Netti Laundromat, 2530 N. 2nd Street, renovated by the newly-established FINANTA CDC
North Philadelphia-based community lender FINANTA has long taken an approach to neighborhood revitalization that focuses on asset-building — or helping individuals develop their capacity to get the resources they need to thrive.
FINANTA has done this by providing business loans, mortgages, counseling and financial training to low-income neighborhoods that otherwise lack investment and attention. On a case by case basis, the amounts of money FINANTA offers are small and the goals of the recipients modest — build credit, invest in their small business, take out a mortgage — but taken together the impact can be significant. Access to capital and expertise can lead to more homeowners, entrepreneurs and financially stable individuals and families in the community. (Read more about FINANTA’s work here).
This approach differs from another type of community development, common throughout Philadelphia, that focuses on improving the community as a whole, such as building housing or maintaining commercial corridors. Through FINANTA’s model, residents are given the financial resources and training they need to hopefully improve their communities themselves.
But after nearly two decades focused on asset-building, FINANTA is moving into new territory with the establishment of a separate but closely associated community development corporation (CDC) to acquire and develop commercial properties at low-cost.
The goal of the CDC is to fill the need for affordable commercial property in low-income neighborhoods while also finding a use for the properties FINANTA acquires from clients who go bankrupt, according to Erika Tapp, president of the CDC.
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The CDC is able to keep the spaces affordable by acquiring the properties at no cost or low-cost and developing or renovating the property as efficiently as possible. These cost-savings are then extended to the client. Tapp noted that the CDC is still working out an exact formula for making commercial space affordable.
“There are no [Department of Housing and Urban Development] guidelines for how much income a business needs to have in order to be under-served or low-income,” Tapp said.
One of the properties, located at 2530 N. 2nd Street, is currently occupied by Netti’s Laundromat. The business recently transferred ownership from husband to wife due to internal family hardship.
“She’s not an experienced business owner, but its been in the family so she wanted to keep it,” Tapp said. “FINANTA is helping her figure out how to run a business, and I stepped in to figure out how to get the building renovated so she can generate a bit more business.”
The first order of business was to install air-conditioning and make some improvements to the interior.The CDC is also looking into renting out the second-floor of the laundromat to another tenant.
Renovated interior of Netti’s Laundromat
The other project now underway, two parcels on the 2200 block of N. 2nd Street, is set to become a business incubator with leasable office space for up to 18 small businesses, entrepreneurs or nonprofits. The CDC projects that the space will create 20 new jobs. Construction is set to begin next September.
FINANTA CDC recently received a $70,000 grant for the incubator project from the Commerce Department because the properties are located within the American Street Empowerment Zone, a special economic zone established by the Clinton Administration’s place-based Empowerment Zone Program.
The project will take inspiration from the FINANTA Center, a shared office space at FINANTA’s headquarters on 1301 N. 2nd Street. The space has seven tenants, including Impacto Latin Newspaper and South Kensington Community Partners. Operating out of the space is affordable, around $300 per month, while also giving tenants easier access to FINANTA’s services.
FINATA CDC has two more properties on the 2100 block of Front Street, but plans are still in development.
A Cooperative Approach
Tapp stressed that the CDC’s work is designed to supplement, not replace, the work already being done in the area by other community organizations, such as New Kensington CDC and South Kensington Community Partners.
“We’re not trying to compete with anyone,” she said.
Other CDCs in the area are generally focused on housing and residential services, Tapp said. This seems to be the case across the city, according to the FINANTA CDC website: “A survey of CDCs city-wide revealed that there are precious few projects that provided affordable commercial space, and that there are virtually no CDCs whose mission is focused on business-based economic development.”
In addition, the CDC is not focusing on a single corridor or neighborhood.
“Most CDCs have really hard, fixed geographic boundaries,” Tapp said. “For us, its a much more of a scattered-sites approach.”
Finanta CDC looks at “business-commercial development as a kind of catalyst for overall community improvement,” she said.-30-
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