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Why north Minneapolis struggles to attract businesses — and why that may be changing

Richard Copeland is moving his company, Thor Construction, to the north side in hopes that it will make a difference in the area’s economy — at a critical time for the city. 

Photo by Craig Bares
Impact Mailing employs 170 at its north Minneapolis headquarters in Camden, where it has been since 1993.

Richard Copeland does not run a nonprofit foundation trying to change the world. He leads Thor Construction, the largest minority-owned business in the state of Minnesota and one of the largest black-owned businesses in the country. Yet he wants to do something about north Minneapolis.

Copeland has seen his share of proposals and attempts over the years to boost the economy there, given it has long been Minneapolis’ poorest corner. But after years of seeing scant progress, he’s decided to take action by moving two of his companies — Thor and its sister company, Thor Sustainability — to north Minneapolis. (Another company, Copeland Truc-King, will remain in Fridley.)

Richard Copeland, founder of Thor Construction (center), with superintendent Leo Copeland (left) and CEO Ravi Norman (right) on site at U.S Bank Stadium.

“If we don’t step up and do something about it, we don’t think anybody else will,” says Copeland, who grew up in both north and south Minneapolis in the 1950s and ’60s. “Someone’s got to take this on, and it’s the private sector that’s going to make the difference. It’s got to be driven by economics.”

Copeland is still putting the details together and declined to identify the site where he will locate his businesses. But if all goes as planned, he could be open for business on the north side by the end of 2017. He’s planning to build from the ground up. “We’re pursuing a major development,” he says.

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The move marks the largest relocation of a company to north Minneapolis in recent memory. For 2015, Thor Construction had revenue of $151 million. Copeland estimates the companies moving to north Minneapolis employ about 150, but notes that about half his staff works on job sites rather than an office.

The relocation comes at a critically important time for Minneapolis and the state.

In November, Minneapolis police shot and killed Jamar Clark, a 24-year-old black resident of north Minneapolis. The shooting touched off weeks of protests over police use of force, and focused attention on the economic disparities between residents of north Minneapolis and the rest of the Twin Cities.

Copeland had his own connection to the controversy. “Jamar Clark worked for me. He worked for my trucking company,” he says. “There needs to be more opportunity in that community for employment. For our region to be great, we have to utilize all of our assets.”

He’s hoping that his planned move will become a catalyst for other business owners to follow. “We’re talking to maybe as many as 10 other substantial businesses that are coming along with us,” says Copeland, who says some of those could be part of the complex he’s planning to build. “We are going to change the dynamic of the north side of Minneapolis.”

The city’s toughest corner

The challenges facing north Minneapolis stretch back decades. The wide-ranging problems include housing, education, jobs, crime and racial disparities.

In the wake of the Jamar Clark protests, Gov. Mark Dayton raised the issue of a potential special session to address racial disparities. At a December ground breaking on West Broadway Avenue for a new state work force center, which offers assistance and training for job seekers, Dayton floated the suggestion of the state kicking in $15 million.

Tawanna Black (center) leads the Northside Funders Group.

Eight months earlier, nine of the 13 neighborhoods in north Minneapolis were designated a federal Promise Zone, a program launched under President Obama. According to a federal overview of the north side, the area suffers from “ alarmingly high unemployment, gun violence, housing blight and poor educational outcomes.”

The program’s goals include reducing racial inequities, creating jobs and increasing economic activity. Promise Zones are eligible for “priority access” to federal money to improve neighborhood conditions. But some would argue that north Minneapolis has no shortage of programs already in place.

Census community survey data from 2009 to 2013 shows the average 5-year unemployment rate for north Minneapolis at 17.8 percent, but 9.6 percent for Minneapolis as a whole. (Its methodology differs from other employment counts.) North Minneapolis is 70.4 percent people of color; 41.2 percent of its total population is black. For Minneapolis as a whole, 38.7 percent of residents are people of color and 17.2 percent are black.

A report prepared for funding coordinator Northside Funders in 2014 calculated the unemployment rate for blacks in north Minneapolis at 29 percent, compared to 11 percent for white residents in the same area. (In December the state’s unemployment rate was 3.5 percent.)

From one angle, north Minneapolis seems to offer some compelling attractions for business: It’s centrally located, close to downtown and has the cheapest real estate in the metro. But in a 2010 study from the Economic Policy Institute, Minneapolis had the largest employment gap between white and black residents of any U.S. major metropolitan area.

