The Twin Cities area is starting to see visible results of racial equity pledges made after George Floyd's murder.
More than $100 million in projects will break ground or open this year, all partly funded by efforts that emerged or expanded after the riots in 2020 left visible scars and highlighted inequities across the metro. Just six projects are expected to generate 1,450 new jobs for the state, with more on the way.
While a few sources are not renewing their equity grants this year, other players such as Wells Fargo and the Pohlad Foundation are fulfilling pledges or adding more aimed at businesses owned or operated by people of color as part of their diversity, equity and inclusion efforts (DEI).
"This will be a big year" for equity investments, said Steve Grove, commissioner of the Minnesota Department of Employment and Economic Development, adding that the state committed more than $60 million toward such efforts over two years. "With the Fortune 500 market, you [also] have a huge surge in focus on DEI and I have not seen that abate at all."
If successful, the efforts will produce new businesses, well-paying jobs and possibly begin to move the needle on well-documented racial disparities in lending, hiring, wages and housing.
According to DEED, Minnesota Black unemployment hit 7.4% in June before sliding to 3.9% in December. Unemployment for Latin Americans fell to 3.8%, while the rate for Native Americans was a staggering 12.7%. The jobless rate for whites is 2.3%.
Other gaps abound. The state's median household income is $47,700 for Blacks, and $80,900 for whites.
Hoping to shrink the gaps, U.S. Bank, Target, Bremer Foundation, the McKnight and Pohlad foundations, Wells Fargo, Allianz and others invested hundreds of millions of dollars to hasten change.
Here are some of the resulting projects.
Diversifying energy sector
Armed with legislative aid and tax credit help from U.S. Bank, Renewable Energy Partners will open a renovated $2.5 million jobs training center in north Minneapolis later this year.
Construction has started. On a recent Wednesday, building owner and Renewable CEO Jamez Staples studied blueprints while nearby a contractor ground down lumpy concrete floors, and a gaggle of heating engineers orchestrated plans for the dangling morass of wires and ducts inside the training center.
Staples bought the shuttered building in 2018 as a way to bring high-tech, energy focused jobs that pay $25 an hour to his neighborhood.
When finished, the center "will train thousands" to install and calibrate solar panels, storage batteries and electric-vehicle charging stations, he said.
With U.S. Bank's help, Renewable Energy has already outfitted the rooftops at North High School and Emerge Second Chance Recycling with solar panels using local laborers. Now that mission will spread with training designed to bring more minorities into the energy field.
"This project here will help to diversify the energy and electric utility sector substantially," Staples said. "We look forward to making sure that young people, underserved populations and BIPOC communities have access to this facility for programming and training to make sure they are ready for those jobs to come."
Fueling food entrepreneurs
Come fall, the Northside Economic Opportunity Network (NEON), will break ground on a $16.5 million commercial kitchen and food-entrepreneur incubator building on W. Broadway near the Capri Theater in north Minneapolis.
The project will bring 261 construction jobs, 205 food factory jobs, food science and business classes to the North Side and generate $25 million in economic activity, according to an analysis by the University of Minnesota. Incubator jobs will pay about $18 an hour.
General Mills, Target Corp., McKnight Foundation, Northwest Area Foundation and a congressional earmark are helping fund the project, which will house several small food firms and a farmers market to counter the area's food desert reputation.
"This will be a catalyst" for jobs, revenue and business acumen, said NEON President Warren McLean. "We are trying to reduce the racial wealth equity gap and we believe the most effective tool to do it is entrepreneurship."
Last year, NEON provided technical assistance to 1,308 business owners and issued $2.6 million in grants and loans to entrepreneurs of color in Minneapolis.
'Life changing' housing
In June, Minneapolis native, real estate developer and former professional basketball player Devean George will start converting a 200,000-square-foot warehouse into a modular housing factory on Olson Hwy. near Summit Academy.
The $27 million factory will make steel-framed and fully outfitted modular apartments that can be stacked 12 stories high. The operation will open in January 2024 with 130 area workers running the indoor, temperature-controlled assembly line.
"We'll have about 350 jobs the second year," said George, CEO of the George Group North who partnered with Sunrise Bank, the Pohlad Foundation and the city of Minneapolis to bring the project to fruition.
