As Minnesota policymakers determine the state’s direction for the next two years they’d be wise to revisit Burl Gilyard’s story, “New report touts importance of immigrants to Minnesota’s economy.” Based on a report from the Minnesota Chamber of Commerce Foundation, one fact in the report should send chills down the spine of every Minnesotan.
Our state ranks 49th in entrepreneurship and small-business startups.
Small business creates thousands of jobs across the state. Recent support from legislators is welcome, but unfortunately, it’s not nearly enough to move the economy forward in a sustainable way.
The chamber foundation’s report lays out three strategies to ensure a better future: build on strengths, leverage Minnesotans and strengthen communities. That’s the work Neighborhood Development Center and other organizations like it do day in and day out. We’ve learned what does — and doesn’t — produce long-term economic results.
NDC’s model has transformed once-blighted communities for nearly 30 years. We invest long term in daring, driven local entrepreneurs. Studies by Wilder Research show this approach works. Small businesses launched with this support generate $28 in the local economy for $1 invested. This approach also:
- Created 437 existing businesses providing 3,250 jobs
- Pays $10.6 million to the state in sales and income taxes
- Adds 45 more businesses and 300 jobs each year
About 86% of entrepreneurs who use NDC services are Black, Indigenous, or people of color; 96% are low income when they start out. Partner organizations such as Mni Sota Fund and Latino Economic Development Center deliver similar programs, fine-tuned to serve specific ethnic communities. NDC’s model for success — including teaching business classes in several languages — is now used in St. Cloud, Brainerd, the Lower Sioux Indian Community, Duluth and in nine other cities across the country.
Refresh distressed property statewide for startups
Whether on Main Street in Crookston or Lake Street in Minneapolis, distressed properties signal lost businesses, jobs, tax base and more. Refreshing these empty, underused commercial spaces would bring opportunity and hope to communities across our state.
Yet the high cost to rebuild or renovate these spaces make them unaffordable for startups. Rents can triple just to cover the cost of construction and increased property tax value. While community-based developers such as Lake Street Council fund local redevelopment, they can’t do it alone. The numbers simply can’t work without major financial support.
Thanks to the COVID relief funds, the state, counties and cities now have the money to help communities. It’s time to clean up these properties and open them to entrepreneurs statewide. A coordinated program would ensure the money is spent wisely to:
- Provide financial support to experienced community-based developers who specialize in affordable commercial spaces for small, local entrepreneurs.
- Offer gap funding to allow the spaces to remain affordable long-term.
- Ensure entrepreneur support starts early and is ongoing. That support must include relevant and available training, financing and technical assistance.
In addition, both the Minnesota House and Senate jobs bills increase funding for existing small business loans and technical assistance. Successful leaders are ready to work with the Minnesota Department of Employment and Economic Development to increase the number of nonprofit partners with the experience, track record, cultural knowledge, trust and networks needed to reach serious community entrepreneurs.
Proven, community-led efforts show the way through recovery
The support entrepreneurs and small businesses receive this year will determine whether they can stay open, recover lost jobs and continue to pay taxes. In many communities, the ripple effect from these businesses goes well beyond their front door. They are a source of pride, a place to gather, and generate wealth for business owners, their families and communities.
Local entrepreneurs launch businesses of all kinds. They are makers of salsas, sauces and cheesecakes. They are businesses that clean commercial buildings, provide transportation, sell discount clothing, repair vehicles and fix plumbing. They’ve opened salons, ice cream shops and some of the best restaurants in Minnesota.
As the 2030 report observed, entrepreneurship lags in Minnesota, especially for people of color. It’s time Gov. Tim Walz and legislators make an investment that delivers long-term opportunity for all Minnesotans.
Mihailo (Mike) Temali is the CEO and founder of Neighborhood Development Center in St. Paul. Renay Dossman is the organization’s president.
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