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)

Housing Rally Urges Lawmakers to “Start with Home” in the 2025 Legislative Session

Housing Rally Urges Lawmakers to “Start with Home” in the 2025 Legislative Session

Defying frigid -18 degree temperatures, more than a hundred housing advocates and legislative champions came together at the Minnesota State Capitol for the 3rd Annual Start with Home Rally last week. With colorful signs and energetic calls to action, the group urged state lawmakers to prioritize legislation that saves and creates more homes, expands housing access and opportunity, and secures predictable housing investments.

Like past years, the Start with Home Rally showcased how safe, stable, affordable housing is a bi-partisan issue. Legislative champions from both sides of the aisle addressed the crowd, including: Governor Walz, Lt. Governor Flanagan, Sen. Port, Rep. Igo, Sen. Boldon, Sen. Marty, Sen. Draheim, Sen. Kunesh, and Sen. Johnson Stewart.

“Housing is stability, and it is absolutely critical to Minnesota’s infrastructure,” says MCCD’s Executive Director, Elena Gaarder. “We know that children and families do better when they have a safe and stable place to call home. That’s why we need increased investments in Housing Infrastructure Bonds and across the housing continuum this year and every year after.

Addressing the crowd in the Capitol rotunda, Senator Lindsay Port, chair of the Senate Housing and Homelessness Prevention Committee, echoed that sentiment and emphasized the need to build on the big investments made in 2023. “I’m so proud that, when we had the opportunity, we put over $2 billion total into housing,” Port said. “Now, even though we have a different economic outlook, we cannot stop advocating for housing to be one of the top priorities of this Legislature.”

Along with our coalition partners, we’re pressing this legislature to pass $400 million in Housing Infrastructure Bonds (HIBs) to build and preserve affordable housing, reduce homelessness and stabilize communities. Right now, more than 640,000 Minnesota households pay more than 30% of their income on housing — and more than half of those who are unhoused say they are homeless because they could not find an affordable place to live. But while HIBs are the largest state source of capital for affordable housing development and preservation, only 1 in 5 projects that apply for resources from the Minnesota Housing Finance Agency are funded.

Despite the urgent need for more investment, Governor Walz’s 2025 Infrastructure Plan did not recommend any new authorizations in HIBs. We responded last week with a letter that underscored: “We believe not proposing even $50 million in HIBs sets a bad precedent. State lawmakers may interpret that to mean that our affordable housing market is sufficient and stable, when we all know that is not the truth. We can’t go backward; Minnesotans are depending on us to keep them safely and stably housed.”

While it’s off to an uncertain start, the 2025 legislative session is just beginning and the rally was a great sign of the broad support for housing — across the state and political spectrum. But it will take all of us working together to secure the resources we need to make sure every Minnesotan has a place to call home. We’re hoping to schedule a hearing in the Senate for the HIBs bill in mid-February and will continue to encourage the Governor’s office to expand their 2025 Infrastructure Plan to include HIBs. If you or your organization is interested in sharing your insight at an upcoming hearing or advocating to the Governor’s office, please reach out to me at klaw@mccdmn.org.

As a consortium, we know that our advocacy is stronger when we leverage our collective power. Thank you to our Start with Home rally co-host organizations: Beacon Interfaith Housing Collaborative, Habitat for Humanity Minnesota, Minnesota Housing Partnership, and Our Future Starts at Home Campaign. We look forward to building off the momentum of the rally to ensure that Minnesota starts with home this session.

Corporate Transparency Act Injunction Gives Temporary Relief from Reporting Obligations 

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December 13, 2024

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Corporate Transparency Act Injunction Gives Temporary Relief from Reporting Obligations 

 

On December 3rd, the U.S. District Court for the Eastern District of Texas issued a nationwide injunction that blocks the enforcement of the Corporate Transparency Act (CTA) (31 U.S.C. § 5336) and the Reporting Rule (31 C.F.R. 1010.380), while also halting the year-end deadline for submitting Beneficial Ownership Information reports. To understand the implications, MCCD sought general legal advice, which we are relaying as follows: 

General information: 

  • This is temporary. The injunction could move at any time, and businesses will then be back on the hook. 
  • Delay filing or voluntary file if you haven’t already filed on the FinCen website. 
  • A decision will not be made by year-end. If the law is reinstated, businesses will have a new deadline for compliance. 
  • Pay attention to the news. Follow the news and official updates on the FinCen website. 

Forbes also offers some recommended next steps for business:  

For businesses that have filed with FinCEN: 

  • Pause Compliance Efforts: The injunction currently halts enforcement of the CTA. While FinCEN may appeal, no immediate action is required at this stage. 
  • Monitor Legal and Administrative Developments: Stay updated on litigation outcomes and any policy shifts under the next administration. 
  • Protect Data: Ensure that any previously submitted beneficial ownership information is safeguarded against potential misuse. 

For businesses that have not filed with FinCEN: 

  • Delay Filing: The nationwide injunction means that no business is currently required to comply with the CTA, but further guidance or court decisions could reinstate the act’s enforceability. 
  • Consult Legal Counsel: Businesses should work with legal advisors to evaluate their exposure under the CTA if the injunction is lifted or enforcement resumes. 
  • Prepare for Potential Compliance: If the injunction is overturned on appeal, businesses may need to act quickly to meet reporting deadlines. Having compliance mechanisms in place will help mitigate risks. 

For a general explanation of the Corporate Transparency Act, we recommend this Forbes article as a practical guide for small businesses.   

Disclaimer: The content is provided for informational purposes only and may not reflect the most up-to-date laws in your jurisdiction. It is not intended, and should not be construed, as legal advice for any specific situation or set of circumstances. 

