top 100 SBA 7A business lenders. We've made more than 200 loans since 2011 with an average size of about $400,000."
Altman, with business and philanthropic backing in 1989, started CRF as an underwriter of community development loans to be pooled and sold to institutional investors. That market evaporated during the Great Recession, thanks to Wall Street and mortgage industry excesses. CRF is putting together the first offering of the non-SBA guaranteed portion of a seasoned loan portfolio for sale to institutional investors. There is a growing appetite for such "social impact" investments by institutions.
Volunteers lighten up nonprofit bike shop
John Loheit, marketing director of Plymouth-based Energy Management Collaborative, learned last fall that Full Cycle, the nonprofit bike-refurbish-and-repair shop in south Minneapolis that works with homeless teens, was paying high electrical costs and getting little illumination in the abandoned auto repair shop it has used since 2008.
Loheit, a bicyclist with a heart, enlisted colleagues and acquaintances at Boe Electric and ESI Lighting to assemble a high-efficiency package worth about $10,000 that they installed for free this spring. This will cut the electric usage by 40 percent and amp up the visibility and safety just as bike-repair season ramps up.
"We were happy to help out and see the result," Loheit said.
Executive Director Matt Tennant, a bicycle-loving, entrepreneurial youth worker, established Full Cycle when he saw that building a bike gives some kids traction, as well as transportation. He opened Full Cycle under the umbrella of parent agency Pillsbury United Communities, next door at E. 35th Street and Chicago Avenue S.
This year, Full Cycle's staff of six will have contact with 4,000 teens, referring many of them for housing, education and nutrition services. They will help up to 200 refurbish their own bicycles from donated equipment, and employ 20 as paid interns.
Full Cycle this year expects to generate $100,000 in revenue from the sale of 250 refurbished bikes to the public, and bike repairs. Tennant also has to raise $400,000 from foundations, businesses and individuals to pay the bills and keep the lights on. He appreciates volunteers and donors from Quality Bicycle Products and Donaldson Co. of Bloomington, as well as Thrivent Financial, Erik's Bike Shop and others who buy into his social-enterprise model of helping lost teens get traction with hands-on activity.
Tennant has placed some clients in jobs at local cycling companies. More information: www.fullcyclebikeshop.org.
Public buildings are Minneapolis' biggest energy losers
A new analysis of the energy use of 365 public and commercial buildings in Minneapolis reveals that they have the combined potential to save $11 million on energy costs per year, or about 10 percent, without anybody freezing or overheating.
For greenhouse gas scorekeepers, that would cut greenhouse gas emissions by more than 62,000 metric tons annually.
The city of Minneapolis report analyzed the 2013 energy use of 194 commercial and 171 public buildings that submitted data under the city's energy benchmarking and transparency ordinance. The buildings in the report include 98 million square feet of floor space and account for total energy use equivalent to that of 47,000 houses, or all households in south Minneapolis.
Of the 146 largest properties, 27 are high performers, 51 perform above average and 68 perform below average. The below-average performing buildings could save 43 percent on energy costs if their performance improved to average. Hospitals, hotels and schools have the greatest potential for energy savings.
Office buildings are generally high performers, with an average federal Energy Star score of 87 on a scale of 100. A building that hits 75 or higher is eligible for Energy Star certification. The median score was 38 for public buildings and 81 for private properties.
The energy use of these 365 buildings represents 26 percent of Minneapolis' commercial and industrial greenhouse gas emissions. Energy use in commercial and industrial buildings accounts for 47 percent of emissions in the city. Minneapolis plans to reduce emissions by 15 percent this year and 30 percent by 2025.
Let them buy cake
Lawyers for Minnesota home bakers and canners who peddle their own food are hailing a Minnesota Court of Appeals decision that reversed a Ramsey County District Court decision. It allows a lawsuit brought by Minnesota home-based bakers to proceed that challenges a state law banning the sale of such goods to farmers markets and community events and limits their sale to $5,000 annually per producer.
"We're one step closer to Minnesota's home-based bakers having the freedom to earn an honest living," said attorney Erica Smith of the Virginia-based Institute for Justice, who filed the case in 2013 on behalf of home bakers Jane Astramecki and Mara Heck, who want to earn more for their cakes, cookies and jams. "These foods are perfectly safe, and consumers should be free to purchase them."
