Business development funds could expand programs, connect Greater Minnesota

The Neighborhood Development Center not only helped Damon Johnson get his start as co-owner of the Grooming House barbershop, but it also helped him open a second location, launch a second company, Peerparazzi, and provided him with a place to refer to other aspiring entrepreneurs.

The center has helped at least four barbers who worked at the Grooming House open their own shops, and allowed other community members to turn their ideas into reality, Johnson told the House Jobs and Economic Development Finance Division Tuesday.

HF4011, sponsored by Rep. Rena Moran (DFL-St. Paul), would provide a one-time $600,000 appropriation in fiscal year 2021 to support and expand the center’s programs.

Rep. Rena Moran

The division laid it over for potential supplemental budget bill inclusion.

A companion, SF3804, is sponsored by Sen. Bobby Joe Champion (DFL-Mpls) and awaits action by the Senate Jobs and Economic Growth Finance and Policy Committee.

The Neighborhood Development Center has a 27-year history of helping low-income and minority entrepreneurs open businesses, with a combination of training, lending, technical assistance, and access to real-estate, said CEO Mihailo “Mike” Temali.

Thanks to financial support received last year, the center was able to provide 11 weeks of training to 222 low-income entrepreneurs; make 30 loans; provide one-on-one technical assistance; and begin expanding its model across Greater Minnesota, he said.

It is also working to open a sixth small business incubator near the intersection of University and Dale streets in St. Paul, Moran said.

Additional funding would allow the center to develop an online platform to better reach entrepreneurs in Greater Minnesota, and support an expansion of its work to include more detailed financial training and digital literacy programming for both prospective entrepreneurs and current business owners, Executive Director Renay Dossman said.

Some aspiring entrepreneurs are unable to complete the center’s business training because they don’t have the technological skills needed, but current entrepreneurs also struggle with questions about how to most effectively use the technology available to them, she said.

Each year, businesses that got their start with the center bring in $20 million, $12 million of which goes to the state in income and sales taxes. They also create more jobs and empower entrepreneurs to share their knowledge and experience, Moran said.

“It is a great return on investment,” she said.

Rep. Bob Gunther (R-Fairmont) also spoke in favor of the program, saying that it’s proven to produce jobs and tax revenue that “pay back” the state’s investment.