NDC Annual Report 2007 by Neighborhood Development Center

NEIGHBORHOOD

DEVELOPMENT CENTER

Empowered Entrepreneurs. Inspired Neighborhoods.

A N N U A L

R E P O R T

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O UTheRNeighborhood M I Development S S I OCenterN(NDC) is a community-based non-proďŹ t organization that works in the low-income communities of St. Paul, Minneapolis, surrounding suburbs and Greater Minnesota to help emerging entrepreneurs develop successful businesses that serve their community, and to help community groups build a stronger neighborhood economy. 1

TRANSFORMING NEIGHBORHOODS THROUGH OPPORTUNITY. Because of our unique collaboration with Neighborhood Partners (existing community organizations within the neighborhoods and among the people served by NDC), we are able to provide entrepreneurs with the opportunity to receive the business training, ďŹ nancial assistance and on-going support crucial Mihailo Temali, NDC Executive Director

to the success of their businesses.

That success translates into the creation of jobs and the generation of revenue for low-income communities. Such social and economic impacts serve as a catalyst for turning disinvested and deteriorated neighborhoods into ones that are devoted and determined, like the ones highlighted in this Annual Report. Kate Barr, NDC Board President

We give our sincerest thanks and are truly grateful for the tireless commitment and steadfast support of our exuberant board of directors; talented staff, trainers and consultants; generous funders; and trusted Neighborhood Partners. We also thank every entrepreneur whom we have had the honor to serve. We thank you all for helping us help small businesses succeed and neighborhoods to thrive.

Tony Genia, Former NDC Board President 2

OUR VISION The philosophy is simple: Work with Neighborhood Partners to offer NDC services to entrepreneurs through a process controlled by each individual community. There is no cookie-cutter approach to the services NDC provides. Each entrepreneur, every business and all neighborhoods have a different set of challenges.

The reward is priceless: Foster leadership and inspiration from within each neighborhood to generate maximum impact on community development. NDC believes every community has a wealth of business talent and ideas, which if given the opportunity to be fully developed provide jobs and income that galvanize community leaders and strengthen the local economy.

The approach is dynamic: Develop and implement innovative programs that empower entrepreneurs to start Photo by Bob Prezel of Perzel Photography Group

and/or grow businesses within their community. Building upon the network, knowledge and trust already established by Neighborhood Partners, NDC is able to connect with inner-city business owners and organizations to provide on-going services and resources in ďŹ ve program areas: Training, Financing, Business Support, Incubation and Capacity Building.

PROGRAM AREAS Micro-Entrepreneur Training

Small Business Financing

On-going Business Support

Incubation/Space Development

Capacity Building

In addition to English-speak-

NDC’s unique funding resource

Their are two satellite business

NDC and neighborhood

NDC works with Neighborhood

ing individuals, NDC provides

ﬁlls a gap in the Twin Cities

resource centers available to

organizations collaborate to

Partners to enhance their

specialized training to Hmong,

ﬁnance market by providing

entrepreneurs. NDC provides

reclaim and rehab commercial

capacity to create and

Latino, Somali and East African

access to credit for start-up

on-going support in market-

properties within targeted inner

conduct economic development

entrepreneurs in their native

businesses (and other

ing, merchandising, ﬁnancial

city neighborhoods. The

initiatives within their own

languages. This 16-week

entrepreneurs) who are unable

record-keeping, credit repair,

properties then operate as

communities.

course covers the fundamentals

to access traditional sources

retail management, legal as-

Incubators, providing a network

25 neighborhood partners

and techniques of marketing,

of capital. NDC created the

sistance and more.

of support and resources

operations, ﬁnancial

nation’s ﬁrst Reba-Free

2,945 hours (229 alumni)

for small businesses.

management and writing

ﬁnancing program to meet the

a solid business plan.

needs of the large Somali

283 entrepreneurs trained

immigrant community. 39 loans totaling $611,455

Frogtown Entrepreneur Center Mercado Central Midtown Global Market Plaza Latina Plaza Verde Swedish Bank Building

CENTRAL, PHILLIPS & POWDERHORN

NEIGHBORHOODS These neighborhoods, rich in diversity, have for many years struggled with poverty, vacant homes and empty commercial buildings. The once vibrant Sears building, located at Chicago Avenue and Lake Street, stood abandoned for 15 years before it was reclaimed. NDC along with three Neighborhood Partners: the African Development Center, the Latino Economic Development Center and the Powderhorn Phillips Cultural Wellness Center, purchased and redeveloped the property. Although the four groups equally own and govern what is now known as the Midtown Global Market, NDC was the lead developer on the project and has managed the site since it opened. The Midtown Global Market opened in May of 2006. It is a mixed-used development with ofﬁce space, a hotel, housing and a variety of small businesses. Approximately 90 percent of those small business owners in operation are NDC alumni.

