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A man with a microphone addresses a crowd inside of a coffee shop.
30th
November
2022
Baltimore, MD

Baltimore’s Oldest and Largest Worker-Owned Coop Expanded with CDFI Help

November 30, 2022

Client: Red Emma's Bookstore Coffeehouse

Client Location: Baltimore, MD

CDFI: Seed Commons

CDFI Service Area: United States of America

CDFI Services Provided: 

$1,750,000 in small business financing with support from the Grow with Google Small Business Fund and Google.org Grant Program

Financial and Social Impact

In its previous location, Red Emma’s paid upwards of $15,000/month in rent. With a low-interest non-extractive mortgage loan from Seed Commons, the cooperative’s monthly mortgage payment is about half of that. Even with the overhead of insurance, property taxes, and maintenance, the reduction in monthly costs has allowed the cooperative to raise wages by over $2/hour almost immediately, with the workers also building equity in a valuable asset as they work to pay the mortgage down.

Founded in 2004, Red Emma’s has an impressive track record of job creation, cultural innovation, and economic justice work. Even with this reputation, the cooperative still struggled to gain access to state development grants and subsidies that are routinely offered to for-profit developers to acquire and activate abandoned buildings.

Two people making espresso

Red Emma’s first began working with Seed Commons and its predecessor, The Working World, in 2013 when the cooperative undertook its first major expansion. Banks didn’t understand businesses with 12 owners, which limited their financing options. These larger banks shied away from even a small investment in the cooperative. With a loan from The Working World, as well as other nonprofit lenders, the coop moved from an 800-square-foot cafe space into a 5,000-square-foot restaurant space, tripled the number of ownership positions, and exceeded $1 million in sales within a year. As the cooperative has grown, the Seed Commons investments have grown too. With a second expansion financed in 2018, and in 2020, amid the COVID-19 pandemic, the cooperative came back to Seed Commons.

Seed Commons was able to provide a commitment for a $1 million renovation line of credit that allowed them to purchase two buildings that now form the permanent home for Red Emma’s and its community. And that commitment ultimately unlocked additional state and city grants to reduce the costs.

A group of people standing in front of a store
Processed with VSCO with kc25 preset

“Red Emma’s wouldn’t exist today without the support of Seed Commons and our local peer member, The Baltimore Roundtable for Economic Democracy (BRED), says Malik Cole, President, and worker-owner of Red Emma’s Cooperative Corporation. When there is a problem, these folks are our first call – how many businesses have that kind of relationship with a lender? With BRED and Seed Commons, we know that we are in a community with people who care about our business, and care about us as workers, who are committed to helping us see this through on a daily basis.”

Tags: Google.org Grant Program, Grow with Google Small Business Fund, Small Business

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