"Our jobs [will] start around $31 an hour. That is life changing. It has an immediate impact when I can take someone off the street who is underemployed, train them and give them a paycheck by Friday," George said. "This is a once-in-a-lifetime opportunity to provide [factory] jobs in north Minneapolis."
The first modular units off the assembly line will become the building blocks for two other George projects: a $25 million Valley Creek affordable housing complex in Brooklyn Park and his $60 million affordable housing complex at the Upper Harbor Terminal in Minneapolis.
George has tapped Black-owned Tri-Construction and Black-owned Mobilize Design & Architecture to work on all three projects. About 30% to 40% of workers will be people of color, George said.
Investing in wellness
Two miles from George's factory, Calvin Littlejohn's Tri-Construction is gearing up to remodel and expand the Black Women's Wealth Alliance's (BWWA) business incubator on W. Broadway and N. Emerson Avenue.
Construction starts in September on the building that now houses 12 Black female-owned businesses in the retail, food, chiropractic, maternity, massage and wellness sectors.
When done, that $10 million expansion project will house, nurture and help expand 25 small businesses. The goal is to house and coach each sole proprietor so they grow to five employees and $400,000 in revenues in five years, said BWWA CEO Kenya McKnight-Ahad.
"These businesses can grow much faster than if left on their own," McKnight-Ahad said. "We want to create jobs for the local community and hire locally and we want to professionalize their operations and stabilize their revenue."
The entrepreneurs will be guided toward licenses and medical billing networks needed to command adequate rates, profitability and growth, said McKnight-Ahad, who bought the building in 2021. She is expanding it with help from the city, county, DEED, Sunrise Bank, and community lenders Local Initiatives Support Corp. (LISC) and NEON.
Coffee buzzing with inspiration
Other equity loans are launching new family-owned enterprises that feed and inspire children.
Uganda native Ian Oundo came to Minnesota at age 21 to study law, but always dreamed of owning a restaurant where he could showcase his mom and dad's recipes from home while also serving the community.
Oundo, a former DFL civic engagement director and current policy and outreach director at the African Growers and Producers Assoc., opened Rafiki Coffee & Cafe with his wife, Laura, and two of his six children in the Griggs building just off University Avenue in St. Paul.
On Monday, 70 guests jammed Rafiki — which means "a friend" in Swahili — to sample bold cups of joe, smoothies, African chai tea, plus African treats like sambusas, mandazi sweet pastry and chapati flat bread.
The venture, funded with savings and $10,000 from the Minneapolis-based African Development Center, means Oundo will soon hire as many as 10 workers, many of them local immigrants like him.
"It is important that my coffee shop look like the community," said Oundo, 39, who said it is also critical he give his workers health insurance.
"You have to not just pay people, you have to provide benefits. That supports families," he said.
'I really love Lake Street'
Olivia Rodriguez bought the building at 517 Lake St. for $620,000 in 2021 with grants from the Lake Street Council, Mortenson Family Foundation and the city. She will soon move her El Rey Car Audio business into the building from a rented space a block away in Plaza Mexico mall.
She just received another $15,000 grant from the Neighborhood Development Center in St. Paul. A $500,000 investment from Wells Fargo Bank funded Rodriguez's grants and is designed to help dozens of NDC clients spruce up storefronts along Lake Street.
Rodriguez is adding large, lighted signage to her building.
One of her tenants, Ecuador native Jose Chacaguasay also received an NDC grant to install an electronic sign and logo above his J&C Champions Barbershop, The signs will help customers, some of whom play for Minnesota United, find his business at night.
With the NDC's grant, Rodriguez hired Vamos Studios and Print & Buy Graphics, both nearby Latino-owned companies. They'll install signs for the barber shop and El Rey next week.
"I'm so excited. I really love Lake Street," said Rodriguez, who moved to Minnesota from Mexico. "After working here 15 years, I feel like this is my home. And after all the challenges with George Floyd and the riots, it's nice to [move forward]."
The two NDC grants are small but have "great impact." They ultimately helped four Latino-owned businesses, said NDC real estate developer manager Eduardo Barrera.
The ripple effect of the Lake Street storefront grants is meant to be intentional and was part of the grant application with Wells Fargo, Barrera said. "It spreads the work and the opportunity for those minority contractors to get work."
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