NDC HISTORIC MEASURES OF SUCCESS* Photo by Bob Prezel of Perzel Photography Group

Training

1,165

Alumni Businesses

167

Visible On Lake Street Alumni of Color Jobs Created Dollars to Neighborhood

112 138 666 $10,341,695

*Estimates based on Wilder Research 2007 NDC Outcomes Evaluation. NDC internal estimates of alumni in business and subsequent impact are signiﬁcantly higher due to broader deﬁnitions.

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LOIS FIELDS, SPECIALTY GIFTS AND MORE In 2005, Fields got the idea to turn her hobby of making gift baskets for friends and relatives into a viable business. She quickly realized that in order to do that

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she needed a business plan, so she signed up for the NDC Micro-entrepreneur

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training classes.

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Nearly one year, three employees and one volunteer later Fields is living her

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dream. As owner of Specialty Gifts and More, located inside the Midtown Global

“NDC is truly a community-connected

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Market, Fields offers an array of unique gift ideas, plants and cut ﬂowers that

organization, and they gave me the encouragement, resources and support to do something that beneﬁts the community.” —Lois Fields 6

HAWTHORNE, JORDAN & NEAR NORTH

NEIGHBORHOODS Although it has been compromised by crime, shabby storefronts and an overall poor image, West Broadway is the most signiﬁcant commercial and cultural corridor in North Minneapolis. For more than 10 years, NDC has partnered with the Northside Residents Redevelopment Council (NRRC) to offer micro-entrepreneur training classes in this community. That partnership was instrumental in the creation of the Neighborhood Economic Opportunity Network (NEON), a collaboration of approximately eight Neighborhood Partners, which focuses more specifically on business development and growth for West Broadway. In 2007, NEON hosted seven micro-entrepreneur training classes for 70 individuals. By 2010 NEON, in partnership with NDC, expects to train more than 200 entrepreneurs and spur the creation of 60 new businesses.

NDC HISTORIC MEASURES OF SUCCESS*

Training

456

Alumni Businesses

Visible On West Broadway Alumni of Color Jobs Created Dollars to Neighborhood

8 47 207 $3,208,036

*Estimates based on Wilder Research 2007 NDC Outcomes Evaluation. NDC internal estimates of alumni in business and subsequent impact are signiﬁcantly higher due to broader deﬁnitions.

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GROVER JONES, NEON

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The goal of NEON is to provide micro-entrepreneur training and technical assistance to existing businesses and aspiring entrepreneurs. The long-sited purpose is that these entrepreneurs will eventually populate West Broadway, becoming a key partner in the capacity building efforts to revitalize this troubled corridor.

According to Grover Jones, Executive Director of NEON, the biggest challenge is economic. Entrepreneurs are ﬁnding it increasingly difﬁcult to get loans underwritten through traditional sources because of poor credit, no capital and

“As one of the most under-served

no collateral. That is why organizations like NDC are pivotal; because of the

communities, the capital has not been

ability to develop creative ways to ﬁnance new business owners.

available...getting more money [businesses] on the street will ultimately revitalize North Minneapolis.” —Grover Jones 8

Daytons PAYNE-PHALEN & DAYTON’S BLUFF

NEIGHBORHOODS This area thrived until about twenty years ago when there was a major disinvestment due to aging homes, crime and factory closings. Its saving grace has been its people; both new and long-term residents. The Swedish Bank Building, located on Payne Avenue, was renovated by NDC and is co-owned with the East Side Neighborhood Development Company (ESNDC), a non-proﬁt organization with a mission to create wealth and well-being in a thriving and engaged multi-cultural neighborhood.

Although the Eastside Financial Center was created to meet the ﬁnancial needs of all East Side residents, special attention is given to under-served individuals. The third ﬂoor operates as a business development center managed by NDC and the Cultural Wellness Center.

