Commercial Affordability Summit: A Recap (Part 2)
Last October, community leaders, financing strategists, philanthropic funders, economic developers, and policy makers convened for a day of sharing ideas about regional models and approaches to increasing commercial affordability, capital access, community ownership, and capacity building, and increasing connections to help grow models for a thriving and equitable regional small business ecosystem.
In this second part of the Commercial Affordability Summit recap, read about other current programs and models of commercial affordability and access to capital and support for small business and entrepreneurs: from those led by the City of Seattle such as Restored; to some of the most community rooted examples of commercial affordability projects. Panelists shared examples of the work in which they’re involved, some of their big questions, and potential partners to involve and tools to apply.*
Commercial unaffordability is not a local issue; it’s happening across the nation. Black, Indigenous and people of color-owned businesses and communities are being displaced. What is unique to our region and other coastal areas is that real estate prices are very expensive, and soaring.
“One of the things I’d really like to see a national conversation about is a national fund for community ownership of commercial property. Again, because this is happening all over the country and what is happening is, like, project by project, we’re trying to scrape together the money for these and we’re asking – and I think some of the bigger foundations are probably hearing these requests from many, many places – and so how could we do a better job of having some national infrastructure to develop and address this rather than trying to do each individually.” - Tina Vlasaty, Deputy Director, LISC Puget Sound
Ironically, the COVID pandemic and its impacts showed the importance of small, and especially legacy businesses, as anchors in communities. The pandemic opened opportunities for local governments to try new strategies and to invest in small businesses.
“The pandemic came along, and we had all this money. We’d been working on this a little while, but now there were resources. And again, because of the pandemic, governments could break the rules. We could invest in things that we couldn’t have invested in before.” - Chuck Depew, Grow America, Seattle Business Community Ownership Fund
“There’s been sort of a reset on expectations of investment into small business projects and businesses and it’s great to see that exists because before the pandemic, that was not even on the radar. Now is the time to show that those resources are well served to be for those purposes and that local government knows what to do with that and knows how they should work with local communities. Taking what was an experiment during the pandemic and transitioning that into local programs is the pivot that should happen now.” - Ken Takahashi, JPMorgan Chase Corporate Responsibility
Panelists shared some of their current big questions: Who are some potential partners who can come to the table with funding? How could we create partnerships with housing developers to active commercial spaces? How could a master tenant manage spaces designed for big chains to lease smaller square foot spaces? Sharing spaces is another option – how to activate them?
“Cost continues to go up. Construction cost is pretty high. And we have an affordability target. So, we need to backfill that with sources that don’t require return. We need philanthropy. But at least in Seattle we now have a term for commercial affordability. It’s not a percent below market and it’s not a rent that is going to escalate every year. You’re going to be there as long as you can run your business and your rent will never change. So, you can feel confident in growing your business, invest in your business and take that revenue and use that revenue to increase the value of business and grow wealth.” - Chuck Depew
COO Commercial Affordability Summit participants
“We need the strategy and the creativity.”
There was agreement among the panelists of the last panel of the day that technical assistance and imagination must go hand in hand. It’s all connected, and it has to begin in trust and relationships, regenerative relationships, having that foundation first – relationship with ourselves, with each other, and the future.
“Something that we remind people in our community gatherings is that the folks at Goldman Sach can structure any kind of deal they want at any time. And so, if you can work at the edges of the law for extractive outcomes, you can work at the edges of the law for regenerative outcomes.” - Noni Session, East Bay Permanent Real Estate Cooperative
“My vision and personal visions and dreams and hopes that I was like, I can’t do that, now I think I can, because I have been surrounded by the technical knowledge, the wherewithal, and people who are willing to share that with me.” - Olisa Enrico, Cultural Space Agency
“I think it’s both and I think you got to start with the emotional because if you start with the technical assistance you’re going to start in this little narrow box and that box of possibility where you’re going to stay in is really tiny.” - Michael Seiwerath, SEED Seattle SouthEast Effective Economic Development
“We try to focus on being in right relationship with folks that we partner with and that are in our community and try to together figure out what that means. How do we not just talk technically about being more regenerative and equitable in our relationships with each other, in our practices because we often have a lot of internalize oppression and racism that is triggered when we get into pressure situations. We’ll encounter ups and downs, but if we can be in right relationship to each other and ourselves, we can sustain and we can be able to see clearly where the future is.” - Njuguna Gishuru, People’s Economy Lab
Ultimately, the goal is about the business being successful long term, it’s about growing wealth in the community. Pairing with technical assistance to think beyond pop up opportunities for long term success is critical.
