Mercado Central could get break on city loan

A Latino co-op marketplace credited with transforming a south Minneapolis corner is in line to get a financial break from the city — a delay on loan payments that co-op leaders say they can no longer afford.

The Minneapolis City Council's Community Development and Regulatory Services Committee on Tuesday gave unanimous support to a proposal that would allow the Mercado Central to put a two-year pause on making loan payments to the city. The plan still faces a full council vote.

The 15-year-old market, located at 1515 E. Lake Street, was developed with the backing of the city and nonprofit groups. It has three loans with the city, with an outstanding balance of $553,623.

Council Member Lisa Goodman said the temporary reprieve is a good strategy to help a project whose leaders are working hard to stabilize the books.

"It's not a bailout, this is not a handout, it's not a disaster in any way," she said. "This is acknowledging that there have been some challenges over the past couple of months."

The market, which is run by two nonprofit organizations and the owners' co-op, says it's now struggling to make its $2,057 monthly loan payments.

Organizers blamed multiple issues: higher than expected utility bills because of a cold winter, high maintenance costs to keep up with vandalism, and the market's highest-ever vacancy rate. Currently, seven of its approximately 40 available spots are empty.

"I think each business had a different story; there's not one overarching theme," he said. "Business has been hard, I think it's fair to say, in many sectors of the economy."

LaFave said leaders of the market are taking several steps to fix the problems. In October, the co-op will take over property management duties it had outsourced to a private firm since 2012. That move will save $1,900 per month. The co-op also estimates that the change in management will drop monthly repair and maintenance costs by up to $5,000 per month.

With those changes, the market expects that it will even out its books within a year and be able to resume payments after two years.

Council Member Alondra Cano commended the market's "strong strategy" and its leaders.

"Without them, and without a co-op on this corner, creating jobs for people, creating places for families to come and visit, creating places for cultural connections and understanding to happen, the Ninth Ward would not be such a vibrant and dynamic place that it is today," she said.

"We don't get paid unless you succeed," she said. "And we want you to succeed because we want to get paid. And so this is a good way to ensure that a little bit of time will provide big benefits for everybody in the long run."