Project funding includes first assistance from city’s ‘Great Streets’ program
Though they might have been better off with snow shovels, supporters and partners involved in the relocation of Seward Co-op to the east end of Franklin Avenue hoisted gold-colored spades on Tuesday, Dec. 4 to ceremoniously break ground on the redevelopment project at the old Riverside Market property, 2823 E. Franklin Ave.
Snow fell on the assembled crowd as Seward Co-op’s General Manager Sean Doyle introduced and thanked the many partners involved in the $10.8 million project. Doyle stood between the small party tent and sand pile brought in for the ceremonial groundbreaking, the backdrop of which was the colorful and for some, controversial) mural of sanctioned graffiti art that graces the Franklin Avenue façade of the building, which has been vacant for two years.
Editor’s note: For the sake of full disclosure, it should be noted that Bridge Publisher Dan Nordley sits on the Seward Co-op Board of Directors, and that Bridge parent company Triangle Park Creative has contracted with the city to work on the branding of the Great Streets program.
Be it art or blight, the graffiti will soon become a thing of the past; Watson-Forsberg Construction will begin work on the site in January, with completion expected in the fall of 2008. Shega Foods, Inc., a bakery that makes injera Ethiopian flatbread), has signed a purchase agreement for the current Seward Co-op building at 2111 E. Franklin Ave. Shega currently resides at 2325 E. Franklin Ave.
According to a posting on the co-op’s website, Shega intends to divide the building in half and convert the front into a restaurant or retail space, to be rented to an as-yet undetermined tenant. Shega will use the back half for its expanded bakery operation and to sell a small selection of East African grocery items and baked goods.
The sale of the building will contribute to the funding of the project, which will be financed largely through a $5.2 million loan from Wells Fargo. Wells Fargo is also the tax credit investor on a New Markets Tax Credit allocation of $9.2 million, which Doyle said will generate $2.4 million of federal tax credit equity toward the project.
Other funding sources include the Northcountry Cooperative Development Fund loan $700,000), an environmental remediation grant from Hennepin County and the Metropolitan Council $271,000) and $1.2 million raised through the sale of equity shares to the co-op’s members.
All these funding resources still leave a gap that will be filled by $375,000 in funding from business assistance programs such as the City of Minneapolis’ “Great Streets” Neighborhood Business District program, of which the Seward Co-op development is the first official project. The city put up $150,000 for the project.
Mike Christenson, director of the city’s Community Planning and Economic Development department CPED) officially launched the Great Streets program at the groundbreaking.
In an interview the day after the groundbreaking, Kristin Guild, acting manager of business development for CPED, described Great Streets as a “multifaceted program, the primary focus of which is on providing support to neighborhood business districts throughout Minneapolis.” The program exists to help finance projects that may not otherwise find full funding — thus the “gap financing” provided to the Seward Co-op.
“These are good projects, but conventional funders don’t like a risk,” said Guild. “Urban neighborhood development is a lot tougher. Banks and equity investors are often only able to fund to the almost-there point, because of their lending criteria. Even with the private funders and their tremendous sales of equity shares, [the Seward Co-op] had a small gap in financing, and this is where the city financing came in.”
This isn’t the first program the city has established to aid neighborhood businesses; small business loans were utilized in the opening of Shabelle Grocery and Meat and Shega Bakery, 2325 E. Franklin Ave. The “Great Streets” program, however, is a change from similar programs in the past, Guild explained, in that it touts an expanded geographic scope and has a wider variety of financial programs available. The program offers business loans, real estate development gap financing and business district assistance such as façade improvement programs, market studies and retail recruitment efforts for commercial corridors such as Franklin Avenue and East lake Street, areas around LRT stations and neighborhood business nodes like the one anchored at Southeast 15th Street and Como Avenue.
“Great Streets is much broader, recognizing that there are many [business areas] that are struggling for a lot of different reasons, and many of these would benefit greatly from assistance,” said Guild. “We now offer a variety of strategies to support business districts under a single program.”
The program constitutes a re-branding of the city’s business development assistance efforts, part of a greater public/private network of partnerships and assistance outlets for neighborhood-level businesses. The city lists other partners and resources for similar assistance on the Great Streets website; Bridge-area organizations include the African Development Corporation, West Bank Community development Corporation, Lake Street Council, Neighborhood Revitalization program and Seward redesign.
Other Bridgeland sites targeted by the Great Streets program include the area surrounding the Cedar-Riverside light rail station, the stretch of Hennepin Ave. in the East Bank or Old St. Anthony) neighborhood, the business district at 15th Ave. & Como Ave. in the Southeast Como neighborhood, and the business node along University Ave. near Highway 280 in the Prospect Park neighborhood.
You can find much mor information about the program and other small-business assistance here.
Guild called the Seward Co-op project — the first official one under the Great Streets banner — “a tremendous amenity, a huge asset to that section of Franklin [Avenue]. The move is really a transformative project to reactivate the area.”
She said the Seward Co-op “goes beyond just a grocery store, though it is a great one. The new space will offer community cooking classes, nutritional education, education on cooperative structures, and more. This expansion is extending the educational element that Franklin Ave. has been developing through places such as the Northern Clay Center, Playwrights’ Center, and the Movement Arts Center.”
Speaking at the snowy event, Ward Two Council Member Cam Gordon also expressed excitement about the Great Streets program, and he said he is very supportive of the co-op expansion project because the community was supportive of, and invested in, the project. He recognized Seward Redesign and the Seward Neighborhood Group SNG) for their early work, through a neighborhood task force, to steer redevelopment of the site. He noted that the project will revive the blighted property, bring good quality food into the community through a community-owned co-op) and provide living-wage jobs to Minneapolis residents.
While many are applauding the co-op’s relocation to the less developed end of Seward’s Franklin Avenue, at least one Seward resident was not happy to hear the co-op will be moving. At an SNG-sponsored “speak out” event last summer, Theresa Nelson bemoaned the prospect of losing the co-op, which she said was a factor in her decision to purchase a home just three blocks from the already-active business node at 22nd and Franklin.