In an effort to help minority businesses in Minnesota expand and hire workers, the U.S. Commerce Department officially opened a Minority Business Development Agency, or MBDA, in Minneapolis on Tuesday.
The agency will be run by the Metropolitan Economic Development Association (MEDA) under a five-year contract that is expected to net minority-owned firms here $30 million in annual contracts and capital and hundreds of jobs.
MEDA will counsel minority businesses so they grow, tap more overseas markets and create 60 new jobs per year here, while retaining another 60 jobs each year, said Yvonne Cheung Ho, MEDA's chief executive and president. Businesses are only eligible for assistance at the new center if they already have more than $1 million in revenue, she said.
Ho named longtime MEDA executive Jim Faricy to head the new minority business development center, which is the 49th such office nationwide and the only one in Minnesota. The state has between 50 to 100 minority-owned companies with more than $1 million in revenue that should be able to use the new center, Faricy said. The goal is to help these businesses obtain more than $21 million in annual contracts and more than $9 million a year in capital that may come in the form of loans, equity investments or bond funds, Faricy said.
For its efforts, MEDA will receive $1.125 million over five years, provided it meets the Commerce Department's contract and employment goals.
U.S. Rep. Keith Ellison, D-Minn., and David Hinson, MBDA national director, flew in for Tuesday's ribbon-cutting ceremony. About 100 business owners, bankers, and officials from the Small Business Administration, U.S. Department of Human Rights, Midwest Minority Supplier Development Council, Milestone Growth Fund and other champions of economic development also were on hand.
The Obama administration is increasing the number of Minority Business Development offices across the country. Over three years, they have created 15,000 jobs and helped minority-owned firms secure more than $10 billion in contracts, loans and other forms of capital.
"I am excited to be here and to welcome you to the family," Hinson told the crowd. With the new MBDA center in Minneapolis, "we will help reduce the wealth gap between minority families and non-minority families and ... help small business grow in size and scale with on-the-ground support."
Hinson told the Star Tribune that the Obama administration is aware that Minnesota has the second-highest black unemployment rate in the nation. The new office should help reduce that.
"There is no question [that] African-American businesses are going to be the driver of employment opportunities for African-American citizens. And so we need more African-American business owners that have the size and scale to hire," Hinson said. "This center is designed to help contribute directly to those businesses growing" and hiring.
Of the $4 billion in national contracts and capital MBDA helped minority firms secure last year "half of it went to African-American-owned businesses," Hinson said.
Ho noted that the federal agency's goals are aggressive, but said her own agency, MEDA, already consults with small minority firms on accounting and financing and helps them make key contacts. MEDA currently has a $1.2 million loan fund and last month received $500,000 in new small-business lending funds from the U.S. Treasury.
Tuesday's newest recognition marked another "important investment" for MEDA and the minority-owned small businesses it serves, Ellison said.
Cindy Ohlenkamp, assistant vice president of Franklin Bank, called the new center a "wonderful commitment" that should benefit MEDA's clients in the long term.
Dennis Kim, president of the Eden Prairie-based engineering and surveying firm EVS, said he's calling the MBDA office first thing Wednesday to discuss how he might win U.S. wind and solar contracts in Brazil.
"I have been pursuing these federal projects for a long, long time. ... But because of our location, we are far away from D.C. where all the action is happening," Kim said. "Now ... I hope they will help us make connections with the proper people out there in Washington, D.C. I am really very excited."
Dee DePass • 612-673-7725