The American dream, while often envisioned with a white picket fence, for many people involves not ownership of homes but businesses.
Yet for many business owners, especially people of color, the dream of owning the property their business stands on remains distant.
In December, as part of a $1.5 billion city budget, the Minneapolis City Council and Mayor Jacob Frey allotted $2.7 million for a new commercial-property development fund aimed to help business owners, particularly those of color, purchase commercial properties. The fund would create no-interest loans that don't need to be repaid to the city until the property is resold.
Most of the money is targeted to revitalize several cultural districts within the city that have been identified as in need of investment. Minneapolis officials believe the city's commercial-property development fund is one of the first of its kind in the country that provides its type of commercial loans focused on areas of concentrated poverty where half or more of the residents are people of color.
"Entrepreneurs, especially those of color, have faced extraordinary barriers like access to capital in owning and opening a business," Frey said, in an interview. "What this fund will be aimed directly at is helping bridge that persistent gap."
On Tuesday, the city's Economic Development and Regulatory Services Committee is expected to review program guidelines which the full City Council will later adopt.
About $2 million of the funds are earmarked for entrepreneurs with businesses within cultural districts which includes areas like Cedar-Riverside, E. Lake Street and W. Broadway Avenue, where less than 1 in 5 business owners own their spaces and about 22% of commercial spaces sit vacant. The rest of the fund is reserved for "areas outside of cultural districts but within economically challenged areas," according to the budget outline.
For people of color, it can be hard to find the capital from traditional financial institutions needed to purchase a business property.
"Black, indigenous and people of color communities continue to face the same or similar historic barriers in the financial market as they previously experienced," said Shauen Pearce, the city's economic development and inclusion policy director.
There is hope the fund will help further spur generational wealth within communities of color, Frey said. More ownership can also help prevent business displacement.
"We have far too often seen the same dynamic: communities of color contribute great sweat and financial equity in making neighborhoods wonderful, then due to their hard work, values go up, rent goes through the roof, and they get displaced from some of the neighborhoods that their businesses made wonderful," Frey said.
An example of a property the fund could help finance would be the century-old building at 927 W. Broadway. The city awarded entrepreneur Chris Webley, the Phillips Family Foundation and TRI Construction development rights for the property and construction is tentatively expected to begin in June on the estimated $5 million redevelopment.
Webley, who is black and chief executive of co-working and event venue New Rules, said he was interested in applying for the fund.
"You are building wealth for yourself and the community … and building spaces that are nice, equitable and affordable," Webley said of entrepreneurs owning commercial space. "Having the funds with the commercial property development fund and other mechanisms like that allows for some flexibility and mobility for developers."
It's estimated the commercial property development fund could finance two to four real estate projects to start. The one-time city seed money for the program is anticipated to be supported by further investments from public, private and philanthropic organizations, though none have been announced yet.