NDC HISTORIC MEASURES OF SUCCESS*

Training

617

Alumni Businesses

Visible On Payne Avenue Alumni of Color Jobs Created Dollars to Neighborhood

13 47 250 $3,883,412

*Estimates based on Wilder Research 2007 NDC Outcomes Evaluation. NDC internal estimates of alumni in business and subsequent impact are signiﬁcantly higher due to broader deﬁnitions.

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JOSE PAYAN LAPERLA TORTILLERIA

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Jose Payan started his tortilla factory almost 9 years ago as a family operated business. Today LaPerla Tortilleria has 52 employees and three locations: Payne Avenue, Mercado Central and South Minneapolis. The bulk of his business is packaging and selling tortillas to local restaurants and grocery stores; however each location is also open to the public.

LaPerla’s product line includes corn and ﬂour tortillas in a variety of sizes all made fresh, start to ﬁnish, on site. This includes cooking and grinding its own corn, mixing ingredients, frying tostadas and tortilla chips, and

“NDC helped me know exactly what I

producing and packaging the product for shipment.

need to know to run a business...how to do taxes, payroll and how to write a good business plan.” —Jose Payan

Frogtown FROGTOWN SUMMIT-UNIVERSITY

NEIGHBORHOODS Known historically as Frogtown and ofﬁcially as Thomas Dale, this neighborhood is home to a large refugee and immigrant population; Southeast Asian, East African and Latino. University Avenue, the primary commercial corridor, has weathered a storied past of prostitution, pornography, drugs and crime.

But, by the early 1990s, residents community organizations and local businesses had begun to reclaim this diverse, working middle class neighborhood. Part of the on-going revitalization will include the Frogtown Crossing, a collaborative effort among multiple development partners, which will occupy the northeast corner of University and Dale. Frogtown Crossing will include a mix of housing, retail, food and entertainment. NDC has taken the lead in developing the approximately 12,000 square feet of street-level, commercial space earmarked for businesses that serve the needs of this growing neighborhood.

NDC HISTORIC MEASURES OF SUCCESS*

Training

679

Alumni Businesses

Visible On University Avenue Alumni of Color Jobs Created Dollars to Neighborhood

29 59 307 $4,769,843

*Estimates based on Wilder Research 2007 NDC Outcomes Evaluation. NDC internal estimates of alumni in business and subsequent impact are signiﬁcantly higher due to broader deﬁnitions.

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SHOUA THAO, SHOUA’S CLOTHING SHOP ��

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Shoua Thao and her husband Jouye Moua came to Minnesota from Thailand by way of Appleton, Wisconsin in 1986 and have operated Shoua’s Clothing Shop on University since 1995. They specialize in custom women’s clothing (dresses for weddings, proms and other special occasions) and men’s tailored suits.

Thao designs each dress herself, and then sends that unique design to Thailand for mass production. The garment is then shipped back to the store and alterations are offered in-house. Although the store is

“We’ve seen a lot of changes since we’ve been here, and we are happy

open to the general public, the largest client base is Hmong men and women and African-American women.

to see more businesses returning to Univerisity Avenue.” —Shoua Thao

BALANCE SHEET Assets Cash and Cash Equivalents Restricted Cash Total Cash and Cash Equivalents

Liabilities and Net Assets 351,732 849,902 1,201,634

Cash - Replacement Reserve Contribution Receivable Other Receivables Loan Receivable Prepaid Expenses Rental Properties, Net Property and Equipment, Net Financing, Fees, Net Investment in Other Companies Notes Receivable - BLNMIF, LLC Other Assets

6,900 870,000 1,702,391 1,673,783 61,040 6,136,132 13,893,921 354,383 2,500 1,861,398 238

Total Assets

27,764,317

Included: Neighborhood Development Center; Frogtown Entrepreneur Center; NDC REDI I, LLC; NDC REDI II, LLC; Mercado Vista, LLC; and MGM Community Partners, LLC Numbers are rounded to nearest dollar. Sources: Unaudited Financial Statements

F S

Financial Support

Liabilities: Accounts Payable Accrued Expenses Tenant Security Deposit Undisbursed Loan Funds Loans Payable