“The north side is an enigma,” says Dan Cain, president of RS Eden, an addiction treatment nonprofit headquartered on West Broadway. “There are people who come in and they want to gentrify the area or they want to attract big business in the area, and they very rarely [really understand] the work force that is there.”

Numerous local nonprofits and foundations have long histories of investing in north Minneapolis. But funders have been frustrated that the neighborhood’s biggest problems persist. Northside Funders Group began work in 2013 to better coordinate the $15 million to $20 million that local nonprofits invest annually in north Minneapolis, encouraging groups to co-invest in programs centered on shared, long-term goals.

“All the plans that are on the books — are those plans serving north side, or not?” asks Tawanna Black, its executive director. “I think we’d all agree we’re not making the most strategic decisions.”

Black says that one of the challenges in attracting new business is a lack of “ready and marketable sites.” In many cases, she says, developers or businesses don’t want to tackle buildings that are in tough shape: “The investment that they would have to make into that building doesn’t make sense,” making the path to profitability less clear.

The area between Interstate 94 and the Mississippi River is a busy corridor for business in north Minneapolis. But drawing investment west of the freeway has been more complicated.

“When you talk about attracting a business deeper into the north side … they’ve got to trust that the work force is there,” says Black. “I just think too many employers have only negative perceptions of the north side work force.”

“Right now there are 12,000 jobs in north Minneapolis: 1,100 are held by north siders,” she says, citing an analysis of U.S. Census data. Yet, she says, 20,000 north siders drive out of the neighborhood every day for jobs.

The city of Minneapolis has not had a mayor from north Minneapolis in more than 80 years, according to political scientist and Minneapolis history expert Tony Hill. The last north side mayor was William A. Anderson, who was elected to a two-year term in 1931. But Barb Johnson, president of the Minneapolis City Council, hails from that part of town.

Johnson says that one of the biggest challenges is that developers are wary of tackling projects on the north side because of worries about a low return on investment. “I can’t tell you how many developers I’ve driven around. The margins are razor-thin when you [develop] up there, and sometimes people aren’t willing to take that on.”

But she also acknowledges that the regular headlines about violence in the area don’t help draw new investment. “I will say public safety is an issue for businesses. There’s a lot of crazy criminal activity that impacts people’s perceptions of safety.”

But she adds that many longstanding north Minneapolis businesses are often overlooked: “We have really good businesses that are doing fine. [And] there’s been some significant investment along the riverfront.”

She also says that creating new programs isn’t necessarily the answer. “I really think it’s important that you support the things that have worked. There are some programs that have been relatively successful,” says Johnson, pointing to Summit Academy, a nonprofit educational and vocational training center. “It can’t just be funneling people into a program.”

Doing business in north Minneapolis

When Impact Mailing moved to its current site in the Camden area of north Minneapolis in 1993, the direct-mail company had about 30 employees. The vacant building at 46th Street and Lyndale Avenue North had been home to a jam and jelly company that had gone out of business. More than 20 years later, Impact Mailing remains: It has expanded twice and now employs about 170 people at its north Minneapolis office. (The company also employs another 30 at a facility in Winstead.)

“We’re centrally located,” says CFO Mark Anderson. He estimates that about 10 percent of his workers live in the neighborhoods near the Camden facility. During the recession, he says the company helped employees tap a city program to buy homes in the area.

Back in 2008, Impact needed to expand. Anderson said he looked within a 50-mile radius, but in the end, the company spent $7 million to expand in Camden.

“There was no TIF money or anything like that,” Anderson recalls of the decision to stay in the city. “The biggest factors were that we were here and had the space that we could expand; we owned the property adjacent to us.”

As for neighborhood issues, “in the last two years, I’ve had some big windows broken by some kids,” says Anderson, but he has no complaints: “Does anything ever happen? Yes, things do.”

Several well-known businesses also have a presence in north Minneapolis.

• St. Paul-based Kemps LLC has a large milk plant on West Broadway. “The business is very solid,” says Kemps spokeswoman Rachel Kyllo of the facility.

• Phoenix-based Republic Services Inc., one of the nation’s largest waste collectors, has one of its recycling plants in Camden.

