Action:

Support local incubators or makerspaces, which offer affordable rents, flexible terms, shared equipment and services, room-to-scale operations, networking events, and communities of peer entrepreneurs.

How to Adapt This Approach:

• Identify and support local CDCs and CDFIs with a mission to support local manufacturing/ makers/entrepreneurship
• Engage local communities, entrepreneurs and neighborhood groups, to involve them in the project
• Help them to secure HUD Section 108 funding, New Markets Tax Credits, and other government funding to purchase/renovate a disused/underutilized building in a disinvested neighborhood
• Support land-use changes to facilitate the project
• In pre-development planning and space considerations, strike the right balance between creating a workplace and community asset that contributes to placemaking
• Plan to open doors to the public and forge ties with the local community, catalyzing public understanding of the importance of industrial spaces
• Support community-based organizations providing programs and services to local businesses
• Connect City/regional workforce training and placement programs and prioritize local hiring

Background

Immigrants and refugees start an outsize share of “Main Street” businesses — grocery stores, restaurants, and other establishments that help drive neighborhood-level economic development. Cities can play a role in supporting immigrant commercial corridors — and immigrant-owned food businesses in particular — through the implementation of place-based strategies, including providing access to commercial kitchen space for early-stage food entrepreneurs.

Strategies:

A. Promote commercial corridors where immigrant businesses are located. Immigrant- and refugee-owned businesses are often concentrated in specific commercial corridors and neighborhoods (e.g., Koreatown, Mexicantown, Little Italy, etc.). Cities can encourage residents to frequent these areas through creative marketing and promotion efforts. For example, each summer, the City of Philadelphia issues “passports” to Philly residents through a program called Passport PHL that encourages people to explore the city’s minority- and immigrant-owned businesses.

B. Support neighborhood-based community development organizations that serve immigrant small business owners. Community Development Corporations (CDCs) and other community development organizations provide business development services and opportunities for businesses to come together to improve and co-market their business districts. Cities can partner with these organizations to help develop commercial corridors and business districts where immigrant and refugee-owned businesses are concentrated. For example, Philadelphia’s HACE, a community development organization that primarily serves Philadelphia’s Latino community, runs a Main Street Program that provides technical support to business owners and encourages collaboration and networking among business owners in the community.

C. Launch a business incubator with commercial kitchen space. Access to commercial kitchen space is often a hurdle for aspiring food entrepreneurs and can be a barrier to growth. Food business incubators that provide access to affordable commercial kitchen space, as well as business training, technical assistance, and other resources can help immigrants, refugees and other underserved entrepreneurs grow their businesses. See case study: SPICE Kitchen Incubator.

A. Tax increment financing (TIF) revenues

Action:

Cities should review and develop plans to utilize TIF district revenues within their city. TIF revenues that have not yet been spent or accounted for should be used to augment, or even replace, general fund revenues for economic development programming.

Case Study #1

Chicago, IL – The Hatchery

The city of Chicago built a 67,000 ft2 food and beverage business incubator in an economically depressed west side neighborhood with very high unemployment. The incubator includes 56 commercial-grade kitchens, co-working and shared space, meeting space, and a community center.

Neighborhood residents are offered priority access to all of the spaces, discounted and hourly rates (which do not require a lease agreement), and free classes for both job seekers and entrepreneurs.

The project cost $32.4m and the city contributed a 2.6 acre parcel of land (which it sold for $1) and $7m of TIF funds. It was a creative approach to allocating TIF funds and not the “typical” deal which focuses on “gap and but for” financing for a predominantly private project.

The facility is co-owned by two long-standing Chicago nonprofits – microlender Accion Chicago and business incubator Industrial Council of Northwest Chicago.

IFF, a CDFI, served as the lead developer and was charged with pulling together financing and land parcels.

The financing breakdown was as follows:

• Debt financing from Chicago Community Loan Fund, IFF, MB Financial, and PNC Bank;
• $10.25 million of NMTCs from PNC Bank, Community Reinvestment Fund, and the City of Chicago;
• Grants from Kellogg Co., ConAgra Foods, Walton Family Foundation, and others;
• $7 million in TIF from the city of Chicago; and
• The $1 sale of 12 vacant city-owned lots (which were combined with 9 other parcels of developer-owned land).

Case Study #2

Gwinnett County, GA

In 2020, the Gwinnett County Board of County Commissioners led a campaign to increase property taxes by 30 cents per $1,000 of assessed property value.

The new tax will “provide funds for financial assistance to the Development Authority of Gwinnett County for economic development purposes.”

It is expected to generate $1m funding for additional programming, which will increase the economic development department’s budget from $5.2m to $6.2m.

Specifically, the revenue will fund the creation of the Gwinnett Entrepreneur Center which provides physical space, education, and networking connections for startups, the expansion of the Infinite Energy Center, and the development of the Water Tower @Gwinnett for water-related research and training.

