Mayor Rybak, Geek Squad Founder Welcome Blackbird Café to New Home as Recipient of City’s 1,000th 2% Loan to Small Businesses
Innovative program has leveraged millions more in private investment — and has kept lending and creating jobs during depths of recession
September 30, 2010 (MINNEAPOLIS) Mayor R.T. Rybak was joined by Robert Stephens, founder of the Geek Squad, and small-business owners and elected officials as they celebrated today the 1,000 th 2% loan that the City of Minneapolis has made to a small business: the Blackbird Café. The event was held at the Blackbird’s new home at 3800 Nicollet Ave., where they have relocated since a February 18, 2010 fire destroyed their previous location and several other small businesses at W. 50 th St. and Bryant Ave. S.
Since the start of the City’s 2% loan program in 1988, the 1,000 loans have generated a total $28 million in investment in Minneapolis’ small-business community — and that investment has leveraged $87 million more in private investment. Those 1,000 loans have helped create more than 2,000 jobs and retain more than 9,300 jobs. In addition, the loans have a remarkable success rate: since 1988, over 97% have been fully repaid with interest.
"Small businesses represent the sweet spot in our economy where City help, even in seemingly small amounts, can make an enormous difference," said Mayor R.T. Rybak. "These are the right investments for government to make — and now more than ever, this is the right time to do it. I’m proud that through this tough recession, the City of Minneapolis has continued to lend to small businesses and helped them create jobs and revitalize our economy when we need it most."
Matt Perry, president of the Nicollet–East Harriet Business Association, echoed the Mayor’s comments. "Small businesses create the fabric of the city," he said. "Small businesses in Minneapolis are likely to hire Minneapolis residents for jobs, so a small investment has big ripple effects."
Mayor Rybak was joined in celebrating the success of the 2% loans by Robert Stephens, the founder of Geek Squad, which today is a subsidiary of the Best Buy Company. Geek Squad received City financing in 1998, when it was just a start-up.
"The City’s loan was the one and only loan that Geek Squad ever took out, after we were turned down for financing by a bank," said Stephens, who is now Chief Technology Officer of Best Buy.
"From the Geek Squad to the Blackbird, we are standing shoulder-to-shoulder with entrepreneurs who are growing businesses and creating jobs," Mayor Rybak continued. "And the best is that there is more to come."
The 2% program was created as a way to provide funds to small Minneapolis businesses through a partnership with local banks. The City provides its funds at a 2% interest rate for a 10-year term, matched by the private lender’s providing half the loan at a market rate of interest. Since the program is revolving, loan repayments are then used for financing other small businesses.
The average size of a 2% loan is $25,000.
Minneapolis was a pioneer among large cities in supporting small businesses with low-interest loans when it launched the revolving 2% loan program in 1988. Since then, a variety of cities have emulated Minneapolis’ success.
City Council Member Elizabeth Glidden of Ward 8, who represents the intersection of 38 th Street and Nicollet Avenue, welcomed the Blackbird Café to the neighborhood. The City’s $75,000 2% loan to Blackbird Café is being matched by financing from Park Midway Bank.
Chris Stevens, co-owner of the Blackbird Café, said, "On the day of the fire, Mayor Rybak first consoled us, then handed us a packet of information about how the City could help us, and encouraged us to take advantage of the help. There were a lot of good reasons not to reopen the business, but the outpouring of support from neighbors, customers and the restaurant community, plus the help from the City of Minneapolis, convinced us that we should."
"We can’t measure how grateful we are for all the support," add Blackbird co-owner Gail Mollner.
Mayor Rybak added, "Even in the early hours of the fire, the partnership between the Blackbird and the City was beginning. Since that terrible day, we have been committed to making sure the Blackbird stays in Minneapolis, and I am thrilled that our partnership has succeeded.
"Repeat this story 1,000 times for a sense of the impact that 2% loans have had all over this city."
"City support for small businesses helps create job opportunities and neighborhood vitality," added Council Member Glidden. "The 2% loans, while helping individual businesses, often do much more. The program not only helped Blackbird Caf reopen, but will also help to re-energize the entire intersection. With the Blackbirds arrival, there are now active businesses on all four corners of 38 th and Nicollet!"
Blackbird Cafs new home is part of a wave of City-assisted renewal at the corner of 38 th Street and Nicollet Avenue. The City has invested more than $16,000 from the City’s Great Streets Façade Improvement Grant program in helping 10 nearby businesses fix up their storefronts. Some of the work includes new lighting and awnings, exterior paint, window replacement and new, inviting front doors to their business. This investment has leveraged $46,000 more in private financing.
Mayor Rybak also introduced Dean Sanberg, new owner of the small business WindRider International, a sailboat manufacturer that moved to Minneapolis from Pine City, Minnesota earlier this year. They are using a 2% loan of $25,000 to finance relocation costs and purchase production equipment. The City also provided WindRider with site assistance.
"We have a wide variety of tools to assist businesses, from those just starting up to expanding to relocating. The City of Minneapolis is actively seeking to help and support the business community," said Council Member Goodman, chair of the Community Development Committee. Goodman represents Ward 7, where WindRider International is now located.
The 2% loan program is one of 15 different finance tools that the City of Minneapolis uses to support Minneapolis diverse small-business community. For more information on other City programs and assistance for small business, see Business Assistance.
Published Sep. 30, 2010