Three years ago, the
Northeast Investment Cooperative (NEIC) was created to allow people to collectively buy, renovate, and manage commercial and residential property. Despite a mix of restaurants and retail businesses on Central Avenue in Northeast Minneapolis, and the adaptive reuse of former industrial buildings into the immensely popular
612 Broadway and
Crown Center nearby, the area has a history of rundown storefronts and absentee landlords. NEIC is changing all that.
With nearly $300,000 in member investments, and having transformed
2504-06 at the corner of Central and Lowry avenues into a successful building with thriving tenants, NEIC is sharing its innovative cooperative model nationally. Already, in New York City, inspired residents formed their own co-op modeled after NEIC — NYC Real Estate Investment Cooperative — and more than 200 people immediately invested.
In February, an article in
Yes! Magazine about NEIC went viral. Since then, the first commercial-property cooperative in the United States has been happily fielding inquiries from groups across the country, and board members will be speaking at conferences in St. Louis, Phoenix and Milwaukee on NEIC’s innovative business model. The appeal, explains Loren Schirber, a NEIC board member, is the opportunity to make a difference locally.
“People who have a vested interest in their neighborhood see the cooperative, commercial real estate model as an accessible way to make that difference and get a lot of other people involved,” Schirber says, and there’s more. “Kickstarter, Go Fund Me, Facebook and other social media and crowdfunding sites have changed how we do marketing and communications, so real estate investment opportunities are becoming more localized and accessible to people. This is the next logical step, because people don’t simply donate, they see where their money goes, what it’s doing and take ownership in the process.”
The cooperative real estate model also takes our new cultural emphasis on the local and bespoke — whether beer, food or handmade goods — further, Schirber continues. “How you save for retirement or invest is a logical extension of trying to be more conscious of what to do with your money and the influence you have. So with NEIC, we tackled an eyesore in the neighborhood we wanted to see changed. That resonated with local people…. and word traveled.”
Through NEIC’s cooperative structure, any Minnesota resident could join for $1,000. They could also invest more by purchasing non-voting stock. After a year of seeking investors, NEIC purchased two buildings on Central Avenue. Aki’s BreadHaus and Fair State Brewing Cooperative opened in 2014. NEIC’s partner, Recovery Bike Shop, is located next door. In total, the project represents more than a million dollars in new investment on Central Avenue.
“We spent thousands of hours getting started, fine tuning our bylaws, figuring out our structures, setting things up,” Schirber says. “Sharing that information with other groups, to make the process easier for them, is a principal of cooperative ownership.” So far, groups located in places from Seattle to Silver Spring, Maryland, Northern California to Cincinnati, Ohio, Texas to Washington D.C., have contacted NEIC for information.
Meanwhile, NEIC is avidly seeking a second property to bring to investors, and holding three information sessions and happy hours to discuss past successes and future plans:
June 4: Info session at Eastside Food Co-op (7-8 p.m.), happy hour at Fair State Brewing Co-op (8-9 p.m.)
July 16: Info session at Narobi Market (7-8 p.m.), happy hour at Fair State Brewing Co-op (8-9 p.m.)
August 13: Info session at TBD (7-8 p.m.), happy hour at Fair State Brewing Co-op (8-9 p.m.)
“People have plenty of opportunities to become a minority investor,” Schirber says. “But from a tenant, investment and neighborhood standpoint, a cooperative model offers people more accessibility, control, ownership and a tangible reason for success.”