The CORE Project: An Effort to Preserve Small Businesses in Gentrifying Neighborhoods

By Marco Covarrubias

“We don’t own anything!”

Earlier this year, a video went viral of the activist and author Kimberly Jones standing in a boarded up commercial corridor in the wake of the George Floyd protests. In six short minutes, Jones rebukes the public’s misguided focus on “looting” during the uprisings. She reminds us that this country was built upon the genocide and enslavementof Indigenous and Black people. She reminds us that when Black and brown people have managed to build wealth, it was taken from them. 

“How can we win?” Jones asks us. “We don’t own anything!”

How do we build wealth on land we don’t own? What future do our communities have if the most vulnerable residents and entrepreneurs are tenants with no pathway to ownership over the buildings in which they raise families and build businesses? 

It is clear to us that we must find ways to put more property into more peoples’ hands. Ownership doesn’t solve everything, but ownership provides a foothold to stability. In a recent LA Times story on the pandemic’s impact on small businesses, the owner of Frank & Musso admitted that despite the pandemic ravaging his business, he feels like he’ll make it because he owns the building. 

In the spirit of exploring ways to increase ownership, Inclusive Action is announcing it’s newest project: Community Owned Real Estate (CORE). 

CORE is a collaborative effort between our organization, East LA Community Corporation, and Little Tokyo Service Center. Together, we’ve taken five properties off the speculative market with the goal of preserving existing small businesses and creating stable, commercial space for community-based businesses and organizations. 

We acquired the properties last year and we are currently rehabilitating them and finding new businesses and organizations to join our 15 current tenants, which include Latinx with Plants, Dulceria Seis Oriente, Las Fotos Project, LA Altar Tattoo Studio, Faded City Barbers, and a host of other small businesses.

Most exciting of all is CORE’s long-term plans for the project: Our vision is that the tenants will become the owners.

Over the next ten years, we will work with these tenants to prepare them to join the CORE ownership group. We believe this will provide a new model for keeping wealth and land  in the hands of community members and prevent large corporations from using commercial real estate to extract value from communities facing gentrification and displacement.

The COVID-19 pandemic and economic crisis has further highlighted and more thoroughly entrenched the chasm between who does and who doesn’t own land. Despite the limited eviction protections that exist, many advocates and experts are warning of a “tsunami” of evictions in the coming months. This impending catastrophe will not only impact residential tenants, but thousands of small business owners who are losing customers because of the pandemic and are struggling to pay rent. Yelp’s most recent Local Economic Impact Report states that, as of August 31st, 163,735 businesses on Yelp have permanently closed since the start of the pandemic. One out of every five businesses will be gone because of COVID-19; many of these businesses had minimal assets to rely upon, and many were tenants who couldn’t keep up with their rent.

We believe that projects like CORE, which seeks to preserve small businesses in neighborhoods vulnerable to gentrification, is an important model that should be considered as we recover.  The acquisition of the five properties that currently make up CORE’s portfolio highlighted key variables that all community-driven real estate projects should consider; a mission-driven lender like Genesis LA who was willing to work side-by-side with community groups, philanthropic partners like the California Endowment, Weingart and Citi Community Development who deferred to community expertise, and the partnership between not one or two, but three organizations who leveraged their collective resources to get this done (We’ll write more about this soon).

Yes, preserving our communities will require collective approaches to ownership. We believe that the CORE Project can serve as a model for how cities, community organizations, and small businesses can work together to take commercial real estate off of the speculative market so those entrepreneurs and nonprofits have an opportunity to stay in the communities they serve.

We’re excited to share more with you as the project develops. Stay tuned for our next post on what we’ve learned so far from this project!