The Brooklyn Park City Council gave the go-ahead to city staff May 17 to negotiate the purchase of the Northwind Plaza strip mall at 7970 Brooklyn Blvd and construct a small-business center in the vacant Xperience Fitness space.
The council, acting as the Economic Development Authority, came to the consensus that purchasing the site for the project would be favorable to leasing it. Operational plans are still in the development phases for the small-business incubation space, but it is planned to offer affordable office and meeting space for the city’s budding businesses and entrepreneurs.
“This project was really created from what we heard from the community, our business community, our entrepreneurs in our community, stating that there was a need for affordable space in which they can operate,” said Councilmember Susan Pha. “What a great time for us to do this.”
Discussions on a business incubation space began in 2016 while the city was exploring light rail station area planning. The project took tangible steps forward after the city received a $100,000 Metropolitan Council grant to fund planning efforts in June 2020.
“The intention is to really focus on our small and micro business and entrepreneurs in the community, so residents that live here, primarily that would be our focus,” said Kim Berggren, executive director of the Brooklyn Park Economic Development Authority.
The city plans to “try and create a multicultural environment so people of all races and background would be welcome in the space,” she said.
The site could potentially offer space to non-residents building a business in the city as well.
Since receiving the grant, the city has hired consultants to help search for and purchase a viable space. The city also began community engagement work with businesses and residents and contracted with African Career, Education and Resource Inc. to perform a feasibility study for the project.
Three eligible spaces were brought before to the council for consideration: the city-owned former Hennepin County Library location at 8600 Zane. Ave.; the former CVS building at 7996 Brooklyn Blvd., and the Northwind Plaza.
The council ultimately agreed that purchasing Northwind Plaza would be the best option moving forward. Up front costs for leasing or purchasing and renovating any of these properties are estimated to range from $3 million to $8 million depending on financial models.
Breanne Rothstein, economic development and housing director, declined to offer a more precise cost estimate for the property, saying the city has not yet submitted a letter of intent to purchase the property, and negotiations remain ongoing.
The development authority’s general fund and tax increment financing would be likely funding sources for project. The city is working to identify other outside funding and grant sources.
Operation of the small-business center would likely be a nonprofit incubation model. The center would offer physical space for entrepreneurs, as well as training, resources and networking with other business owners.
If purchased, the property could eventually be transferred to a community ownership model such as a cooperative or a community investment trust.
City staff members recommended the council consider Northwind Plaza for purchase because the large space offers immediate revenue from the existing tenants. It would be near the proposed Bottineau Blue Line LRT extension line and existing transit routes, allowing residents access by public transit.
Purchasing the property would give the city the option to control development of the site, avoiding gentrification if the light rail line is indeed constructed.
The former library building is further from existing retail shops, as well as current and proposed public transit routes. It would also require significant investment to be viable as a retail space.
The long-term financial benefits of property ownership for the project outweigh the higher upfront costs when compared with leasing space, said Daniela Lorenz, business development coordinator.
If Northwind is purchased, the city would contract with a property management company to oversee the existing tenants and the overall property. Typical costs for a property management company are approximately 4-5% of the total operating costs for the space.
Many residents are considering opening a new business or changing their models in the wake of the COVID-19 pandemic, Pha said.
Pha would only support the purchase of a building if the intent was to eventually turn the facility into a cooperative or another community ownership model and build community wealth, she said.
“I’m really, really excited about it,” she said.
Jacobson concurred with Pha.
“I feel like it makes the most sense for me now – to be able to have areas where small businesses can start up and then with the option to grow even into a bigger space where they need to leave this,” she said. “One thing that I hope we can do is maybe have student field trips to see what building a business looks like in our community.”
Councilmember Wynfred Russell offered support for the project, saying he hopes it moves forward quickly. “This is something that has been largely driven by community, and the community has been asking for this for a very long time,” Russell said.
Councilmember Tonja West-Hafer said that purchasing real estate makes sense for the project. Light rail construction would likely put financial pressure on the smaller businesses located in the strip mall, she said.
“I think us controlling the property and owning the property makes a lot more sense than leasing it,” she said.
Councilmember Boyd Morson said the council should reconsider using the light rail project as a selling point for other projects when its future remains unclear.
While Morson questioned if the existing parking lot would support the proposed use, he supported the purchase of Northwind Plaza and the project concept.
“If we consider this, we need make sure we consider the lack of parking,” he said.
The council ought to apply the same enthusiasm for affordable rents seen in this project to new housing developments in the city, Morson said.
Councilmember Terry Parks said that if the project moves forward, Brooklyn Park’s taxpayers should receive the financial benefits of the project. “I want to make sure that all of our taxpayers within our city have an opportunity to use it,” he said.
Parks took issue with Morson’s comments to other commissioners regarding the light rail line. “I don’t appreciate being reprimanded by Commissioner Morson for how I vote and how I talk on a certain agenda item,” he said.
Other large Economic Development Authority-owned properti
es include the Edinburgh USA clubhouse and the Brooklyn Avenues for Youth building. Both are operated by outside agencies.
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