Small businesses, especially those owned by people of color, are threatened by the financial impact of COVID-19. A network of practitioners dedicated to the prosperity of small businesses matters now more than ever. Together, five cities -- Atlanta, El Paso, Long Beach, Newark and Rochester -- partnered with City Accelerator to explore how they can play a role in facilitating the equitable growth of their local businesses. With support from subject-matter expert, Rod Miller, President and CEO of Ascendant Global, cities identified and implemented inclusive strategies to help their local businesses thrive.
Listen to learn how the City of Atlanta partnered with City Accelerator to support the growth of an inclusive business ecosystem in its city. For immediate guidance on how Atlanta is supporting small businesses during COVID-19, check out the resources on its website.
This podcast series was recorded live from Long Beach in June 2019, where the cities gathered to share lessons learned and successes from their participation in the City Accelerator. In this episode, Atlanta shares its vision for using shipping containers as a tool to provide affordable and accessible business real estate.
Guests featured in this episode include:
- Paul Taylor, Editor of Governing Magazine
- Rod Miller, President and CEO of Ascendant Global
- Erika Smith, previously Southside Community and Economic Development Manager at Invest Atlanta. Erika is now a Senior Associate at the Annie E. Casey Foundation, managing and advancing the Foundation's community-based and economic opportunity strategies focused on children and families in Atlanta.
Transcript:
Paul Taylor: Live from MADE by Millworks Space for Creatives in Long Beach, California, the home of the original Rosie the Riveter! This is Living for the City!
Five cities on a mission to level-up the economic opportunities for entrepreneurs of color -- a mission supported by the nonprofit, Living Cities, and the Citi Foundation. I'm Paul Taylor, from Governing, along with Rod Miller, Founder, President, and CEO of Ascendant Global, and the cohort lead for this 18-month journey on local business and job growth.
This time out -- Atlanta, Georgia -- a second time City Accelerator city. It did its first round of heavy lifting around meaningful engagement a number of years ago.
Erika Smith: I am Erika Smith, the Southside Community and Economic Development Manager for Invest Atlanta.
Paul: Atlanta has got a reputation for being a successful hub for Black-owned businesses. What was the motivation to return to the City Accelerator to push on economic equity?
Erika: There were two main concerns. One, once analysis was done on the value and profits of our businesses of color, we realized that most Black businesses were performing 1000% lower than their predecessors, their counterparts. We realized that we needed to focus on technical assistance and how we can help those businesses grow.
Secondly, we have a very dynamic real estate market. With gentrification, I'm moving into the Southside, where most of our people of color and businesses of color reside. We were in a position where business displacement was of concern. We wanted to participate in a program that would give us the opportunity to develop a pilot program to help us create a financial tool where businesses of color could purchase their real estate and also receive the technical assistance needed to help them grow.
Paul: Shipping containers.
Erika: Yes.
Paul: Semi-permanent looking, kind of trendy. I've seen brew pubs in them.
Erika: Yes.
Paul: Super simple. Let's do it. We're done in a week. Take the rest of the time off.
Erika: Yes, in theory. We learned that for the State of Georgia, and the City of Atlanta, and most cities around the country, shipping containers are a very innovative and new way to approach affordable, accessible real estate. But we learned that, based on our policies and the newness of it, that it would be a more complicated project for our local businesses. We've been challenged with, ‘How we recognize them as commercial real estate versus personal property? How can we get funders, whether they are CDFIs or banks, to finance them? And then, from a building permit and occupancy perspective, how do they have to be installed in order for them to fit our building codes and regulations?’
It was still a cheaper option than a traditional brick and mortar, but the idea that, in a week, we can ‘plug and play,’ is very aspirational. We are structuring our program, though, so that we can assist the businesses with achieving their goals. Still using this cost-effective real estate, but doing it in a way that can lessen some of the burdens that they may face. We have an answer; we will find an answer.
Rod: The question is really a question that communities across the country are facing as real estate prices rise. What are the types of things you're exploring in terms of finding a potential solution to making real estate more accessible for people of color?
Erika: Yes. I have to remind everyone that this is a pilot program. First, we decided that -- since Invest Atlanta has over seven different small business loans -- we would be the lender that would provide 80% of the value they needed to obtain a loan for that. Our product is the commercial down payment assistance product. We are aspiring to provide entrepreneurs with 20% of their capital expenditures for the acquisition and renovation of that real estate.
Then, once the pilot is completed, we will be able to launch this with any type of property. So, whether you want a 1500 square foot building or a 3000 square foot building, we will be able to use this product for that. Because this is a pilot and because we have a grant, there's a need to fundraise. We are reaching out to our philanthropic partners, social impact investors, and others, to develop an integrated capital model so that we can develop a fund that can make this sustainable.
Paul: What does this look like 10 years from now?
Erika: My vision is that every entrepreneur of color that sees it as a valuable asset and wealth building asset to obtain commercial real estate, to buy it, to purchase it -- that we have a product that allows them to. So that our businesses are no longer at risk of displacement; they're no longer in leases that are not designed properly for their benefit. And, so that we have thriving businesses and thriving communities that are serving the existing population so people can shop, live, dine, eat, work, play – everything -- in their community, and entrepreneurs of color can provide that for them.
Paul: Have you put this to rhyme yet?
Erika: I am working on my 16 bars so that I can end this in a wonderful rap. It’s still a work in progress.
Paul: We’ll have you back when that's done.
