2012 ANNUAL REPORT

From our offices at University and Dale in Saint Paul, the Green Line of the Light Rail Transit System has been a focal point of our daily scenery. Last year’s construction was replaced with this year’s testing – and next year we should be seeing passengers on trains.

NDC’s U7 Program worked closely with over 400 small business owners on University Avenue during construction. We helped build their brand, website and financing base strong enough to survive construction and thrive in the future.

This is just part of NDC’s impact, as our biennial Wilder Research April 2013 reports:

Thank you for allowing us to help revitalize neighborhoods and improve our community for the past 20 years.

Sincerely,

Steve Gibson, Board Chair Mihailo Temali, Founder & CEO

BOARD OF DIRECTORSAsad AliweydExecutive Director, New American Academy

Kate Barr, Board TreasurerExecutive Director, Nonprofits Assistance Fund

Muffie GablerSenior Vice President, Wells Fargo

Steve Gibson, Board ChairSenior Vice President, US Bank

Douglas GregoryRegional Vice President, The Travelers Companies, Inc.

Leigh-Erin IronsSenior Associate, Fredrikson & Byron, P.A.

Grover JonesExecutive Director, NEON

Repa MekhaExecutive Director, Nexus Community Partners

Ed Padilla, Board Vice Chair President & CEO, NorthMarq Capital

Arvid Povilaitis, Board SecretaryChief Operating Officer, Meritex Enterprises, Inc.

Dennis PrchalPresident, Western Insurance Agency

Vivienne Williamson, Board Vice ChairOwner, Mighty Stitch, LLC

Noya WoodrichPresident & CEO, Greater Minneapolis Council of Churches

COMMUNITY ADVISORSWafiq FannounExecutive Director, Islamic University of Minnesota

Tony GeniaCommunity Liaison

William SandsFormer Chair, Western Bank

TRAINERS &CONSULTANTSShahir AhmedJason AllenDave BonkoIsabel ChanslorTony GeniaWendy HinesGene JohnsonGrover JonesMary KuriaClaudia OstermanIbrahim MohamedTrokon PagePhillip PorterAlfred SesayJoanne SimonsSai ThaoRomaine TurnerKim UrbanNou VangTeshite WakoDale WhiteKirsten Zache

STAFFAdjoa Akofio-SowahTraining Program & Communications Coordinator

Jeff AlexanderMidtown Global Market Director

Dear Friends and Partners of NDC:

Darrell BeaufordReal Estate Accounting Manager

Daniel BirruAccountant

Isabel ChanslorU7 Project Manager

Krystal CooperTraining Program Administrator

Elizabeth (Becky) GeorgeMGM Operations Manager & Loan Officer

Kimberly HannaMGM Market Coordinator

Richard HofacreMGM Maintenance & Repair Manager

Harvey HoffmanBuilding Operations Manager

Ryan KidderNDC/U7 Lead Graphic Designer

Mike LaFaveVice President & Chief Operating Officer

Earlsworth (Baba) LetangMGM Market Manager

Perla MayoLoan Officer

Maren MisnerTraining Program & Communications Coordinator

Kathy MoriartyTraining Director & Chief Administrative Officer

Sara Joy ProppeSpecial Project Coordinator

Christopher RohrReal Estate Project Manager

Samir SaikaliGrants & Data Manager

Dean SanbergResource Development Director

Brian SingerLoan Department Director

Emma SpillmanTraining Program Coordinator & Office Manager

Mihailo TemaliFounder & CEO

Sai ThaoLoan Officer

Michael ThielenLoan Fund Administrator

Romaine TurnerSenior Lending Officer

Teshite WakoChief Financial Officer

Pangia VangSmall Business Consultant

THE MISSION OF NDC IS TO EMPOWER ENTREPRENEURS AND COMMUNITY PARTNERS TO TRANSFORM LOW-INCOME NEIGHBORHOOD ECONOMIES FROM WITHIN

