Target Corp. said Monday that it will provide low-cost space vacated by failed Thor Construction in 2019 at the Regional Acceleration Center (RAC) in north Minneapolis to Summit Academy OIC, the nearby job-training nonprofit that needs additional space.
Target will finance Summit Academy expansion in north Minneapolis
The retailer will help finance Summit Academy's expansion in space vacated by Thor Construction.
August 3, 2020 at 11:00AM
"We've invested in north Minneapolis to support a strong quality of life for families in the neighborhood, and the Regional Acceleration Center is an important part of that investment," said Target CEO Brian Cornell. "With expertise in helping Black families and other residents overcome social and racial inequities … we're proud to welcome [Summit] to the RAC to work together to advance racial equity in our hometown."
Summit Academy, which trains high school graduates for careers in health care, technology and the building trades, will operate the North Star Innovation Center in the additional space at N. Plymouth and Penn avenues. It will get a five-year lease, including no rent in the first two years and below-market rent for the 17,000 square feet in the final three years.
Summit aims to raise about $8.5 million to buy the space under a purchase option. CEO Louis King said about $4 million already has been pledged for the purchase. "This will open the doors of the middle class for this community," King said. "The North Star Innovation Center will be an inspiring and transformative place where Black men and women will build new opportunities for themselves and their families. Alongside Target and the North Side community, we're taking action against racial inequity."
Summit Academy, which plans to open the innovation center for classes next February, has been squeezed for space at its existing campus less than a mile south on Plymouth Avenue. Summit Academy can no longer train nearly 1,000 adults each year because of the COVID-19 spacing restrictions.
Mostly low-income minority students attend Summit without out-of-pocket tuition or student loans. Summit's fiscal 2019 revenue of over $8 million was funded largely by private philanthropy and public grants.
In 2019, Summit placed 424 graduates in jobs that paid an average of nearly $17 an hour. A study conducted in 2017 by Rainbow Research found that Summit-placed students maintain a job retention rate of 82% over a three-year period.
Thor Cos. is still listed as the owner of the fourth-floor RAC space in Hennepin County property listings. In 2018, Thor said it was investing about $12 million, primarily through a mortgage, in the $36 million building. However, Target already was a building investor to assist minority businesses such as Thor and MEDA, the minority business counseling and financing nonprofit that has expanded in recent years.
Hennepin County has invested about $26 million in the building and most of an adjacent parking ramp built partly to serve its nearby NorthPoint Health clinic across the street. The 2018 Thor financing was arranged by LISC, the national, private-nonprofit lender supported by banks, corporations and foundations, that helps finance commercial and residential projects in low-income neighborhoods. LISC has not responded to recent inquiries about the details of the Target-Thor deal.
Thor, once the state's largest minority-owned firm, collapsed in early 2019 after Sunrise Bank moved to collect a $3 million loan on which Thor's owner was in default.
Target said its stepped-up commitment to the North Side and to minority training and entrepreneurship is the latest step to address systemic racial and poverty issues. Target recently announced it would provide $10 million to advance social justice and support riot-recovery efforts, and also pledged 10,000 hours of pro bono consulting services for Black-, Indian- and other people of color-owned small businesses in the Twin Cities to help them rebuild.
Target has invested more than $11 million over the last decade, working with partners such as the Northside Achievement Zone (NAZ), Northside Economic Opportunity Network (NEON) and MEDA to create opportunities for the community and increase its economic vitality.
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