Client Highlight: X2 Pastries

Client Highlight: X2 Pastries

When lifelong friends Xiong Xiong and Xiong Thao started X2 Pastries in 2017, they had no plans to open a bakery; they were only looking for supplemental income. For years, Xiong and Xiong spent their weekdays working full-time jobs and their weekends selling baked goods at farmer’s markets across the Twin Cities metro, where their banana bread, sourdough loaves, and macarons quickly became hits among market goers.

With their quickly growing popularity came the need for a larger workspace. In 2021, Xiong and Xiong moved their baking operations from a home kitchen to a shared commercial kitchen. But even this was not enough to meet soaring demand.

By 2023, the business partners had left their full-time jobs to focus on growing X2, and they decided that it was time to find a permanent home to open their own bakery. After securing a 504 loan from the SBA, Xiong and Xiong found the perfect commercial building for sale on St. Clair Avenue in St. Paul. They eventually contacted MCCD in search of the final gap funding needed to make the purchase.

“The real challenge at this time,” according to Xiong Xiong, “was the interest rates.” Xiong and Xiong had spoken with several lenders before approaching MCCD, but they were often facing interest as high as 9%. Working closely with Trish DeAnda, MCCD’s Chief Financial Officer, X2 Pastries applied for a $230,000 gap loan from MCCD, with a rate which Xiong Xiong recalls was “even lower than what we were originally looking for.” The loan was approved in November 2024, and by that December the business partners closed on the purchase of their first commercial property.

Three months later, Xiong and Xiong are moving at the speed of light to renovate the property, which was previously a yoga studio, into their dream bakery. The space will include a retail section for customers to browse through and purchase baked goods that were challenging or impossible to sell at farmer’s markets, especially full cakes. “Now,” Xiong Thao says, “we get to be more creative with what we make and sell.”

The official brick and mortar X2 Pastries will open in May 2025, and they are excited to be a neighborhood bakery in St. Paul’s Macalester-Groveland community. Stay tuned for information on X2’s official opening date on Facebook and Instagram.

Are you a small business owner or entrepreneur seeking resources for your business? Visit mccdmn.org to learn how MCCD can support you.

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Take Action: Executive Orders and Impacts on the CDFI Fund​

Statement: Executive Orders and Impacts on the CDFI Fund

As certified Community Development Financial Institutions (CDFIs), the Minnesota Consortium of Community Developers (MCCD) and many of our nonprofit consortium members strive to build an economy that works for everybody. A recent executive order by the Trump Administration threatens to dismantle the CDFI Fund, impacting community development across the country.

The CDFI Fund was established in 1994 to promote community development by providing loan capital, technical assistance, and financial services to underserved communities across the United States, and it has historically enjoyed bipartisan support from both federal and state lawmakers. MCCD and our CDFI certified nonprofit consortium members steward federal dollars into innovative opportunities for homeowners, entrepreneurs, and small business owners to build generational wealth, while leveraging millions in private financing.

Since 2005, Minnesota’s CDFIs have

  • Created over 30,000 new housing units, including thousands of owner-occupied units
  • Provided loan capital to 12,000 small businesses and microenterprises
  • Provided loans to over 13,000 consumers

Between 2017 – 2022 alone, CDFIs in Minnesota invested nearly $3.5 billion in capital in rural, suburban, urban, and tribal communities across the state.

Eliminating the CDFI Fund jeopardizes the vibrancy of communities across Minnesota, from the Iron Range to the Twin Cities. Not only would small businesses lose critical sources of capital, but investments in affordable housing could vanish, causing both a decrease in the supply of affordable single-family homes and an increase in homelessness statewide.

MCCD and our members are concerned about both the uncertainty of the CDFI Fund’s future and the potential loss of critical funding. Investments in affordable housing and small businesses are not “waste.” They are the backbones of thriving communities.

“As history has proven, Black, Indigenous, Latine, Asian/Pacific Islander, other Communities of Color and many more marginalized groups will take the brunt of the impacts.” said Elena Gaarder, Chief Executive Officer of MCCD. “MCCD will push against these threats and continue our work to collectively advance racial and economic justice.”

To learn more about MCCD’s response to current funding freezes, read the letter we recently sent to Minnesota’s Congressional Delegation. 

Take action with us and ask your elected officials to support the CDFI Fund! Visit linktr.ee/mccdpolicy for a letter template, communication tips, and contact information to get in touch with your representatives.

Dear Honorable Members of Minnesota’s Congressional Delegation:

The Minnesota Consortium of Community Developers (MCCD) is an association of nonprofit organizations committed to expanding the wealth and resources of communities through affordable housing opportunities and economic development initiatives. Many of our members carry out the work of the federal government and utilize federal funding to support their critical work in communities. In a recent survey, 86% of our members indicated they rely on at least some federal funding to support their work in communities across Minnesota. Cuts to program and department funding like Medicaid, CDBG, SBA, HUD, CDFI Fund and staffing cuts at the relevant government agencies are already having an impact on Minnesotans and the communities they call home.

