New Markets Tax Credits: Seward Co-op

Sean Doyle has been Seward Co-op’s Off Site Link general manager since 2004. But his experience with the store dates back more than three decades.

Doyle was introduced to the cooperative when his then-partner and now-wife got a job there in 1989, when the couple moved to Minneapolis from Wisconsin. But it wasn’t just the idea of fresh produce and locally sourced meat that intrigued Doyle.

“It was very much aligned with my personal values,” said Doyle. “I didn’t want to have my life energy going into the pockets of the haves.”

Seward is the oldest co-op in the Twin Cities and has a store on Franklin Avenue as well as its Friendship store, located on East 38th Street. Under the cooperative model, Seward’s members – those who shop at the store – own the business and have a say in its operations.

Cooperatives became popular in the early 1970s and represented an alternative to corporate America’s grocery store chains. The movement was a radical one, and at times tensions between cooperatives became high during the so-called “co-op wars.”

Seward, for example, was forcibly taken over in 1976 by the Co-op Organization, a group of activists who believed in using the store for social reform instead of just selling natural foods. The CO was also suspected of throwing a Molotov cocktail into one cooperative and firebombing a delivery truck.

The Seward Co-op is one of the only food cooperatives in the Twin Cities that survived those turbulent times.

Today, while much has changed, the founding ethos of the cooperative model and consumer ownership remains.

“My hope and desire and dream is that this is a way forward to operate in a market economy that isn’t driven by capitalism, but by community wealth and community ownership,” said Doyle.

Driving Economic Development

Seward completed work on its Friendship Store in 2015, in large part with funding from the New Markets Tax Credits (NMTC) program, an economic development initiative managed by the U.S. Treasury.

The NMTC program allows Community Development Entities (CDE) to apply for tax credit allocations through the Community Development Financial Institutions (CDFI) fund. If a CDE receives an allocation, it can then sell those tax credits to investors and put sale proceeds towards economic development in low-income areas.

Sunrise Banks has been involved in the NMTC program as a CDE since 2013 and has been awarded $303 million in federal allocations to date.

The NMTC program is intended to bolster economic development in low-income communities. In particular it looks to drive positive community impacts such as job creation, commercial goods and services, community services, food desert elimination, and environmentally sustainable outcomes.

According to the Treasury, the NMTC program has created or retained more than 830,000 jobs; in addition, almost 75% of investments have been made in highly distressed areas.

The Friendship Store is located in what the United States Department of Agriculture deems a food desert. Building the store, which offers locally sourced and healthy foods, provided more food security in the neighborhood.

Seward’s Friendship Store is a 22,700 square foot building located at 317 East 38th St. in Minneapolis. The building was funded by NMTC financing from Sunrise Banks and the Midwest Minnesota Community Development Corporation. The NMTC transaction successfully unwound in 2021.

“We are proud and grateful to have been able to put this allocation to good use for Seward Co-op and their surrounding community. The project created accessible quality jobs and has ensured access to healthy food for a distressed neighborhood,” said Sunrise Banks VP of New Markets Tax Credits Mary Stoick. “Impacts like these are at the heart of the mission of both the NMTC Program and Sunrise Banks.”