Madison officials are pushing forward a program to help minority-owned businesses own, rather than rent, commercial spaces.
It’s called the Commercial Ownership Assistance program. And it will provide $500,000 in forgivable loans to help minority businesses grow. The businesses would not have to repay the loans unless they sell their property.
On Wednesday, the city’s Economic Development Committee unanimously approved the program. If approved by the full Common Council next month, the pilot program will launch later this year. And the budget could be expanded in the next fiscal cycle.
According to city officials, 27% of people in Madison are people of color. But less than a tenth of businesses are owned by people of color.
Alder Samba Baldeh, who is Black, represents Madison’s north side. He’s also a business owner.
Alder Baldeh co-sponsored the budgetary amendment and pushed to include the program in this year’s budget. He says property ownership is one of the biggest hurdles minority business owners face in Dane County.
“In many cases, people of color struggle with capital. They struggle with owning property, with assets,” he says. “After reaching out to businesses, I realized that if it comes to property ownership, the black community is struggling. You can rent a property and own a business there, but the landlord or the property owner can always increase rent, or sometimes they’ll sell the property.”
Alder Baldeh says the distribution method for the loans has yet to be determined. But, he says a complicated approval process could turn people off to the program. So he’s aiming to keep applying as simple as possible.
“I do not want the process of accessing this money to be too cumbersome to the extent that it does not serve the community for which it is designed,” he says.
In a press release announcing the proposal, Mayor Satya Rhodes-Conway wrote, “This is a good first step to support wealth-building and also to help prevent displacement in our communities, especially in neighborhoods at risk of gentrification. It is one of numerous steps we must take to fully address the disparities in our community.”
The city collaborated with several minority chambers of commerce while drafting the proposal. Camille Carter is the President of the Madison Black Chamber of Commerce. She says they hope to continue being a part of the process going forward.
“Certainly we are in support of Black entrepreneurs owning property and having equity stake in their business,” she says. “When we own our businesses, our homes; we are better taxpayers, a better service to the community and there’s just a great deal more synergy built on a solid foundation. This program will really allow businesses to do just that.”
The new proposal comes as independent, Black-owned businesses throughout the country are experiencing a surge in business. According to a recent report from American Public Media, viral social media posts listing black-owned businesses by state are driving new customers to the establishments.
Madison’s Black Chamber of Commerce lists Black-owned businesses on its website.
But, the support both nationally and locally comes too late for many Black-owned businesses. According to a report from Stanford University, 40% of America’s Black businesses have permanently closed due to COVID-19. Nationally, less than twenty percent of white-owned businesses have closed as a result of the pandemic.