PARTNERSHIP.COMMUNITY PARTNERSHIPS ALLOW US TO EARN THE TRUST OF LOCAL ENTREPRENEURS

POWER OF CULTURE.HIGHLY ACCESSIBLE, MULTI-CULTURAL SERVICES ELIMINATE BARRIERS TO SUCCESS

COMMUNITY OWNERSHIP.WORKING AT SCALE CREATES SOCIAL CAPITAL AND PHYSICAL ASSETS THAT COMMUNITIES OWN

COMMITMENT.COMPREHENSIVE, FLEXIBLE, LONG-TERM SUPPORT HELPS ENTREPRENEURS SUCCEED IN A CONSTANTLY CHANGING ENVIRONMENT

INNOVATION.IMPROVEMENT AND INNOVATION, FUELED BY REGULAR EVALUATION, LEAD TO OUR SUSTAINED EFFECTIVENESS

OUR VALUES

OUR OUTCOMESECONOMIC IMPACT. $73 million is returned by NDC entrepreneurs each year to the Twin Cities regional economy, and $46 million of that is returned to inner-city neighborhood economies.

NEIGHBORHOOD IMPACT.NDC entrepreneurs hire 53% of their employees from their neighborhood, 74% of whom are persons of color, at an average wage of $12.41 per hour.

JOBS. NDC’s estimated 457 entrepreneur businesses provide jobs for over 2285 neighbors, with a combined annual payroll of over $24 million, at a programmatic cost to NDC of $4,900 per job.

REVITALIZATION. 60% of NDC alumni businesses occupy a building that was formerly vacant, and 57% are in spaces that were rehabbed for the business.

LEADERSHIP. 90% of NDC entrepreneurs say they serve as role models for youth in their communities, and 39% as leaders in groups in their communities.

NDC works in eight ethnic communities and four historically underserved communities in the Twin Cities:

In 2012 NDC expanded its programs to low-income suburban communities in:

African Career, Education & Resource Inc. African Community ServicesAfrican Economic Development SolutionsAmerican Indian Community Development CorporationAurora/St Anthony Neighborhood Development Corporation Bii Gii Wiin CDLFCity of MinneapolisCity of St. PaulCooperativa Mercado CentralDayton’s Bluff Community Council East Side Neighborhood Development CompanyEmerge Community Development Employment Action Center Episcopal HomesFamily PartnershipFredrikson & Byron, P.A.Greater Frogtown CDCHope Community, Inc. Hmong Chamber of CommerceLatino Economic Development Center Lutheran Social Services Metropolitan Consortium Of Community DevelopersMetropolitan Economic Development AssociationMigizi Communications Model CitiesNew American AcademyNorth Hennepin Community College Northside Economic Opportunity Network (NEON) Oromo Community Of Minnesota Powderhorn Phillips Cultural Wellness Center Project For Pride In LivingSeward Redesign, Inc. SparcState Of Minnesota

WHERE WE WORK

OUR PARTNERS

2012 HIGHLIGHTS

NDC HELPS MAINTAIN BUSINESSES ON UNIVERSITY AVENUE

NDC GOES TO DETROIT

NDC EXPANDS TO THE SUBURBS

As this annual report goes to print, NDC is recognizing 20 years of neighborhood revitalization. Building upon the success NDC has achieved in its four key program areas: Entrepreneur Training, Small Business Financing, Small Business Consulting and Small Business Incubators, 2013 will be another year of growth and new opportunities.

NDC’s lead role in U7, the collaborative initiative to help businesses survive and thrive light rail construction along the Central Corridor, was very effective in 2012. Small businesses were supported with technical assistance, new facades were added on University Avenue and the media has drawn increased positive attention to the Green Line. NDC’s model of empowering local neighborhood

entrepreneurs through Detroit’s ProsperUS has shown considerable impact. Two classes graduated in the fall with 17 entrepreneurs and registration for the spring of 2013 will more than triple that number to 60 plus entrepreneurs among seven classes. Also, NDC’s U7 Program work on University Avenue has been shared with Midtown Detroit, an organization formed to support a new 3.3 mile LRT serving commercial districts in the downtown area.

