Contact: David Beck, Self-Help, 919-956-4495 or david.beck@self-help.org
DURHAM, NC – Self-Help Federal Credit Union today announced the closing of a $4.6 million loan to Eastside Food Co-Op (EFC) in Northeast Minneapolis. The loan, supported by New Markets Tax Credits, is part of EFC’s $6.7 million expansion, which will create 25 new jobs and increase access to locally produced healthy foods in an area with a poverty rate over 25%.
The EFC loan is part of Self-Help’s nationwide program to finance co-operatives and other enterprises that facilitate access to healthy foods. To date, Self-Help has provided over $15 million in financing to 34 healthy food systems projects.
“EFC’s expansion means we can greatly increase our impact in Northeast Minneapolis, both for our co-op members and for the community at large,” said General Manager Amy Fields. “Our growth is a testament to the vision and hard work of our members, staff and board. Self-Help’s loan and guidance were critical for turning EFC’s vision into a reality.”
Opened in 2003, the self-described “Little Co-op That Could” now has over 5,000 active members. EFC began planning for expansion in 2012, but could not find conventional financing because high project costs and relatively low property values resulted in a loan to value ratio near 100%; in addition, conventional financing terms would have meant a high debt service burden for the co-op.
EFC was referred to Self-Help, a leading national Community Development Financial Institution Fund (CDFI Fund) certified lender. With its focus on healthy foods, co-ops and community development, Self-Help paired the CDFI Fund’s New Markets Tax Credit program with a U.S. Department of Agriculture (USDA) loan guarantee under USDA’s priority provision for regionally produced foods. These programs allowed Self-Help to provide a $4.6 million loan with a longer amortization and lower rate than conventional financing, making the project financially feasible.
In addition to Self-Help’s $4.6 million and EFC member contributions of just over $1 million, the remaining funds came from a variety of community sources. Self-Help worked with EFC to structure a financing package that included long-term, low-interest loans from the City of Minneapolis and from another CDFI Fund certified lender, Local Initiative Services Corporation (LISC). EFC also successfully sought grants from Hennepin County and the local Chamber of Commerce, rounding out the funding needs for the $6.7 million expansion.
“Although this financing has been really challenging and has taken many months and many people, I am so honored to have been able to work with this team of people who saw EFC’s vision and mission and worked to become part of it,” said Fields.
Self-Help loan officer Steve Saltzman said that “the EFC loan is a great example of Self-Help’s ability to finance increased access to healthy foods through community-based organizations like co-ops. We are committed to helping borrowers increase the production, distribution and consumption of healthy foods and look forward to supporting similar projects in Minnesota and across the country.”
EFC Project Financing at a glance: $6.7 Million project
* Self-Help Federal Credit Union loan - $4,600,000 via New Markets Tax Credit financing program
* USDA Business & Industry guarantee loan program (Locally or Regionally Produced Food Products provision)
* City of Minneapolis Great Streets loan - $450,000
* LISC loan - $250,000
* Hennepin County Transit Oriented Development grant - $150,000
* NE Minneapolis Chamber of Commerce Façade Improvement grant - $5,000
* Eastside Food Co-op operations - $205,000
* Eastside Food Co-op owners - $1,040,000