How to Save Legacy Businesses
V.2, N.56
Our lead article, well worth reading, explains Atlanta’s recent decision to create a Legacy Business Program. The same problems afflicting residential real estate across the country—speculative investors making housing unaffordable for renters—also affect commercial real estate. Existing landlords, who love flipping properties, jack up rents to facilitate higher selling prices, and the new landlords that replace them often are looking for new, higher-paying tenants. To preserve the older businesses that have come to define Atlanta, many of them Black-owned, the City will offer financing and technical support to help tenants buy out the properties. It’s a great idea, and similar programs have been implemented in San Francisco, Los Angeles, Denver, San Antonio, Boston, and Washington, DC.
But these programs are tiny. Atlanta, for example, has allocated $900,000 to assist 500 legacy businesses!
A smarter approach would be to create a dedicated municipal real estate company to buy properties from pernicious landlords, stabilize the businesses, and then spin them off into new, community-owned entities. These entities could be for-profit, co-op, or nonprofit, perhaps even structured as commercial land trusts, all financed by local investors. A city might offer tax credits to accelerate these investments. The point is that a wider approach is needed. Don’t just award a few $10,000 grants here and there, but orchestrate a powerful local investment ecosystem that reinvests billions of dollars into local properties.
For example, Atlanta might create its own Business Exchange, offering residents investment opportunities in hundreds of different properties. It might help residents move pension savings into these properties through self-directed IRAs and solo 401ks. It might send periodic emails to residents reminding them of what investment opportunities are available.
And consider the collateral benefits. If 100,000 Atlanta residents own the legacy businesses in the City, guess where they will likely shop?
Other articles you’ll find this week:
ImpactAlpha reports on a recent gathering in Denver on the emerging ownership economy. “Driving ownership of real assets—land, homes, businesses, communities, and, yes, equities—down the quintiles of the country’s wealth pyramid has become a viable, and arguably essential, investment strategy.”
The first round of Empowering Rural America grants has been announced. Ultimately, these grants are expected to benefit a fifth of residents in 23 rural states, with gigawatts of new clean power from wind, solar, agrivoltaics, and battery storage. The program is anticipated to create 4,500 permanent jobs and 16,000 construction jobs. (If you know rural voters who think the Inflation Reduction Act was a complete waste of money, please let them know.)
A new retail trend, according to The Atlantic, is small stores. Brands are using these stores to connect with shoppers, many of whom make their final purchases online.
A new report from Scotland outlines recommendations for growing the nation’s number of social enterprises, employee-owned businesses, and cooperatives. One recommendation is “extending the role of social investment and democratic finance providers to cover all enterprises operating with an inclusive and democratic business model.”
Even though recent Supreme Court cases outlaw certain race-based preferences (in university admissions, for example), the Brookings Institution outlines viable strategies for government entities, banks, foundations, and foundations to prioritize Black-owned businesses.
Finally, a reminder that you’ll soon receive an email from me encouraging you to become a paid subscriber or donor for The Main Street Journal. Please beat me to it by clicking on the button below!
- Michael Shuman, Publisher
NEWS
How Cities Are Protecting Their Legacy Businesses, Next City (September 4)
Ownership-Lens Investing, ImpactAlpha (September 20)
Rural Energy Co-ops Get Boost, Shareable (September 5)
Brick-and-Mortar Retail Adapts, The Atlantic (September 4)
Growing Inclusive and Democratic Business Models in Scotland, Co-op News (September 11)
How to Fund Black Businesses During a DEI Backlash, Brookings (September 18)
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WHAT YOU MISSED IN THE LAST MSJ EXTRA!
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The National Coalition for Community Capital (NC3) is dedicated to educating, advocating, and activating community capital—and serves as MSJ's fiscal sponsor. Thank you for being a part of a growing movement! Contact NC3 for support integrating local investing in your work: info@nc3now.org.
NC3 UPDATES AND ANNOUNCEMENTS
Last week, NC3 and our community capital work were featured during the International Economic Development Council’s Annual Conference in Denver, CO. Over 1,500 attendees from all over the world came together for the event, which focused on communities and entrepreneurs.
