The COVID-19 pandemic has had a disastrous effect on our communities’ small businesses due to complications from shutdowns, labor shortages, and supply chain issues. However, within the small business sector, cooperatives and other democratically owned businesses are emerging as economic survivors. The shared ownership model has allowed businesses to pivot and be resilient during turbulent economic times and is now a rapidly growing segment of our economy.
Member-owned cooperatives have existed for more than a century. However, their unique contributions to economic opportunity, community vitality, and worker sustainability are bringing renewed energy and attention to the value this model brings to our communities.
One organization driving the momentum of the shared ownership model is Metropolitan Consortium of Community Developers (MCCD), a Minneapolis nonprofit dedicated to expanding the wealth and resources of neighborhoods through housing and economic development.
MCCD believes cooperatives are an essential part of community wealth building and understands that securing funding can be challenging. As a solution, MCCD has announced the launch of their game changing Shared Ownership Fund. This program will activate flexible, low-cost capital to support the growth of cooperatives and other democratically owned businesses and real estate endeavors. The Fund aims to create wealth building opportunities, prevent displacement and business closures, and ensure community control of assets in BIPOC and low- wealth neighborhoods across the Twin Cities.
The first project to benefit from MCCD’s Shared Ownership Fund leverages a three-way partnership between Partnership in Property Commercial Land Trust (PIPCLT–formerly known as the Commercial Land Trust Initiative), Northside Investment Cooperative Enterprise (NICE MN) and Land Bank Twin Cities.
The partnership has developed a multi-layered ownership strategy on a bundle of four properties at 35th and Penn Ave N. in the Cleveland Neighborhood. The properties are at 90 percent occupancy by long-time BIPOC business owners who were at risk of displacement when the landowner was preparing to sell. NICE MN and PIPCLT were able to act quickly with the help of the Land Bank Twin Cities to gain site control. These businesses have become staples in the community providing needed services. For example, Miranda’s Hair has been a 20-year business on Penn and a tenant at the Penn and 35th location for over 15 years.
“As stewards of capital, MCCD believes that a robust and equitable economy exists when multiple forms of ownership are supported, and where relationships rather than transactions are the common currency. In our role as a CDFI, it is important to rethink how we structure and activate capital in a way that best positions community for success. This project gives us an opportunity to do that. The shared ownership strategies being used for the 35th and Penn project demonstrate how cooperation can bring about lasting solutions that center BIPOC communities,” said Elena Gaarder, CEO at MCCD.
The loan provided by MCCD supports the organization’s core mission of access to opportunity and wealth-building through business ownership. Investing in the project highlights the rich assets of North Minneapolis and elevates the power of community. For years, the rent increases have placed an undue burden on the business owners. The acquisition and NICE’s eventual ownership will ensure local businesses can stay in these properties at an affordable rate of rent and give local business owners the opportunity to be part of a cooperative that has ownership in the building they operate from.
“Partnership in Property Commercial Land Trust is honored to receive the first loan out of MCCD’s Shared Ownership Fund. This is another piece of the puzzle that is making the 35th and Penn Ave N project possible. We want this to serve as an example of what collective ownership models can accomplish for our communities. Together we can work to transfer ownership of assets to more BIPOC individuals and communities, practice shared decision making and build community wealth,” said Domonique Jones-Executive Director at PIPCLT.