“It’s one thing to throw money at a business and be able to say, ‘Here’s a shiny, newly built out restaurant.’ It’s another thing to talk about commercial affordability and then, generational wealth as well. Just because you have a business and you’re able to get them open through some support and subsidies doesn’t mean that they’re going to actually generate wealth because wealth generation comes from the profit that a business is able to get and see at the end. If we’re not able to provide the technical assistance and those wrap-around services, then it’s really challenging for a business to actually profit in the city.” - Chera Amlag, City of Seattle OED Commercial Affordability programs
“Chase invested in a program that was started by the city, Seattle Restored, to activate empty storefronts. There’s opportunity for private-public collaboration on a program that works on many different levels with not only inviting people back to downtown because it creates more activity but it gives small business, particularly BIPOC-owned businesses, access to a market where maybe they didn’t have that access before and there’s pairing of technical assistance to help those businesses think beyond just that pop-up opportunity and to think about long-term; how do you transform that into a permanent lease somewhere, if not that location. Can this investment that we’re making help to encourage other corporate partners, foundations, to step up and work with the city on a program with activation that can get the city started again?” - Ken Takahashi, JPMorgan Chase Corporate Responsibility
What’s next?
Among the possible building blocks for the future of commercial affordability, panelists identified opportunities with the state of Washington and its State Small Business Credit Initiative (SSBCI) which will receive federal funding for a number of programs; working closely with affordable housing agencies and developers; non-extractive skills and resource transfer; offering different strategies to access capital; changing the narrative about commercial affordability; among others.
“The way that we think about all of these strategies is really trying to close the racial wealth gap and really look at the displacement that’s happening. So, we don’t think there’s a one size fits all strategy for this, you really have to tackle it in different strategies and so with all of those strategies, the access to capital and affordable capital really runs through and is woven in all of that.” – Chera Amlag
“The real critical part of accelerating, of incubating, is non-extractive skills and resource transfer that attends to power imbalances, that attends to differential access, and is really transparent about it.” - Noni Session
“One of the biggest opportunities we have coming forward is with building mixed used projects [near public transit] all over the Puget Sound. All of them have a ground floor commercial space. That ground floor pedestal is the foundation of the housing. We’re spending the money for that space and yet I have to buy it again for commercial affordability. The biggest source of help that we could do in affordable housing is let that housing dollar be spent once; don’t make us buy that commercial space. I’ll invest inside the space, that’s fair. But don’t make me buy the shell.” – Chuck Depew
“This is good for the building, good for the community and creating a vibrant commercial corridor. How do we flip the narrative to be able to talk about how this benefits everyone. Yes, we can talk about equity and we can talk about this in language that makes this interesting and viable for a variety of folks to get better buy-in from some of the private sector folks.” – Tina Vlasaty
“The bureaucratic and technical work comes with the load of Western hierarchical violent practices where your mission may look great and be regenerative but inside of your organization it’s a nightmare. The shifting power practices, how we share power, how we understand power, is going to be the critical hinge to durable grassroots organizations. We fall apart immediately when violence is the trope that moves our work forward. So what we teach ourselves and our community is that we’ve got to completely shift our mindset on what it is we think we’re doing here while we contest with the market actors and model how the market can look different. The invisible hand is not invisible. It’s people, things, ideas, and ideologies being moved forward with financial decisions every day.” - Noni Session
Issue(s) of commercial unaffordability, displacement, extraction and economic exclusion are prevalent across the country and so are those dreaming and working on solutions. If the one model is bringing people together to move forward specific solutions – COO’s commercial affordability pilot being one solution tried and now being iterated on. COO wants to continue to support the development and growth of solutions and the diversity of models being implemented in our region by creating spaces for sharing the knowledge and learning happening here and in other areas.
“We just have to know that we’re all in this together. We might have different ways we’re doing it, but at the end of the day, it’s all connected. Our small lane of being a small business loan provider feeds into the developments at the ground floor, maybe not the technical or the tenant improvement dollars, but maybe the capacity dollars for them to be able to grow their business. So, it’s all connected, and it has to be relationships.”