Ongoing Commitment to Racial Equity

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July 10, 2024

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Ongoing Commitment to Racial Equity

By: Kadra Abdi, Director of Policy & Field Building 

As we continue our journey towards advancing racial equity at MCCD and within the field, we reflect on the progress we’ve made and the path ahead. Last year, our training was on equitable leadership, laying a foundation for our understanding and commitment. This year, we’re building on that foundation, focusing on operationalizing equity and embedding our learnings into our daily work with our clients and members.

Operationalizing equity means integrating equity into every aspect of our organization, from decision-making processes to program development and implementation. It requires us to think critically about our policies, practices, and procedures to ensure they promote fairness and inclusivity for all.

One key aspect of this year’s focus is embedding equity into our work culture. This involves fostering a culture of inclusivity, where every voice is valued and heard. It means actively seeking diverse perspectives and experiences and incorporating them into our decision-making processes.

Another crucial element is embedding equity into our lending policies, programs, and practices. This requires us to assess how our programs impact different racial and ethnic groups and ensure they are equitable. It means designing programs that address the unique needs and challenges faced by historically excluded and low-wealth communities.

To support this effort, we provide ongoing training and resources for our staff, including workshops, convenings, and other learning opportunities to deepen our understanding of racial equity and its application in our work. We also partner with external organizations and experts to enhance our capacity and amplify our impact on advancing racial and economic justice.

As we embark on this next phase of our journey, we are excited about the possibilities ahead. We know that achieving racial equity requires ongoing effort and a willingness to challenge ourselves, our assumptions, and disrupt racist systems and policies. But we are confident that by working together, we can create a more just and equitable community development field.

Stay tuned for updates on our progress and ways you can get involved in our racial equity work.

Social Equity in Cannabis

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June 25, 2024

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Social Equity in Cannabis

Join us for an information session on the verification process for prospective potential social equity applicants interested in entering Minnesota’s cannabis industry this summer.

Recent updates to the state’s cannabis laws have introduced a licensing preapproval and vetted lottery process specifically designed for qualified social equity applicants.

As of June 24, applicants can initiate the verification process to confirm their eligibility for social equity status. This phase closes on July 10. Verified social equity applicants can then proceed to apply for license preapproval starting July 24 until August 12, as mandated by law. Submitted applications will undergo thorough review and vetting, with qualified applicants entered into a lottery scheduled for this fall.

Interested parties can find a detailed, step-by-step guide through the verification process on Minnesota Office of Cannabis Management (OCM)’s website. Additional resources and technical assistance will also be accessible online.

All verification and preapproval processes will be conducted through OCM’s website. For more information and to stay updated, please visit OCM’s website. Detailed eligibility requirements for social equity can be reviewed at Social Equity Qualifications.

We look forward to helping community members navigate this exciting opportunity to participate in Minnesota’s emerging cannabis market.

Information Session:

Date: July 2, 2024

Time: 5:30 PM

Where: Virtual

Registration

$3.1 Million in Racial and Economic Justice Grants Awarded

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May 15, 2024

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$3.1 Million in Racial and Economic Justice Grants Awarded

In a significant step towards fostering racial and economic equity, The Minneapolis Foundation has announced the recipients of its Racial and Economic Justice Grants naming MCCD as a recipient. 

The funding supports organizations and projects that:

  • Advance structural and systems change through policy advocacy, organizing, and movement building.
  • Invest in economic systems and practices that build wealth and stabilize communities.
  • Advance narrative strategies focused on racial and economic justice.
“For too long, traditional economic development practices have inflicted economic, social, and political harm on BIPOC and low-wealth communities. At MCCD, we see shared ownership as an approach that repairs this harm and builds community wealth.” – Elena Gaarder, CEO of MCCD

With the support of The Minneapolis Foundation and racial and economic justice at the core of our work we will continue to advance policy, create access to capital, and provide technical assistance to expand worker owned cooperative development.

Racial Equity Training

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May 1, 2024

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Racial Equity Training

Our values are not just words on paper, they are the guiding principles that shape everything we do at MCCD. One of our core values is Racial Justice and Intersectionality. We believe in an anti-racist approach to our work, making sure everyone’s identity is honored, and recognize how this lives in how we work and operate on every level.

We are putting in the work practicing our values and have started our third phase of racial equity training: Operationalizing Racial Equity. Putting our racial equity tools into practice, we ignited vulnerable and productive conversations.

Our team engaged in another racial equity training session: Racial Equity Tool & Communication. This session was an intensive work group setting that challenged our thinking and helped us see opportunities to put equity into action.

Throughout the year, our team remains committed to coming together for ongoing racial equity training, integrating these learnings into every aspect of our work.

Home and Community-Based Service Cooperatives

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February 16, 2024

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Home and Community-Based Service Cooperatives

It’s National Caregiver Day! Ever wondered what happens when caregivers come together? They develop cooperatives that are building wealth among workers and providing exceptional care for their clients!


Despite the benefits to workers, their clients, and the community, there are very few Home and Community-Based Service cooperatives in Minnesota. Our Director of Shared Ownership, Electra, has been busy expanding shared ownership opportunities to our BIPOC and underinvested communities. We are currently working with 5 worker-owned home care businesses providing financial support and technical assistance to address the unique legal, business, and organizational characteristics of cooperative and employee-owned business models!


The owners of Cardinal Comfort Care LLC embraced the worker owned model and is now thriving with a mission to create a Care Model that puts caregivers and their clients first. By offering member ownership to raise wages and offer innovative training opportunities that create competent compassionate quality care for their clients.

Shared Ownership Info