More than 25 top business, nonprofit and government officials hope to build a $2 billion fund to accelerate rebuilding of corridors damaged during the riots following George Floyd's death in 2020 and also address other inequities.
The idea is to use business and philanthropic donations, government funds and low-cost debt over 10 years to rebuild strategically and address inequities in housing and business funding.
"We're designing this with the people who are going to deploy the capital. We have to flex our 'belief muscle,''' said Tonya Allen, president of the McKnight Foundation and one of the leaders of the new effort, called the GroundBreak Coalition.
The private sector-led coalition, inspired by Allen, includes local and national financial firms, Minneapolis and St. Paul mayors Jacob Frey and Melvin Carter and other elected officials and foundations. They will launch a six-month process to build "investment pathways" at an all-day forum May 12 at Sabathani Community Center in south Minneapolis.
"This is an incredible opportunity to bring the power brokers to the same table to address the historical capital-funding gaps that have been long identified in the Twin Cities," said Erik Hansen, director of economic policy and development for Minneapolis.
There has been some rebuilding in the diverse commercial corridors that sustained an estimated $550 million in damage by rioters and arsonists following the murder of George Floyd in Minneapolis police custody in 2020. Allen and colleagues want to accelerate and expand the work.
Allen said the rebuilding effort is off to a good start along damaged commercial corridors, such as Lake Street, where nearly $200 million has been committed to rebuild what has been estimated at $300 million-plus in damage. That work provides the impetus to push on against well-documented gaps in housing, employment and entrepreneurship.
"I see this as a preemptive strike," she said, "along those corridors and beyond. If we do not act now, we all will carry it [indefinitely]."
GroundBreak will be "leveraging their institutional power and dedicating resources to create a shared strategy for racial, economic and climate justice," a statement from the group said. "We are galvanizing these commitments and holding ourselves accountable for meeting them."
Overall, the group wants to create homeownership paths for 45,000 people of color, affordable rental housing for 23,500 and 30 "climate-ready, transformational" commercial projects. It also wants to help launch more than 11,000 businesses owned by people of color.
The fund will help lenders, developers and community-based nonprofits work to fill gaps in the capital shortfall that has dogged minority homeownership and small-business developments.
"We've been chipping away at this mountain a little bit at a time," said Dorothy Bridges, a retired bank president and Federal Reserve Bank executive who sits on the board of U.S. Bancorp. "And we haven't gotten far enough. We're trying to aggregate and mobilize capital, patient capital. If we do it right, I'm sure it will be much more than $2 billion that comes to bear."
Bridges said she has had encouraging conversations with U.S. Bank officials and business leaders such as David Mortenson, CEO of Mortenson construction company, and David Reiling, CEO of Sunrise Bank.
"It will benefit everyone," Bridges said of GroundBreak. "And we will look at regulations and zoning. There are banking regulations that have outlived their relevance.''
The list of other "champions" of the effort include R.T. Rybak, former Minneapolis mayor and head of the Minneapolis Foundation; Steve Grove, commissioner of the Minnesota Department of Employment and Economic Development; Marcus Owens, executive director of the African American Leadership Forum; Tawanna Black, CEO of the Center for Economic Inclusion; and Rajiv Shah, president of the Rockefeller Foundation.
Business leaders include Tim Welsh, vice chair of U.S. Bancorp; Ken LaChance, senior vice president of Wells Fargo; Kate Kelly, regional president of PNC Bank; John Goldstein, head of sustainable finance at Goldman Sachs; CEO Chris Hilger of Securian Financial; and Jonathan Weinhagen, CEO of the Minneapolis Regional Chamber of Commerce.
Bridges said much of the work will likely funnel through community partners, such as Project for Pride in Living (PPL), which provides rental housing, employment training and financial counseling; Neighborhood Development Center, which provides entrepreneurship and business-management training in low-income neighborhoods; Habitat for Humanity, which helps modest-income families achieve home ownership; and WomenVenture, which both counsels and finances businesses.