Public Markets as Sites for Immigrant Entrepreneurship. Function Code: S501 Matthew Lum, Alex Holsheimer & Beth Rodin

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1 Public Markets as Sites for Immigrant Entrepreneurship Function Code: S501 Matthew Lum, Alex Holsheimer & Beth Rodin 2012

2 Overview Definitions Public Markets as Engines for Immigrant Entrepreneurship East Hollywood Public Markets Project Mercado La Paloma Conclusion Q & A

3 What is a Public Market Public goals Located or creates a public setting Locally owned, independent businesses that are operated by their owners and not a franchise (Baum and Spitzer,1995).

4 What is an Incubator An incubator is defined as a building, a section of a building or proximate buildings where forprofit enterprises rent space and the facility provides management consulting services for tenants (Allen, 1985).

5 Literature Review Lessons Learned (1) Size (2) Experience (3) Costs (4) Community input (5) Customer base (6) Spin-off organization (7) Popular stores in the surrounding area (8) Community impacts (9) Business training (10) Low interest loans for immigrant entrepreneurs

6 Case Studies Los Angeles, CA Mercado La Paloma El Mercado Grand Central Market Oakland, CA Swan s Marketplace Fruitvale Public Market New York, NY Essex Street Market Malcolm Shabazz Harlem Market

7 Public Market Operator Question Guideline Customer Base Marketability Financial Programs Products Schedule of Public Market

8 Public Market Vendor Question Guideline Customer Base Marketing Products and/or Services Operation and Management

9 Swan s Marketplace

10 Swan s Marketplace Key Lessons Learned Taking over established businesses Affordable rents - $1.20 to $1.75 per square foot. Vendors in the market sell complementary products. Close to other shopping destinations in the area.

11 Essex Street Market

12 Essex Street Market Key Lessons Learned Strong marketing campaign. They hold community events for customers and pass out t- shirts, pens, canvas bags, mugs, flashlights. Low Rents Vendors are equipped to accept Electronic Benefit Transfer (EBT) cards. Close to public transportation

13 Focus Groups Armenian Focus Group Latino Focus Group Thai Focus Group

14 Key Lessons & Recommendations Community Support Funding Facilities and Location Programs and Activities Administration More Information on Research:

15 East Hollywood Public Markets by the Thai Community Development Center THAI TOWN MARKETPLACE ~ EAST HOLLYWOOD CERTIFIED FARMERS MARKET

16 East Hollywood / Thai Town

17 Goals Create jobs Incubate businesses Improve public spaces Access to healthy foods Cultural tourism and Preserve America Link wealth outcomes with health outcomes

18 East Hollywood Farmers Market $67,000 start-up costs USDA, Agricultural Marketing Services, Farmers Market Promotion Program East Hollywood Neighborhood Council Hollywood Studio District Neighborhood Council Vendor Fees Funding

19 Thai Town Marketplace Funding $1.6 million development costs Department of Health and Human Services, Office of Community Services Federal Home Loan Bank of San Francisco AHEAD Grant Union Bank Foundation City National Bank City of LA, CDBG

20 Economic Development Benefits Business incubation 19 first-time entrepreneurship opportunities 40 permanent jobs for low-income residents Multiplier effect in local economy

21 Location, Location, LOCATION! CRA/LA Redevelopment Project Area Enterprise Zone (Reduced parking) TOD Specific Plan Proximity to Hollywood and attractions

22 Site Description Mixed-use, affordable housing, transit-oriented Leasing > subleasing Small vendor stalls High visibility Mix of outdoor and indoor vendor stalls and seating Direct purchasing agreement with farmers market producers

23 Community Support and Design

24 Recruitment through API Small Business Program counselors Determine business readiness and offer training and technical assistance Entrepreneurship Training Program and ongoing assistance as a business incubator Collaborate with other non-profit and ethnic organizations Recruitment and Leasing

25 Market Synergy

26 Coming Fall 2012!

28 Mission of Mercado La Paloma Build Local Economies. By providing affordable retail opportunities, technical assistance, start-up capital and support, Mercado La Paloma seeks to create business ownership opportunities and living wage jobs in our community. It is our goal to offer needed goods and services to residents and employees and retain spending in our neighborhood. Provide Services. Through the non-profit offices located on the second floor, Esperan Salud (our public health drop by center), and our affordable meeting room that hosts a wide range of community meetings, events and classes, Mercado La Paloma provides a range of services to our community under one roof. Promote Arts and Culture. By hosting art exhibits, music and dance performances, spoken word, film showings and other events Mercado La Paloma seeks to support and showcase local artists, provide high quality art and cultural opportunities for our community and impart the unique heritage of the area s residents. Build Community. By creating a warm and welcoming gathering space full of guests from all walks of life and open to their ideas and suggestions, we provide opportunities for empowerment, enjoyment and connection strengthening existing social ties and creating new ones.

