Businesswoman pens 'how-to' on dealing with the city

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April 25, 2007
By: Sarah McKenzie
Sarah McKenzie

Some see Elliot Park as a neighborhood without a hangout. However, a woman with a plan for a new coffee shop/cultural center is about to change that -- as soon as she's finished jumping through a long series of business-startup hoops.

While The Band Box is a breakfast and lunch staple, the small 729 S. 10th St. diner closes by 4 p.m. And although the park itself, 1000 E. 14th St., is a magnet for teenagers, most residents usually look northwest toward Downtown's entertainment district for nightlife.

"It's 'Business 101,'" said Sharon Kanan (who goes by Shar), who sensed this community need and business opportunity soon after moving back to Elliot Park from California in June 2003. "Find a need and fill it, and do it with integrity. I want a place to hang out that appeals to everyone."

Now, along with music publisher Diane Ingram and blues guitarist Lonnie Knight, Kanan is planning to open EP Atelier, a new coffee shop/used bookstore/music venue, at 609 S. 10th St. late August.

Although the business partners are excited to open what they hope will become a true community spot, even Kanan, who is also an administrator with Elliot Park Neighborhood, Inc. (EPNI), was surprised by how complicated the process of opening even a small coffee shop could be.

With the help of some savvy fellow entrepreneurs and EPNI, the EP Atelier team made it through, but their story illustrates the challenges entrepreneurs face when trying to open a business in an up-and-coming but older, urban community such as Elliot Park.

Tailored to the market

Kanan and her partners envision EP Atelier (French for "artist studio" and pronounced at-L-YAY) as a gathering place for artists, writers and musicians and others in the neighborhood -- somewhere people can walk to from school, work or home. About 50 percent of Elliot Park residents don't own a car, said Katie Hatt, an economic development coordinator for EPNI, so adding more retail to the neighborhood has been a top priority.

Now the nightlife is pretty bleak, said Kanan, who lives within walking distance of EP Atelier, "There is no destination point whatsoever. It's sort of like a movie set -- not a real neighborhood." Soon the coffee shop will double as a local music venue, one more intimate than Downtown's larger clubs.

After interviewing workers at Hennepin County Medical Center, 701 Park Ave.; North Central University, 910 Elliot Ave.; and

neighborhood families, among others, Kanan and her partners determined there were plenty of others who felt like they did -- they would have enough customers to support the business.

They also won the support of the community organization. At its July 12 meeting, the EPNI Board of Directors approved a loan up to $36,000 from its Small Business Revolving Loan Fund for the coffee house.

The entrepreneurs also plan to apply for a private loan to support their new business.

Tom Reid, executive director of EPNI, said the organization will work to match entrepreneurs with the resources they need to get their ideas off the ground.

"In light of the city's reorganization and diminished resources, it is sometimes difficult to know where the resources lie and whether they will continue to be available to potential small business owners," he said. "As new resources become available, we are likely to hear of them and add them to our toolkit of assistance we can connect people to."

Even with the community's backing, however, the entrepreneurs have found the startup process to be challenging and costly. Kanan estimated that the project has cost approximately $160,000 thus far: including more than $50,000 in interior renovations (adding new sinks and tearing out old rotten wood); $10,000 in filing fees, permits, insurance and licenses, and about $100,000 set aside for first-year operating expenses for infrastructure for wireless Internet access, among other things.

All partners have invested in the project, but it's a sole proprietorship under Ingram's name.

"Over the summer [2003], we started talking numbers. By August, we had a business plan. The neighborhood embraced it. It was going to be easy," Ingram said. "And then reality set in."

Rehabbing retail

Elliot Park, the neighborhood, is undergoing a major construction boom, primarily in residential property. New condo towers will ring EP Atelier and its neighbor, Gallery Atitlan, which opened this spring and specializes in indigenous art. The 27-story Grant Park Tower, 500 E. Grant St., is nearing completion, and construction on another 26-tower, Elliot Park Lofts, is expected to start this fall. Other developers are focusing on rehabs of the neighborhood's historic brownstones, such as the Lenox at Portland Avenue & South 9th Street.

But for all the new housing, the neighborhood is still short on retail. There are vacant commercial spaces in Elliot Park, but some require significant renovations and repairs to make them more attractive to tenants.

This will be the first business going into an old space in the neighborhood, said Hatt, who plans to work with Kanan on a handbook on how to start a small business. Most retail opens in new developments, such as the East Village Dunn Bros, 811 11th Ave. S.

After a potential space is identified, the entrepreneurs must take it through the next step: the zoning and

inspections process. (See sidebar, page 13, on the EP Atelier timeline.)

Kanan and her partners found it frustrating to navigate such financial, physical and paperwork obstacles, but they have been steadfast in their determination to launch EP Atelier. Teamwork was crucial, noted Ingram, "It's hard to stay excited about a project that keeps stalling in bureaucracy. If any of us had attempted to do this alone, we would have given up."

Kanan, Ingram and Knight decided to bring in entrepreneurial reinforcements and enlisted the help of two 26-year-old entrepreneurs and Minneapolis residents, Nate Smith and Tom Menke. The pair had recently made the news for making a garbage house in the Wedge neighborhood just southwest of Downtown into one of the nicest properties on the block, and then selling it for a nearly $200,000 profit.

Smith and Menke, University of St. Thomas graduates, had recently formed Urban Projects LLC, a company that focuses on restoring old properties for housing. Now Urban Projects is serving as EP Atelier's general contractor.

Before forming Urban Projects, Smith studied entrepreneurship in college and ran a small painting business on the side; Menke had majored in urban geography and ran a sprinkler business. Smith said working in Elliot Park on the coffee house has been rewarding, "Our heart is in that neighborhood. . . It has so much potential."

For Smith, navigating the city's process has become easier with each new project, especially with the advent of the city's One Stop shop -- a new clearinghouse for planning and development projects located in the third floor of the Public Service Center, 250 S. 4th St., designed to streamline the application process by having representatives of different departments in one room (fire, health, licenses, inspections, etc.).

Bob Lind, manager of business finance for the city's Community Planning and Economic Development department (CPED), said he is working on revising the city's guide to starting a small business in light of the new One Stop service.

He stressed how important it is for people who are interested in starting a small business to check into Minneapolis One Stop to get an idea of the process they face and ensure their intended use meets the zoning code, among other things, before charging ahead with their ideas.

Kanan said she hopes the guide she is working on with Hatt will be published by years' end. The guidebook will cover startup basics and outline more detailed steps on navigating the city's inspection process.

For more information on EP Atelier's progress, check www.epatelier.com.

For more information on Minneapolis One Stop, call the city's Inspections Department at 673-5800, or Licensing Department at 673-2080 or log onto www.ci.minneapolis.mn.us/onestop/.