• Minneapolis-based Hirshfield’s has both its headquarters and paint plant in separate locations in north Minneapolis; the Camden paint plant has been at the same location since 1982.

• Muscle Bound Bindery, a subsidiary of Minneapolis-based Lerner Publishing Group, does business out of a building it built on Plymouth Avenue in 1983. The bindery has about 45 employees and runs two shifts.

“For us this has been a good neighborhood for the most part,” says Mat Browne, vice president and general manager. “The nice thing is it’s on a bus line; very centrally located for customers, relatively easy to get to.”

Browne says the staff is a mix of people, including some who live nearby. The most serious problem? Sometimes people break into cars in the parking lot.

There are plenty of people in the neighborhood who are solid potential employees, he says. The challenge for the near north side, he adds, is that developers will be challenged finding a site where they can build. Unlike along West Broadway, “There probably isn’t a ton of space if somebody needs to build new. There’s a lot of housing up here.”

• The latest company to expand in north Minneapolis is backup power supplier DC Group, which completed a 2015 expansion of its headquarters on West River Road. President and CEO Jon Frank, who founded the company with his father in 1991, says that with the $8.7 million expansion the company has added about 45 jobs in north Minneapolis, where it now has 95 to 100 employees.

DC Group has been in the same location since 1991. Back then, Frank recalls, the neighborhood had a few more rough edges: It was a “run-down area.”

But it’s been rewarding to be part of the revitalization that’s taken place in that area along the river, he says. “We had an opportunity to move to different suburbs. We’re a nationwide company as well, so having the Minneapolis address is important for us. We employ a lot of people who take the bus and live around north Minneapolis, Northeast. We just like the area.”

Glimmers of optimism

Many of the vacant parcels along West Broadway, the primary commercial artery in north Minneapolis, are owned by Hennepin County or the city. But a veteran city staffer says that there’s something different in the air now: Minneapolis is seeing an uptick in inquiries about its north Minneapolis properties.

“We’re beginning to see the tide change,” says James Terrell, senior project coordinator in the business development division of the city’s Community Planning and Economic Development department. “We are seeing many more inquiries … in north Minneapolis and along West Broadway.”

When the city issued a request for proposals in 2013 for a vacant chunk of land it owns next to the Capri Theater along West Broadway, it got zero responses. Now, says Terrell, “we have some interest. We are excited about that intersection.”

Terrell says that the city would like to see a sit-down restaurant there. “It may be a little bit ambitious,” says Terrell. “We certainly would like to see commercial on the first floor.”

Terrell says that it’s no secret that it has been difficult to draw new investment to north Minneapolis: “I believe historically it has been a very tough sell,” he says. “We’re not naïve about the perceptions, but the reality is a little bit different.”

But Terrell says that there are new projects in the pipeline and plans for more. Current projects under way include the 103-unit Broadway Flats apartment project at West Broadway and Penn Avenue and the new state work force center, an $8 million project at 800 West Broadway. The Capri Theater has a capital campaign under way to expand. “People have an optimism about West Broadway,” he says.

There’s also something new on West Broadway: a business incubator, which opened in January. The small space (5,000 square feet) offers co-working space and caters to entrepreneurs trying to start a business. It’s operated by the nonprofit Northside Economic Opportunity Network (NEON).

Marcus Owens, president of NEON, is encouraged by the early response: “I think we’re kind of at a tipping point right now,” he says. “NEON itself is about economic development for the community here.”

St. Paul-based Wellington Management previously developed the Penn-Lowry Crossing retail center in north Minneapolis, where tenants include Aldi, Family Dollar and Subway, national retailers catering to consumers with limited disposable income.

Steve Wellington, president of Wellington Management, says that he’s hoping to unveil plans for another project on West Broadway later this year, but declined to provide details.

For his part, Thor’s Richard Copeland is envisioning something more expansive — a big-picture, ambitious vision driven by business, not politics.

Twin Cities Business

“We are also talking about building housing, we’re talking about building commercial space and we’re talking about building sustainable space,” he says. “We’re asking for supporters and partners in this effort, but we’ve got to take the lead. The African-American business community needs to lead that initiative. We need to train our community to be a world-class contributor to this economy.”

Burl Gilyard is TCB’s senior writer.

This article is reprinted in partnership with Twin Cities Business.