Small Business Program Review Erik Hansen, Director of Economic Policy & Development January 7, 2020
Today’s presentation • Overview • Key Findings & Recommendations • Lending Programs • Great Streets Programs • B-TAP • Action Steps
Reviewed programs • Small business lending • 2% Loan • Alternative Financing • Homegrown • Health and Safety • Working Capital Guarantee • Great Streets • Façade Grant • Business District Support • Business Technical Assistance Program (B- TAP)
Minneapolis 2040 • Policy 8 – Public Safety Though Design Policy 34 – Cultural Districts • Policy 55 – Business Innovation & Expansion Existing • Policy 56 – Supporting Small Businesses • Policy 58 – Business Districts & Corridors Connection to • Policy 64 – Food Businesses Strategic & Racial Equity Action Plan (SREAP) City Policies • STRATEGIC NEED - Increase the number of Minneapolis-based businesses owned by Black, Indigenous, and People of Color (BIPOC); and increase businesses with BIPOC ownership that are still in business after 5 years.
1. What’s the objective? How’s it connected to City goals? Review 2. What’s working? 3. What’s not working? Questions 4. What’s missing in the portfolio? 5. What’s the racial equity intent and/or impact?
Partners • African Development Center- Nasibu Sareva, Hibo • Native American Community Development Abdi, Rich Thomasgard Institute- Robert Lilligren • African Economic Development Solutions- Gene • Neighborhood Development Center- Shahir Ahmed Gelgelu • New American Development Center- Asad Aliweyd • Bii Gii Wiin- Kit Fordham • Northeast Bank- Dusten Johnson • Downtown Council- Dan Collison • Northeast Minneapolis Chamber- Christine Levens • Hennepin Theater Trust- Joan Vorderbruggen • Northside Economic Opportunity Network- Warren • H mong American Partnership- Kim Facile, Chong, McLean, Stephen Obayuwana, Ann Fix Tee (Fouatee) Yang, Susan Pha • Powderhorn Park Neighborhood Association- • Lake Street Council- Allison Sharkey, Theresa Tabitha Montgomery Swaney • Seward Redesign- Renee Spillum, Shaina Brassard • Latino Economic Development Center- Henry • Southwest Business Association- Roger Worm Jimenez • Sunrise Bank- David Scott • Metropolitan Consortium of Community • West Bank Business Association- Jamie Schumacher Developers- Lee Hall, Mara O’Neil, Greg Gramza • West Broadway Business and Area Coalition- DeVon • Metropolitan Economic Development Association- Nolan, Felicia Perry Dan Holmquist, Uri Camarena, Verena Getahun
Staff Team • Becky Shaw , Sr. Economic • Lisa Passus , Project Development Specialist Coordinator • Emily Peterson , Business • Miles Mercer , Manager Training Coordinator Business Development • Erik Hansen , Director • Rebecca Parrell , Sr. Project Economic Policy & Coordinator • Zoe Thiel , Manager Small Development • Jim Terrell , Principal Project Business Team Coordinator • Judy Moses , Sr. Economic Development Specialist
Key Findings & Recommendations City of Minneapolis
• Connected to 2040 • Outcomes proportionally exceed Achieving BIPOC representation Results with • Success relies on City’s community - Room for based organization network Im Improvement • Incomplete Data • Remaining Questions
• Track demographics Refine & align • Encourage collaboration programs to • Implement communications & increases marketing plan • Increase direct services access outcomes • Continue barrier identification
Lending Programs City of Minneapolis
2% Loan Average Amounts, by race (2014-2018) Average of CPED Amount Average of Match Amount $47,964 People of Color Avg. (n=54) $223,541 $50,517 Hispanic (n=12) $112,067 $48,825 Asian/Pac. Islander (n=15) $445,854 $46,351 African-American (n=27) $149,578 $50,305 White (n=109) $403,729 • 2% Loan • Alternative Financing Loan programs • Home Grown • Health & Safety • Working Capital
Overall • Effective at financing physical capital • 2% is the most used program • Low default rate Lending • 40 partners – 5 doing majority of lending programs • Alternative Financing program drop off • Limited use of other loan tools provide BIP IPOC SREAP • 1/3 of borrowers are BIPOC businesses • Private loan match 80% higher for white access to borrowers • Unknown total borrower pipeline capital Need • Est - ½ deals would not occur without 2% • Working Capital access • Property acquisition, and vehicles
Great Streets Program City of Minneapolis
Façade BDS Great Streets Business District Support Funds Awarded by Type, 2019 Creating Marketplaces $143,723 Events $124,800 Business District Marketing $60,520 Business Engagement and Outreach $52,900 Organizational Development $43,200 Construction Mitigation $38,580 Business District Physical $32,500 Improvements Public Art and Placemaking $25,050 Individual Business Marketing $19,020
Overall • Provides tools for community-based organizations • Limited participant data • Gaps in community-based partner coverage Great Streets • Awareness, geography, & classification barriers Façade builds capacity • Steady Usage – 100/year • Private match varies for community • Restricted eligible uses organizations • Bidding, contract payment, & match barriers Business District Support • BDS helps build organizational capacity • Restrictions on repetitive use of funds • Difficult to evaluate direct impact to businesses
Business Technical Assistance Program (B-TAP) City of Minneapolis
B-TAP funds community-based organizations to provide business consulting services to support new business development, retention, and B-TAP (C (Core) growth. B-TAP allows the City to expand its capacity by contracting with local, non-profit, business development organizations that already have community organizing power, cultural competency and technical skills. B- TAP contracts are given annually Demographics of B-TAP Participants, 2018 B-TAP Participants (2018) Minneapolis Business Ownership (2012)* Minneapolis Population (2018)** 78% 64% 59% 19% 15% 14% 10% 10% 9% 6% 5% 4% 4% 3% 3% 1% 1% Native American Hispanic Asian / Pacific Black or African- White All other, two or Islander American (Inc. more races African Immigrant)
Overall • B-TAP only represents a portion of entrepreneurs receiving technical assistance from service providers • Top categories - food-based, retail, health care, personal services B-TAP • Client experience varies supports • CDBG funds limit eligibility SREAP BIPOC • 85% of the 400 entrepreneurs receiving services are BIPOC entrepreneurs • Data collection and outcome tracking system inconsistent Opportunities • Improve contracting requirements • Build awareness of program • Establish and track relationships
Action Steps City of Minneapolis
• Move B-TAP • Program modifications • Marketing campaign Next xt Steps • Data collection process • Role of external advisors • Periodic review timeline
Program Changes 2% Loan Great Streets B-TAP Other programs Increase eligible uses Align with 2020 budget & Review & refine contracting Maintain Alternative and Minneapolis 2040 Homegrown & continue Increase lending limits Develop Co-op evaluation Review program guidelines enhancements Assist in property & materials Discontinue Heath & Safety acquisition Develop Commercial Property Development Fund
Small Business Program Review Erik Hansen, Director of Economic Policy & Development January 7, 2020
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