How a real estate planner pushed his struggling startup during the pandemic
After two years working in coffeeshops, in early 2020 prospects were looking for D’Angelos Svenkeson and his commercial real estate and planning startup, NEOO Partners, just before they got terrible.
Comprised at the time of St. Paul-born Svenkeson and co-founder of North Minneapolis-based Denetrick Powers, NEOO Partners had just landed a key contract with Ramsey County and the Center for Economic Inclusion to coordinate outreach to the community around the county’s long-term planning.
Then the pandemic hit, and that contract was the only active project they had left on their slate. With business prospects on hiatus, they have been narrowed down to one customer.
“I said, ‘This is the toughest year we’ve ever had,'” said Svenkeson, who runs one of the few black-owned planning and real estate firms in the Midwest. “We survived the loss of 90% of our income in 2020. As a man of faith, I say it is only thanks to God that we can do what we are doing now.
“TO RENEW THE SPIRIT”
And compared to the scorching days of 2020, NEOO Partners is doing much more than either of the two men – both former Thor Construction property managers – could have expected.
The economic development projects that keep their team busy range from the Victoria Theater and the subway’s “purple line” in St. Paul to reconstruction efforts in George Floyd Square and along Lake Street in Minneapolis. Further afield are waterfront plans in Rochester, Minnesota, a housing and retail project in Brooklyn Center, and upstate in Mississippi, where Svenkeson went to graduate school.
NEOO is short for “Ananeoo”, which comes from Ephesians in the Greek New Testament and means “to renew the mind”. With a bumper new crop of customers, it’s as fitting a title as any for the time of transformative change their small business is going through and trying to activate for others, some of whom are in dire straits. These days, they’ve barely had to market themselves. Most of their customers are inbound.
Svenkeson recently ditched his coat and tie, changed into comfortable sportswear, let his formerly cropped hair grow long and moved upstairs in the Osborn Building 370 on Wabasha Street in downtown of St. Paul.
NEOO Partners, which just over a year ago employed only the two founders, needed to make room for its eighth and ninth employees: Menaka Mohan, former senior urban planner for the city of Saint-Paul, and l estate agent Dionne Gharamu-Nrumaachi. , former head of the city’s housing project.
After losing 90% of his paying customers/revenue in 2020, why is this man smiling? For the same reason, he ditched the coat and tie and just hired 7 or more employees…including Menaka Mohan, a former senior city planner in St. Paul. pic.twitter.com/LsuXq88OJV
— Frederick Melo, journalist (@FrederickMelo) February 18, 2022
There’s nothing exotic or unfamiliar about little customers going through hard times for Svenkeson, whose grandfather moved to St. Paul from the Deep South to drive buses for Metro Transit. The same goes for Powers, who got his start professionally as a community organizer organizing art festivals with his uncle in North Minneapolis.
In fact, figuring out how to reach people in need has become something of a business card for their startup.
COMMUNITY ENGAGEMENT, REAL ESTATE ANALYSIS
Among their recent ventures, NEOO Partners will lead community engagement and a real estate development analysis of areas surrounding 17 of the 22 future transit stations that will border the Purple Line, a bus rapid transit corridor that could expand from downtown St. Paul to White Bear Lake. This analysis, conducted on behalf of Ramsey County, will examine everything from potential housing to commerce.
“We’re part of a really big team, but this is a big project,” Svenkeson said, noting that they’ve teamed up with engineering consultants Toole Design and three other companies to answer the call. Competitive offers from the county.
They are also working with the City of Minneapolis on infrastructure planning around East 38th Street and Chicago Avenue, commonly known as George Floyd Square after the man who was murdered by a Minneapolis police officer in May 2020.
Through a contract with the Lake Street Council, NEOO Partners has helped some 27 businesses along Lake Street heavily impacted by riots and arson find suppliers and secure funding for reconstruction efforts.
“A lot of them aren’t capitalized to rebuild what they had,” Svenkeson noted. “Much of the property has been depreciated, where construction costs would exceed replacement value. This was to help them properly size (their plans) and understand what funding sources are available. … We haven’t seen a capital investment landslide.
FROM RICE STREET TO DALE STREET
Among the limited funding sources that have emerged, they have been able to direct business owners to Sunrise Banks and New Market Tax Credits, a type of federally authorized investment tool for neighborhoods. low income. The city of Minneapolis has been able to help at least a handful of homeowners through its Commercial Real Estate Development Fund, which offers 40-year repayable loans to homeowners who agree to stay in place long-term.
“It’s a really, really catalytic tool to encourage local ownership of a project,” Svenkeson said. “It covers 20 to 30% of the cost of a project. It’s a tool that we can’t wait for Saint Paul to adopt. We hope St. Paul can do something like this because University Avenue still has a lot of displaced owners.
In Saint-Paul, “it is also about people who are trying to enter the avenue”, he added. “Rice Street to Dale Street, there’s a whole corridor that seems a bit sleepy right now that could be activated with (new) community businesses and community landlords.”
Four landowners along Lake Street have hired NEOO Partners to continue as real estate consultants, including the owners of the Odd Fellows building, which once housed the El Nuevo Rodeo nightclub.
“In July 2021, it all started to click,” Svenkeson said, gesturing to Powers, who secured enough contracts last year to keep nine workers fully occupied for more than 18 months. “From July to December, he booked all of 2022 and into 2023.”
If business is improving compared to 2020, what has changed?
Among municipal customers, there is a growing realization that traditional community engagement around transit and economic development has not always been embraced by residents and small business owners, particularly in communities of color that may not be closely tied to City Hall.
“Business development for us has been 99% internal,” Svenkeson said. “People have contacted us because we have been successful with our clients.”
NEOO’s approach, Svenkeson said, is to include non-financial assets when analyzing how a business fits into the bigger picture of a trade corridor. For example, bulldozing a beloved ethnic restaurant to make way for a transit corridor is unlikely to win over local residents, boost small businesses, or help promote the project to the general public, unless it does. restaurant cannot be integrated in one way or another into a new mixed business within the project.
Powers said relationship building is a big part of raising awareness in neighborhoods used to feeling their priorities have been ignored.
Tawanna Black, founder of the Center for Economic Inclusion, recalled that she relied on NEOO during the pandemic to organize community engagement around Ramsey County’s 10-year economic competitiveness and inclusion plan. When the pandemic hit, Svenkeson and Powers abandoned their “street team” approach and had to switch to an online format they had assembled.
“It was about two entrepreneurs getting into a project, and really appreciating each other’s expertise, and taking the leap together,” Black said.
The Center for Economic Inclusion plans to connect Black and Latino entrepreneurs enrolled in its upcoming business accelerator to NEOO Partners for guidance in analyzing real estate prospects for potential brick-and-mortar storefronts. Svenkeson said far too often new small businesses are locked into long predatory leases that burn through their seed capital when they need it most.
The center also plans to work with planners on a fledgling effort to help black business owners buy the storefront properties they rent.
Svenkeson, who grew up in St. Paul and played football for Central High School, prides himself on being the numbers guy at the company, with a focus on real estate finance. He spent nearly three years as vice president of development at Thor Construction after earning his master’s degree in urban and regional planning from Jackson State University in Mississippi.
Powers, a former development manager at Thor, co-founded a bow-tie e-commerce company, served as a transit organizer for the Harrison Neighborhood Association and earned a master’s degree in city and regional planning from the Humphrey School of Public Affairs. from the University of Minnesota. .