FUNDING REVITALIZATION

PROJECT: FORM A LOCAL INVESTMENT GROUP

Goal

Create a group of like-minded investors who can quickly buy key downtown properties as they become available and then work with city officials to prepare and market them to new businesses that match the revitalization plan’s objectives.

Description

The key ingredient is people whose main interest is the long-term vitality of downtown Frankfort and not their own immediate profit. Sounds too good to be true? See below for case studies.

The following pieces are needed to form a successful investment group:

• People able and willing to invest in downtown.

• A vision that is shared by the investors, community organizations, city officials and citizens.

• A strong relationship with the city and support groups.

Action Steps

1. City and economic development officials approach potential investors to share their downtown vision and gauge their interest. Create a group identity rather than relying on individual investors.

2. Contact people from the case studies below to learn about forming a group and getting started.

3. Research supplementary funding and support:

• City incentives.

• Local not-for-profit groups with shred interests (housing, etc.).

• The TIF district.

• Banks (CRA credits).

• Grants.

4. Acquire Property

• Identify potential tenants.

• Gain control of a building and determine best usage.

• Renovate for business.

• Make marketing sheet (square feet, traffic, etc.).

• Offer at subsidized rent initially.

• Recruit.

• Repeat.

Case Studies

There are many creative and inspiring national examples of local investment groups. When a bakery in downtown Clare, Mich. was about to close after 113 years of continuous operation, Clare’s municipal police department heard the news and nine members decided to buy the business. Each person agreed to put in a modest equal initial investment and to make a small additional monthly investment for the next year. They would manage the business as volunteers and there would be no profits distributed for at least 12 months.

In Galesburg, Illinois, a handful of entrepreneurs banded together to acquire most of the buildings on downtown Seminary Street in order to reinvent the district.

In Indiana, the 2,360-resident City of Dunkirk is home to the Dunkirk Investment Group (DIG), which restored several buildings and created a public-private partnership with local government. DIG, which is comprised of local businessmen, invested over $400,000 of its funds and has recruited a new downtown medical practice and is restoring the city’s grandest building. The group is open to sharing its experience with other communities. Start by calling Jay County Community Development Director Ami Huffman at (260) 726-3497.

In 2011, a group of concerned citizens in Minneapolis came together to form the Northeast Investment Cooperative (NEIC) to buy and develop real estate in a struggling area of the city on Central Avenue.

The NEIC structured their group so that any Minnesota resident could join for $1,000 and invest more by purchasing different stock. After one year of existence, the NEIC had enough members to buy two buildings on Central Avenue that the group had been eyeing