An investment fund created by Pillsbury United Communities last week spent about $900,000 to acquire a burned-out auto parts store and an adjacent site in north Minneapolis for redevelopment.
The deal marked the first purchase by the Justice Built Communities initiative, a coalition of private funders and advisors assembled by Pillsbury United aimed at helping Black entrepreneurs. The initiative so far raised about $6 million for a fund intended to be at least $20 million.
"We've hired a commercial real estate person, who is using advisors from Opus, United Properties, architects, the banking community and others," said Pillsbury United CEO Adair Mosley. "We are developing an acquisition and predevelopment equity fund of $20 million to $25 million that, hopefully, will spur hundreds of million of dollars of economic development on West Broadway, Plymouth Avenue and elsewhere in north Minneapolis."
It's the latest of several private funds announced in recent weeks that are committed to redeveloping parts of Minneapolis and St. Paul damaged in vandalism, looting and arson after protests over the police slaying of George Floyd one year ago.
The overall damage in the two cities is estimated to exceed $500 million. To date, insurance claims total about $300 million. The private funds that emerged recently are collectively promising about $80 million in help.
"The need is great and there is a lot of anxiety among property owners and small businesses already hit by the pandemic not being able to come back," said Erik Hansen, the Minneapolis economic development director. "It seems like the private money is starting to come now, and that's fantastic."
The other private funds include those being raised by Twin Cities Local Initiatives Support Corp. (LISC), the Minneapolis Foundation and the Lake Street Council. The city also has an $8 million commercial property redevelopment fund.
Hansen said Minneapolis also expects about $90 million within weeks in pandemic-relief funds, some of which will help fill funding gaps for rebuilding structures and support local small businesses. He mentioned four such transactions closing soon on West Broadway in north Minneapolis.
Mosley said the North Side commercial work by the Justice Built Communities initiative will be done in consultation with local residents and businesses.
"We are moving with a sense of urgency even though it is also generational work and it will be a long haul," said Mosley, also a North Side resident. "There are families who have made it their business to make north Minneapolis work. That good behavior will start to change the context of the community. And we will help build a stronger small-business community."
Pillsbury United focuses on community health, family stabilization, education, and economic mobility in low-income neighborhoods throughout the city.
"We envision thriving commercial nodes anchored by local businesses and green spaces, safe and stable neighborhoods, and meaningful work and wealth-building opportunities that close racial disparities," Mosley said.