Importing a Powerful Engine for Economic Development

Ramon Leon LEDC MinneapolisRamón León of the Latino Economic Development Center in Minneapolis, Minnesota developed a Mercado, sparking entrepreneurship and revitalizing a neighborhood.

August 4, 2015


Ramón León grew up in Mexico City, hand-tying springs and tufting cushions in his family's thriving furniture business. Envisioning even greater success for himself, he landed in Minneapolis, Minnesota in 1991 and quickly set up a similar business in a rented two-car garage.

The business prospered and he opened four more. Inspired, other immigrants sought his advice and gradually, his dream took a different turn. First through a political coalition and later through a nonprofit that he founded in 2000, León helped hundreds of Latino immigrants in Minnesota launch and expand businesses, especially in the vintage brick storefronts along Minneapolis' East Lake Street.

The ventures turned struggling dishwashers, truck drivers, maids and janitors into middle class entrepreneurs. Once established, León encourages them to flex their new political muscles by joining boards, task forces and civic groups.

"Everyone possesses talents that if nurtured properly can make them successful entrepreneurs and powerful community builders," he insists.

In Minnesota, he wasted no time expanding his own network. Before the "mountains of ice" had melted his first spring, León, then age 28, had joined neighborhood groups, business groups, and a political club that attracted powerful civic leaders.

By the following spring he had settled into a trendy section of the city. But on Sundays he drove to Spanish-speaking services at a church on the western edge of the Phillips neighborhood.

Neighborhood disinvestment and blight

Just south of downtown, Phillips had its heyday in the 1950s when its main commercial corridor, East Lake Street, glittered with new streetlights, car dealerships, and movie theaters. When an interstate highway bisected East Lake Street in the 1960s, the neighborhood began its decline, resulting in white flight, disinvestment and blight. By the time immigrants from Africa and Latin America streamed into the neighborhood in the 1990s, vacant homes were multiplying and the crack epidemic booming.

Over tamales and coffee following Sunday services, León listened impatiently as fellow immigrants complained about conditions in their new country: not only the crime, but the schools' neglect of Spanish-speaking children, the inaccessibility of medical care, the police harassment, the constant fear of deportation.

Making the case for entrepreneurship

Arguing for entrepreneurship as path to political influence and a better life, he was dismissed as mercenary, he recalls. Business and politics are not topics discussed at Latin American churches, he explains. "We go to church to listen to the priest and gossip."

But in the 1990s, some churches serving Minnesota's burgeoning Latino population gradually became centers of political organizing with support from Interfaith Action. In 1996, León's church joined four others to form the Latino Caucus and León stepped up to chair its Economic Opportunities Committee.

A Mercado is born in Minneapolis

Several members quickly proposed a mercado. In Mexico, every small town and city neighborhood has one, says León. Businesses gather under one roof to sell produce, freshly butchered livestock, flowers, clothing, and leather goods. Many times they co-own the building.

Mercados are powerful engines for economic development, he explains. "Small businesses are incubated there. Owners sell what's produced in the neighborhood, hire relatives and neighbors, and when they move out and buy buildings, they hire more people in the community."

To open a mercado on East Lake Street, the committee would need dozens of businesses ready to launch, not to mention a building.

León drew on his network. One nonprofit offered small business trainings, another loans to those without credit histories. A community development corporation knew the legal steps to organize the mercado as a business cooperative. And another nonprofit agreed to purchase an abandoned warehouse and sell it to the cooperative over time.

One looming obstacle, however, was the U.S. Immigration and Naturalization Service. Many potential owners were undocumented, which could put the mercado at risk of a raid. Through Interfaith Action, the committee met Senator Paul Wellstone (D-MN) who arranged for them to meet INS officials. "Behind closed doors the INS said, 'Don't worry, we want Latino businesses," León recalls. "But if you start selling drugs or illegal documents, we will come and get you.'"

León and his community partners were unphased. They envisioned the mercado as a force pushing illegal activity out, not driving it in.

Incubator for Latino businesses

The Mercado Central opened on East Lake Street on July 31, 1999 with 47 businesses--ethnic restaurants, a butcher shop, a music store, a jewelry store, a florist, a tortilla manufacturer. Its merchants, who came from Peru, Ecuador, Honduras, Colombia, El Salvador and Mexico, displayed their goods in stalls around a vibrantly hued mall hung with papel picado banners. The Archbishop gave his blessings, live bands played salsa and mariachi and over 4,000 people flooded the mall and the parking lot.

"There was not anything like it in Minnesota anywhere," says León, who remembers feeling "relieved, exhausted and proud" that day yet also "anxious whether businesses would survive." But by January, sales grossed well over $800,000. Meanwhile, León's Economic Opportunities Committee had been steering other aspiring entrepreneurs towards the same services offered to those in the mercado.

In 1991, there wasn't a single Latino business in Minneapolis, according to León. "I ordered my tortillas from Chicago."

But between 1996 and 2000, along a 4.8 mile stretch of East Lake Street, a total of 300 Latino businesses opened, about 80 percent of them with support from the committee. The new businesses lit up darkened storefronts, attracted foot traffic and drove off crack dealers and prostitutes.

Igniting a movement

With continuing demand for small business support, León founded the Latino Economic Development Center in 2000 and became its president and CEO.

Igniting an economic development movement among Latino immigrants is his dream now, and one that he shut his own five businesses in 2003 to pursue.

Small business development is one of the Center's goals. To date the nonprofit has helped more than 400 Latino businesses open or expand. The menu of services includes 30 different workforce development classes, one-on-one counseling for aspiring entrepreneurs, technical assistance for existing businesses and start-up loans.

As businesses succeed, he encourages owners to give back to the community through another Center project, the Latino Scholarship fund. Each year it awards $3,000 college scholarships to about eight low-income Latino youth.

Developing new public markets is a another key strategy. In 2004, the Center teamed up with three nonprofits, including one supporting African entrepreneurs, to stop the city from placing a national chain in a vacant Sears building. Insisting that small businesses would better spur the local economy, the coalition won support to create an $18 million internationally-themed indoor market. Opened in 2007, the Midtown Global Market on East Lake Street draws 30,000 shoppers a week. Among the 50 groceries, restaurants, bakeries and unique gift shops are businesses that got their start at the Mercado Central, but grew too big for their stalls.

Defining success locally and nationally

Some of the Mercado's original owners have made it really big, grossing over $3 million annually. One now sells his tortillas throughout the Midwest while another owns five restaurants. A third sells his tamales to groceries across Minnesota and employs more than 60 people.

"They were low-wage workers," notes León. "Now they own nice homes, play golf and send their children to college."

But León says he won't be satisfied until Latino businesses gross tens of millions and employ hundreds of Minnesotans of every ethnicity. Towards that end, he's raising funds to expand his loan pool from $3 million to $20 million. He also hopes to tap into "a more sophisticated network of business consultants" to build his clients' expertise.

Lation Economic Development Center Minneapolis board of DirectorsNationally, he's pursuing that goal through the National Association for Latino Community Asset Builders, of which he is a founding member. The group raises funds to support Latino business creation, job training and affordable housing across the country.

As Latino businesses move from tiny stalls and storefronts to regional enterprises, and one day, to the Fortune 500 list, they will build not only their own wealth, but the wealth of the nation, he says. "That will eradicate the false perception that we are a burden to this society," León insists. "We are not. We are contributors."

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