Minnesota, never short on innovation, might be on the brink of its latest grassroots success story. The Northeast Investment Cooperative (NEIC) signed a purchase agreement this week for its first property, a building at the Lowry/Central intersection in northeast Minneapolis. NEIC is the first commercial-property investment cooperative in the country, though others are watching closely to see how NEIC does.
NEIC’s goal is for members (currently over 80 strong) to come together to make transformative change in their community, both by the buildings they purchase and the tenants they support. This first project is an ugly neglected building that will soon become a community asset. Thriving local business Recovery Bike Shop will purchase half of the new property from NEIC and move into it. Other tenants are being sought for the rest of the space.
Northeast Minneapolis is an excellent testing ground for this venture, especially given Minnesota’s co-op-friendly regulations. Much of this community has experienced a great revival as of late, but that hasn’t extended to Central Avenue. The “main street” of Northeast has seen decades of disinvestment. Absentee landlords, a car-heavy culture, and tough economy have taken their toll. Among the vacant and worn properties, though, there are several successful businesses eager for more good neighbors.
This middle ground has left Central Avenue unattractive to many private developers, but not distressed enough to attract nonprofit investment. A co-op just might fit the bill by providing local investment and keeping eventual profits in the neighborhood. Many members have said that NEIC is the perfect answer to their long-term desire to invest more in their community.
NEIC hopes to fund the building purchase and improvements with $300,000 in member investments, which it has 90 days to raise. City-backed loans are also available to help with the rehab. The total project could pour over one-half million dollars into the neighborhood. By using as little bank financing as possible, NEIC can keep tenants’ rental costs more reasonable and give member-owners a better return on their investment. All Minnesota residents are eligible to join as members of this promising venture.