The NDC entrepreneur training expansion to the Twin Cities suburbs has been successful. Community Partners in Eden Prairie and Brooklyn Park include New American Academy, Northside Economic Opportunity Network, African Career Education and Resource, Inc. and North Hennepin Community College. With a demographic concentration of West African, East African and African American entrepreneurs, their combined efforts have produced 41 graduates, including 20 women entrepreneurs, and a total of 36 potential businesses.

NDC CELEBRATES 20 YEARS OF COMMUNITY REVITALIZATION

Graduates of NDC’s first suburban class with NEON & North Hennepin Community College

May Yang, owner of May’s Market on University Avenue, with daughter Tiffany

NDC MEETS CHARITIES REVIEW COUNCIL STANDARDS

NDC is committed to accountability and transparency as demonstrated by meeting all twenty-seven of the Charities Review Council’s Accountability Standards.

Building Neighborhood Economies From Within

2012 IMPACT AWARDSMIGUEL & MARIA ZAGAL - TAQUERIA LA HACIENDAWinner of the Senator Paul Wellstone & Sheila Wellstone Twin Cities Small Business of the Year Award

Minneapolis. Fourteen years later, they own three locations in the Twin Cities, employing more than 70 people from the surrounding neighborhoods. Recognizing the current fads and trends to reinvent the taco, the Zagals remain true to their roots and style, offering traditional Mexican tacos in a community-oriented atmosphere.

SON DAO - HA TIEN GROCERY STOREWinner of the Growth in Revenue Award

Following in his parents’ entrepreneurial footsteps, Son Dao opened Ha Tien Grocery Store on University Avenue

deli and groceries, Ha Tien provides a welcoming gathering spot for the neighborhood. To counter the effects of light rail construction, Son recently invested in major renovations to his store, including facade treatments and adding energy efficient lighting to increase visibility and security for customers.

PASEE & KAY YANG - HMONG HOUSEWinner of the Community Impact Award

PaSee and Kay Yang’s revitalization of a vacant storefront in North St. Paul is now the home of Hmong House. The restaurant serves traditional Hmong, Thai and Chinese cuisines with a modern flare that have garnered great reviews. The interior contains a picturesque backdrop of murals that depict everyday life in traditional and modern-day Hmong villages, creating a welcoming place for families and community-building events.

RACHELE SIMMONS - FOUNDATIONS HEALTH CAREER ACADEMYWinner of the Employment Impact Award

Foundations Health Career Academy (FHCA) provides a 4-week certified Nursing Assistant and Home Health Aid

Rachele Simmons, owner, fills job vacancies in the health care industry while helping solve high unemployment

DENISE JARRET - ECO HAIR INSTITUTEWinner of the Bonita Martin Best Business Plan Award

As a licensed cosmetologist in North Minneapolis, Denise Jarrett’s Eco Hair Institute is dedicated to ‘going green’ in the salon environment. She offers a 30-hour online course to become certified in natural hair care only, in

to ‘underground’ stylists who do not incorporate harsh chemical-based hair treatments and styling products in their overall business. Denise’s aim is to develop and support salon apprentices with state recognized licensing, while promoting health, safety and chemical-free salon environments.

FINALISTSA-1 VACUUM

EXCHANGE

RUSS & MARY BATTISTO - A-1 VACUUMWinner of the Longevity in Business Award

businesses on University Avenue. A-1 provides vacuum sales, vacuum parts and expert repair service. To provide convenience to customers during and after Green Line light rail construction, A-1 installed a new entrance to ensure easy drop-offs and pick-ups. Continuing in the family tradition, their daughter Gina now assists with overall business operations.

20 YEARS OF IMPACT

4250 entrepreneurs trained

474 loans totaling $9.9 million in financing

40,000 hours of small business consulting to 2000 businesses

SMALL BUSINESS CONSULTING

42 Community Partners across the Twin Cities

CAPACITY BUILDING

Frogtown Entrepreneur CenterFrogtown SquareMercado Central

SMALL BUSINESS INCUBATORS

ENTREPRENEUR TRAINING

SMALL BUSINESS FINANCING

Midtown Global MarketPlaza VerdeSwedish Bank Building