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University of Minnesota Extension

Economic impact of proposed food entrepreneurship incubation center in North Minneapolis

Northside Economic Opportunity Network (NEON) building in North Minneapolis, Minnesota.

Key findings

  • Construction impact: NEON estimates construction of the food entrepreneurship incubation center will cost $12.5 million.
    • This includes $8.2 million in labor income for 261 workers whose jobs will be supported by the construction.
    • Including indirect and induced effects, the construction will generate an estimated $19.0 million in economic activity.
    • The model estimates $615,415 of state and local tax revenues will be collected due to the construction.
  • Operations impact: The direct effect of the proposed incubation center is an estimated $14.8 million in output and 205 jobs.
    • With indirect and induced effects, operations of the center will generate an estimated $26.2 million in economic activity, including $10.9 million in labor income.
    • The center will support an estimated 265 workers.
    • Operations of the proposed center will bring in an estimated $1.1 million of state and local tax collections annually.
    • During a 10-year period, the food center will generate $28.11 in economic activity for each dollar invested in construction.
  • Local economy benefits: Much of North Minneapolis is a food desert with limited access for residents to affordable and healthy food. The food entrepreneurship incubation center would help alleviate this issue, plus create economic development opportunities for residents of the area.

About this report

The Northside Economic Opportunity Network (NEON) has been pursuing its mission “to build wealth for low- to moderate-income entrepreneurs in North Minneapolis and surrounding communities” for more than a decade. NEON’s current portfolio includes technical assistance, business advisory services, and grants and loans. In 2020, NEON provided 6,780 hours of technical assistance to more than 1,350 clients — more than double its service in 2019. Forty percent of its clients are food entrepreneurs.

The increase in demand has led NEON to consider future plans for growth and development. One goal is to develop a food entrepreneurship incubation center to provide a reliable and affordable facility for NEON entrepreneurs to start and grow their businesses. The food incubation center will have multiple service levels, including dedicated kitchen space, shared commercial kitchen space, business services, space for pop-up stores and farmers markets, and an event space.

NEON will use the food incubation center to continue to offer services to clients. It will offer training and educational programs focused on food preparation and safety, marketing, financing, and accounting at the center. As NEON moves forward to raise funds for the food entrepreneurship incubation center, the company was interested in understanding ways the center could potentially contribute to the economy of North Minneapolis. University of Minnesota Extension conducted a study of the economic impact of the proposed center. 

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Authors: Brigid Tuck, senior economic impact analyst; Eric King, Extension educator

Reviewed in 2022

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