One hundred forty signed up for our session focused on our Diversified and Aligned Community Investment Funds, and we featured six Economic Recovery Corps (ERC) fellows as co-presenters who workshopped the process of setting up funds in their host communities. NC3 fellow Sydney Davis and ERC staff helped us manage six interactive concurrent workshop circles during our session.
Several high-value conversations took place during the Conference, including one with Keynote speaker Victor Hwang, CEO and Founder of Right To Start. Victor’s work simplifying the process of starting a business in the US through legislation and policy changes nicely compliments NC3’s work, bringing capital and wealth-building to communities across the country. Growing more businesses is a critical part of closing the wealth gap and building resilient local economies, and we are glad for partners like Right To Start.
PARTNER NEWS & VOICES
New CEO Set to Lead, ImpactPHL (September 16)
The Compost Co-op Offers Formerly Incarcerated Path to Worker Ownership, Resilience (September 12)
Credit Unions, Race, and Equity, Nonprofit Quarterly (September 11)
Hustle Economics, Neighborhood Economics (September 11)
Upcycling and Uplifting: Pingree Detroit's Revolutionary Impact, Superpowers for Good (September 10)
NEW INVESTMENT OPPORTUNITIES
Our complete list of recently posted investment opportunities has moved to MSJ Extra! As a teaser, here is an offering from our list. (Please note that our listing of these opportunities is not an endorsement. Remember that all investments are risky, so click on the hyperlinks and read all the details carefully before investing.)
BOYD Cycling (Greenville, SC) - Vicinity: Bicycle wheel manufacturer (Growth business stage)
NOTABLE NEW RESOURCES
Nia Evans of The Ujima Fund, Community Capital Live (September 25)
New Economic Thought Timeline, Schumacher Center for a New Economics (September 10)
Black Businesses as a Key to Unlock Neighborhood Well-Being, Atlanta Wealth Building Initiative (August 26)
MSJ EVENTS
Community Capital Live: Steve Saltzman of NH Community Loan Fund - Virtual Event: October 9, at 2 pm ET
MORE EVENTS
Works for All: Movie Screening and Panel Discussion - In-Person Event (Oakland, CA): October 7, at 6 pm PT
Make Your Impact Count - Virtual Event: October 10, at 1 pm ET
FOOD FUNDED 2024: Regenerate - In-Person Event (Berkeley, CA): October 15
Remaking the Economy: Co-op Ownership of Mobile Home Communities - Virtual Event: October 16, at 2 pm ET
Regulated Investment Crowdfunding Summit 2024 - In-Person Event (Washington, DC): October 22 - 23
Neighborhood Economics: A Deep Dive into Local Entrepreneurship - In-Person Event (Asheville, NC): November 12 - 13
Small Business Anti-Displacement Network: Summit on Community Ownership - Virtual Event: November 14
JOBS BOARD
Center for Economic Democracy: Policy and Research Director
Common Future: Chief Operating Officer and Fundraising Relationship Specialist
East Bay Permanent Real Estate Cooperative: Cooperative Education & Engagement Manager and Real Estate & Finance Analyst
Fair Food Network: Investment Manager
Institute for Local Self-Reliance: Associate Director of Development
Partnership for Southern Equity: Just Opportunity Manager
Shelterforce: Development Director
ASKS
If you or your community has a project on local investment or local economies that needs help, please let us know. We invite our readers to assist each other.
Tern Strategies is engaged in a year-long research project with partners to understand the scale and scope of CDFI investment note offerings in the US. Through an online survey, they ask investors and investment advisors about their motivations and experience with CDFI investments. They seek participation from individuals, asset managers, nonprofit and faith-based organizations, and investment advisors. The survey should take 10 minutes or less. Learn more and take the survey today!
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The Main Street Journal aims to catalyze the movement of $50 trillion from Wall Street to Main Street to facilitate economic development and economic justice. It’s sponsored by the National Coalition for Community Capital, with grants from the Heron Foundation, Wallace Global Foundation, and the Bondi Foundation. We welcome feedback about everything, from our design to content. Please send ideas to Jen Risley at jen@main-street-journal.com.
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