On behalf of our 35+ affordable housing and community economic development members, we ask that you advocate to the Administration to honor congressionally authorized funding, financial commitments, and contracts to nonprofits. The funding freeze will have incalculable effects on the ability of our members to serve their residents and their clients, who are already struggling to maintain their housing and keep their businesses open. While we understand the courts have paused the federal funding freeze for now, please know that we are all very concerned about the impact of uncertainty and potential loss of funding. What program cuts would mean for Minnesota:

    • This would mean increased instability for people living in income-restricted housing and ultimately would result in an increase in homelessness in communities across Minnesota. Specifically, residents who live in affordable housing rely on the supportive services provided to maintain their health, their employment, and their stability. The loss of this support and rental assistance would force more people into homelessness and would make it more difficult for affordable housing providers to operate.
    • This would mean the loss of development and rehabilitation funding to help increase the supply of affordable single-family homes and could prevent thousands of first-time homebuyers from realizing the dream of homeownership.
    • This would mean loans to small businesses are unable to be processed resulting in the loss of additional private financing or even the ability to sign a commercial lease.

Ultimately, the uncertainty of federal funding is already having a detrimental impact on development in Minnesota – as predictable funding is necessary for construction planning for affordable housing. Because federal funding helps leverage additional public and private investment, we anticipate the loss of millions in economic activity in Minnesota. We are currently reaching out to our members to collect more information to understand the full impact of this decision and we will continue to communicate with the Minnesota Congressional Delegation as we know more.

Thank you for your time and consideration. MCCD and our members would like to make ourselves available for any additional information to best help inform your decisions. Please reach out to Kari Johnson, Director of State Policy & Field Building, kjohnson@mccdmn.org, should you need any further information.

Sincerely,

Elena Gaarder

Chief Executive Officer

Minnesota Consortium of Community Developers

New Bill Would Explore Solutions to Minnesota’s Growing Property Insurance Crisis

New Bills Would Explore Solutions to Minnesota’s Growing Property Insurance Crisis

There’s a multi-sector insurance crisis in Minnesota—and a new bipartisan bill, SF 2205, introduced this week in the state legislature aims to identify solutions to Minnesota’s growing property insurance crisis to better support the millions of Minnesotans that rely on it. 

“On top of the housing shortage driving up Minnesotans’ mortgages, the spiraling cost of insurance has become an alarming burden on property owners of all kinds. As the uncertainties of climate change hit the insurance market, Minnesotans need policies they can rely on when disaster strikes. We cannot allow the dream of homeownership to fall even further out of reach; the Legislature needs to take action. This task force on homeowners and commercial property insurance would help identify the forces behind the rise in property insurance costs and provide vital insight to lawmakers as we create a solution.”
Senator Lindsey Port (55, DFL), Chair of the Senate Housing and Homelessness Prevention Committee and the chief author of SF 2205

This week the Minneapolis Federal Reserve released a report, finding that multi-family housing providers have seen massive increases in their insurance costs, including an average 45% increase in premiums and a 700% increase in deductibles over the past three years alone. These troubling trends are also being felt among homeowners and small business owners in Minnesota

“As a statewide consortium of nonprofit affordable housing developers and economic development organizations, our members are on the frontlines of this crisis. Last year, our affordable housing members began sounding the alarm about the devastating impact insurance costs are having on their operations budgets and the people they serve. We knew we had to take action to preserve these essential properties —and the homes of thousands of Minnesotans.” 
Elena Gaarder, CEO, Minnesota Consortium of Community Developers

Mary Novak, Executive Director of Riverton Community Housing, which is home to approximately 1300 students and community members in Minneapolis, said they continuously struggle to secure insurance for their properties. “We have submitted as many as 50 applications, to just get one quote with a high premium and deductible,” she said. “This has resulted in unsustainable premium growth. For example, in the last 4 years we have seen premiums grow 60% when we used to see single digit year over year increases.”

"Habitat for Humanity homeowners and homebuyers across the state are reporting that rising insurance premiums are causing concerns about the long-term affordability of their homes or pricing first-time homebuyers out of their monthly budgets. It is deeply concerning that rising rates and higher deductibles are having such an impact on hard-working Minnesotans, potentially making it even harder for them to realize and maintain the dream of homeownership.”
Cristen Incitti, CEO of Habitat Minnesota

For years, MCCD has worked at the Minnesota state legislature to grow and strengthen communities across Minnesota through investments in affordable housing, homeownership and small business development. This session, in conversations with lawmakers and key stakeholders, there was clear consensus: Unstable insurance rates are a growing concern, but no one has answers. 

“We know this is a multi-sector, bi-partisan issue that requires careful study and collaboration. That’s why we’ve been working for months to propose a bill creating a homeowners and commercial property insurance task force that can identify solutions and serve as a catalyst for administrative and legislative changes in future legislative sessions.”
Kari Johnson, MCCD’s Director of State Policy and Field Building

Outlined in SF 2205 and HF 2228, the task force would convene shortly after the conclusion of the 2025 legislative session and include members from the legislature, the department of commerce, insurance industry experts and community development organizations representing affordable multifamily housing, affordable homeownership and small business economic development. Key focus areas for the task force would include costs drivers, a review of liability laws, data collection and the potential for a state supported reinsurance or insurance fund. 

"We’ve been hearing from homeowners and housing providers across the state who have struggled with property insurance issues. This bill takes an important first step towards addressing unstable insurance rates that we’ve been hearing about for years. Our bill creates a task force that gets all parties to the table so they can create recommendations for the industry to consider. This is a unique problem that requires a bipartisan solution, and I’m happy to be part of this effort."
Senator Karin Housley, (33-R)