270,889 1,015,704 26,904 186,363 16,486,445

Total Liabilities

17,986,306

Non-Controlling Interest

874,075

Net Assets: Board Designated Other Unrestricted Temporary Restricted

6,292,260 963,498 1,648,178

Total Net Assets

8,903,936

Total Liabilities and Net Assets

27,764,317

FINANCIAL NEIGHBORHOOD SUPPORT PARTNERS Corporate and Foundation Allianz Life Allstate Foundation Ameriprise Financial Bremer Foundation Ford Foundation* Fredrikson & Byron, P.A. General Mills Foundation George Family Foundation* Grotto Foundation* Heron Foundation Knight Foundation Mann Foundation,* Ted and Roberta McKnight Foundation* McNeely Foundation Minneapolis Foundation Northway Community Trust O’Shaughnessy Foundation Payne Lake Community Partners* Perlman Foundation,* Lawrence and Linda Pohlad/United Properties* Ryan Companies* Securian Foundation St. Paul/Bigelow Foundations St. Paul Travelers*

Neighborhood Partners Sysco Corporation* Twin Cities Metro Certiﬁed Development Corporation Greater Twin Cities United Way Urban America* US Bancorp Foundation Wells Fargo Foundation* Western Bank Xcel Energy

Government

City of Minneapolis* City of Saint Paul Community Development Financial Institution Minnesota Department of Employment & Economic Development Minneapolis Empowerment Zone* Minneapolis Public Library Ofﬁce of Refugee Resettlement

Indivuduals Ed Padilla William Sands*

*Support provided for Midtown Global Market

Aurora/St. Anthony Neighborhood Development Corporation African Development Center American Indian Economic Development Fund Chicanos Latinos Unidos En Servicio Dayton’s Bluff Community Council East Side Neighborhood Development Company Emerge Community Development Friendship Community Services, Inc. Greater Frogtown Community Development Corporation Hennepin County Library Hmong American Partnership Hope Community, Inc. In the Heart of the Beast Theatre Latino Economic Development Center Minneapolis Consortium of Community Developers Model Cities of St. Paul Neighborhood Economic Opportunity Network Northside Residents Redevelopment Council Oromo Community of Minnesota Powderhorn/Phillips Cultural Wellness Center Riverview Economic Development Association Rondo Community Outreach Library Selby Area Community Development Corp. Seward Redesign, Inc. Sparc

Staff

Ayan Abdi, Training Program Coordinator Daniel Birru, Accountant Patricia Brown, MGM Market Director Cecil Camara, Senior Accountant Juliana Diamond, MGM Ofﬁce Manager Elizabeth George, Mercado Market Manager

Staff (Con’t)

Richard Hofacre, Facilities Maintenance Manager Harvey Hoffman, Building Operations Manager Mike LaFave, Real Estate Development Director Earlsworth Letang, Deputy Manager Allison Maciejewski, Technology Coordinator Bonita Martin, Training Program Director Maria (Tony) Mata, BCC Program Director Perla Mayo, Loan Officer Kathy Moriarty, Chief Administration Officer Mara O’Neill, Chief Operating Officer Mursal Osman, Technology Coordinator Samir Saikali, Financial/Grants Officer Angelita Scott, MGM Marketing Coordinator Brian Singer, Loan Department Director Emma Spillman, Office Manager Mihailo Temali, Executive Director Sai Thao, Loan Officer Michael Thielen, Loan Fund Administrator Romaine Turner, Loan Officer Teshite Wako, Chief Financial Officer John Wheeler, Director of Real Estate Development

Trainers and Consultants Shahir Ahmed Jeffrey Alexander Eduardo Barrera Theresa Baumann Dave Bonko Barry Bonoff Yolanda Cotterall Hussein Farah Tony Genia David Goodman Lao Lu Hang Wendy Hines Michelle Jansen Grover Jones

Trainers and Consultants (Con’t) Tara McCarthy Leo Montes Phillip Porter Bob Reed Edgardo Rodriquez Linda Sapp Joanne Simons Frank Sprandl Romaine Turner Teshite Wako Dale White

Board of Directors Kate Barr, President Nuro Bedhaso Dedefo Waﬁq Fannoun, Secretary John Flory, Vice President Tony Genia, Former President Desiree Heller Tom Kingston Ramon Leon Juan Linares Lorrie Louder Thomas McBurney Arvid Povilaitis William Sands Vivienne Williamson, Vice President Der Yang

633 University Avenue West, Suite 200 Saint Paul, MN 55104 Phone: 651-291-2480 Fax: 651-291-2597 www.ndc-mn.org