29 Location Selection Reason for selection of our site: Located within an Enterprise Zone Located with a Community Redevelopment Project Area Accessibility and visibility from the I-110 Freeway Close proximity to USC Close proximity to Exposition Park (museum complex) Adjacent to the Department of Motor Vehicles that when we opened at 465,000 visitors annually Regular and accessible public transportation

30 Location Challenges Over Time Freeway as a formidable barrier to major market segments Lack of marketing budget to build long standing connections with nearby target markets Located near, but not directly adjacent to transit The type of transit adjacent to the site is not typically used for lunch travel

after subtracting for circulation, seating,

31 Site: 3655 S. Grand Ave. Purchased a former garment factory. 34,000 square feet. Net leasable square footage of the first floor after subtracting for circulation, seating, loading, storage, trash handling and bathrooms is 7,680 square feet. 5,000 square foot second floor. 66 parking spaces

32 Design Process Input from future tenants Input from community residents Input of public market experts, specifically staff of the Project for Public Spaces

Design Then Designed a space for 30 vendors with

organizations The goal was to use the outside area for

33 Design Then Designed a space for 30 vendors with commercial spaces ranging from 70 square feet up to 600 square feet. Four to seven day tables a day Seven non profit organizations The goal was to use the outside area for events and day tables The goal was to use the conference room for meetings Our original design included a weekend farmer s market

34 Design Now We have space for vendors We have space for 2 day tables We rent office space to 6 non-profits We rent our conference room to a range of organizations We use our common areas for festivals and events. The Farmer s Market stopped after the first year due to lack of traffic. We may consider starting it again now that we have more foot traffic. Added AC and enclosed the space in 2008 In we did a major renovation funded by the CRA

35 Acquisition and Construction Financing Total Development Costs were approximately $7.1 million We received $2.6 from 22 foundations. The largest supporters were the Eisner Foundation, the California Community Foundation, the W.M. Keck Foundatio, California Endowment, and the Weingart Foundation. We received $800,000 from Corporations. Our largest Corporate sponsor was Washington Mutual that contributed $450,000 for 0% interest loans for tenant improvements to our vendors. We received $2.3 million from Government Agencies. US Department of Commerce, Economic Development Administration; US Deptment of Housing and Urban Development, Economic Development Initiative; US Department of Health and Human Services, Office of Community Services; CDBG Funds; US Department of Agriculture; Cultural Affairs Department; Council District 9 Farmer s Market Grant We received approximately $100,000 in individual contributions and $200,000 in organizational support. We received $1,100,000 in loans.

36 On-going Financing We have had an operating deficit since the first year at the Mercado largely due to our debt. In 2002 when it opened, the Mercado was losing approximately $100,000/year. This year, we have increased our staff to full capacity and have reduced our operating deficit to $50,000/year We have received operating funds over the years from Wells Fargo, California Community Foundation, Chase, Ford Foundation, EDA, Citibank, the Robert Wood Johnson Foundation and many other funders. We expect that within the next two years we will break even.

37 On-going Financing We have had an operating deficit since the first year at the Mercado largely due to our debt obligations In 2002 when it opened, the Mercado was losing approximately $100,000/year. This year, we have increased our staff to full capacity and have reduced our operating deficit to $50,000/year We have received operating funds over the years from Wells Fargo, California Community Foundation, Chase, Ford Foundation, EDA, Citibank, the Robert Wood Johnson Foundation and many other funders. We expect that within the next two years we will break even.

38 Recruitment, Retention, Leasing Originally we did television advertisements, printed media advertisements, and promoted in business development centers across the community. Current leasing has mostly occurred through word of mouth and relationships. Since inception we have been a home to 43 small businesses. The average tenancy is 5 years. We do not limit the length of time our tenants can rent space. We have created approximately 200 jobs in the community.

Technical assistance program now is specialized for each

39 Technical Assistance Our first set of vendors all went through an intensive year- long start up training program. Technical assistance program now is specialized for each vendor, given the varying levels of sophistication of our vendors.

Achieving our Mission We currently have 13 businesses housed at

news outlets for their quality We rent our conference to over

per year and are moving towards a place where we have at least

40 Achieving our Mission We currently have 13 businesses housed at the Mercado Our businesses have been recognized in prestigious news outlets for their quality We rent our conference to over 400 organizations a year We host a minimum of 6 cultural events per year and are moving towards a place where we have at least one cultural event per week. We host 6 non profit organizations

41 Q & A Thank you for listening!

BUSINESS DEVELOPMENT:

BUSINESS DEVELOPMENT: Project/Program Profile Name: (ETP) Organization: Asian Pacific Islander Small Business Program (API SBP) Location of Project/Program: 231 E. Third Street, Suite G-106, Los Angeles, CA 90013 Year Project