Case Study #3

MAPS – Oklahoma City

The residents of Oklahoma City approved a new, time-limited tax to fund capital investment programs, which were known as Metropolitan Area Programs (MAPS).

The first MAPs was an additional one-cent sales tax, which raised $350 million, and was used to revitalize downtown, improve Oklahoma City’s image, and create new and upgraded cultural, sports, recreation, entertainment, and convention facilities.

The city subsequently proposed a second MAPS program, MAPS for Kids, which was again funded by an additional penny of sales tax. The new tax raised $514m which was combined with a $180m Oklahoma City Public Schools’ bond issue to renovate 70 school buildings and fund classroom technology and transportation projects. 70% of the funds were disbursed to the Oklahoma City Public School District, and 30% to the surrounding suburban school districts.

In 2008, the city’s residents approved a third MAPS program to fund improvements in the downtown arena and build a practice facility for a new NBA franchise.

They approved another MAPS programs to fund a Better Streets, Safer City program, and, in December 2019, a new “MAPS4” program. Since its creation, MAPS have provided $1.81b of funding, and the current programs are expected to provide $978m between 2020 and 2028.

Action:

Launch, or shine a spotlight on, programs that promote and connect MWBEs to new business-to-consumer (B2C) and business-to-business (B2B) opportunities, including national supply chains.

How to Adapt This Approach:

• Consider opportunities to shine a spotlight on local minority, immigrant, or other LMI small business groups
• Identify and reach out to local and national organizations that have aligned missions (such as the Urban Manufacturing Alliance or an ethnic chamber)
• While it might not be possible to replicate all the building blocks of the ORIGINS program, consider what is possible
• Use existing tactical guides, such as UMA’s Toolkit: How to Develop a Locally-Made Brand Platform.
• Provide access to dynamic City venues for exhibitions and popups, as well as City social media accounts
• Reach out to, and partner with, e-commerce platforms (such as Etsy and Amazon), and regional and national buyers that are courting makers and supporting the Black Lives Matter movement (such as Walmart and Levis)
• Also, reach out to potential sponsors and ambassadors/local celebrities

Action:

Work with nonprofit, academic, philanthropic and business partners to create and grow an entrepreneurial ecosystem tailored for underserved small businesses.

How to Adapt This Approach:

• Identify a lead for the initiative
  •  In most cases, a non-City organization (nonprofit, chamber, philanthropy, academic, etc.) is best positioned to house initiative
  • The individual leading the initiative should have extensive private sector experience, have credibility within the community of entrepreneurs where the initiative is focused, and preferably be an entrepreneur as well
  •  Cities should leverage their convening power to galvanize partners, support fundraising, and focus on City controlled areas where it can accelerate or remove barriers to entrepreneurship
• The lead organization should engage and assess the current ecosystem
  • Reach out to local business leaders and entrepreneurs to identify gaps in existing programming and opportunities
  • Outreach to communities of color and low-income individuals to understand the needs of all communities
  • Connect with startup and small business groups, local nonprofits, educational institutions, philanthropic partners, and business leaders to ensure participation. Part of the program’s benefit should be to offer networking and mentoring opportunities with established leaders
  • Use data (e.g., from Kauffman foundation’s My Sidewalk) to demonstrate where potential gaps and opportunities for entrepreneurship exist in the community
• The lead organization should build a coalition of partners to support the initiative, which could include education institutions, VCs, successful founders, corporate partners, and service providers (e.g., lawyers, bankers, accountants, real estate technical assistance providers). Ensure partners are representative of the community the initiative intends to focus on
• Work with the coalition of partners to develop a proposed initiative to build out the entrepreneurial ecosystem in the city. The initiative could include:
  • A physical center like RCIE, which focuses on providing all the support needed for a specific community of entrepreneurs
  •  An initiative to join up a network of existing coworking spaces, accelerators, entrepreneurship programs, events, etc. and connect it to MWBE or LMI entrepreneurs
  • The designation of an entrepreneurial ambassador who serves as a single point of contact to navigate and connect entrepreneurs to the ecosystemThe proposal will vary depending on the project but should include: the goal, the need/ opportunity, the coalition of partners, the program design, location, staffing, budget, metrics, and timeline/next steps
• Use the proposal to raise funds for the initiative. Pitch foundations, banks, and corporations on contributing financially, providing in-kind support, or advising the program. Start with the coalition partners who have helped develop the initiative
• Launch and implement initiative
• Track and publish KPIs on a regular basis. Include aggregated demographic and neighborhood data on entrepreneurs being served, services provided, outcomes, etc. (See KPIs section)

Action:

Use land powers and incentives to support inclusive development projects, which convert abandoned or vacant buildings in disinvested neighborhoods. Promote the projects to philanthropic, corporate, or other government funders.