When He Tried to Buy and Develop a Distressed Shopping Center in Baltimore, He Found an 80-Year-Old Legal Covenant That Banned Black Ownership. Here's What He Did Next. Lyneir Richardson, co-founder and CEO of Chicago TREND Corporation, discusses the company's efforts to accelerate economic development in urban neighborhoods.
Key Takeaways
- TREND aims to rebuild and rehabilitate distressed retail centers in urban locales. The company's CEO Lyneir Richardson says the work is complex, potentially risky, and often reveals unexpected impediments.
- Richardson advises aspiring entrepreneurs to forge ahead with their ideas even if they aren't fully fleshed out. Looking for perfection, he says, will slow momentum and cause inaction.
In this ongoing series, we are sharing advice, tips and insights from real entrepreneurs who are out there doing business battle on a daily basis. (Answers have been edited and condensed for clarity.)
Who are you and what is your business?
I am Lyneir Richardson. I am the co-founder and CEO of Chicago TREND Corporation (TREND) which is a for-profit social enterprise. TREND was founded in 2016 to strengthen commercial corridors and accelerate economic development in urban neighborhoods. We now own five community shopping centers in major markets with 330+ community investors nationwide. As we expand, TREND will reshape the way in which commercial real estate is owned in communities of color, deliver profits for our investors, and create community prosperity.
In 2019, we launched TREND CDC, a non-profit community development corporation, to lead initiatives that enhance our inclusive shopping center ownership strategy – which includes community engagement and investor education.
Together, TREND and TREND CDC have developed a track record of working in majority-Black neighborhoods to create opportunities for community investors to own commercial real estate and for entrepreneurs of color to build/grow their businesses.
What inspired you to create both a non-profit and for-profit business? What was your "aha moment"?
Our "aha" moment came when we heard from early foundation partners that it was more feasible for them to support the mission of the TREND Enterprise through grants to a non-profit entity versus a for-profit. After a few years of partnering with non-profit organizations as fiscal sponsors, TREND determined it was strategic to establish TREND CDC as an in-house non-profit partner.
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What has been your biggest challenge and how have you overcome it?
Chicago TREND's "superpower" is rebuilding/rehabilitating distressed retail centers in urban locales, bringing in new tenants (including local Black business owners), and making co-ownership of the centers available to residents of the neighborhoods where the centers are located.
The work to transform commercial real estate in disinvested inner-city communities is complex, potentially risky, and often reveals unexpected impediments. We continually deal with the tension of mission and charitable objectives, financial viability, and market realities.
A recent example of such a challenge is our latest project, the Edmondson Village Shopping Center in West Baltimore. It is a retail hub that was once a destination for Baltimore shoppers but has fallen on hard times over the past several decades.
When I began securing the required approvals for this project, I discovered that there were 80-year-old restrictive "redlined" legal covenants in place that prevented ownership of Edmondson Village "by any Negro or person of Negro extraction." After a prolonged effort, we managed to amend these covenants, which represents the first successful action of this kind in the country for such a shopping center project led by a developer of color.
Because of the entrenched nature of this noxious barrier, the struggle to unravel it was lengthy and occasionally seemed insurmountable. But with patience, diligence, and impeccable attention to detail, we were able to move the development forward. The benefits to the community and to local business owners will be significant and enduring.
What advice would you give social entrepreneurs who are seeking to form a non-profit arm that's aligned with a for-profit business?
A critical component of such a pursuit is ensuring that the roles and functions of each entity are clearly defined. While the two organizations advance a shared mission, each entity has its own objectives, governance, and operations. It's prudent and essential to seek external business and legal advice to guide this process, especially when it comes to contractual agreements between the two organizations (e.g., collaborations on grant-funded projects).
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What funding are you seeking, where are you looking for it, and how do you prepare for your pitches to prospective investors?
Our aim is to raise $50 million for the TREND Real Estate Fund, which would allow us to take the approach that we've implemented successfully in our Chicago and Baltimore real estate development projects and roll it out nationally in urban locales.
In 2023, the Fund had its first closing of $10 million in committed capital from five institutional partners—the MacArthur Foundation, Pritzker Traubert Foundation, Surdna Foundation, Kresge Foundation, and McKnight Foundation. We're currently working to raise $40 million of additional impact capital from other foundations, interfaith investors, banks, corporations, and high-net-worth individuals/families who align with our community economic development mission.
In terms of our pitch strategy, TREND has assembled a small team to develop a pipeline of potential investors and prepare presentation materials – including financial data about our past and current projects, media coverage about our philosophy and achievements, and ROI projections. To prepare for these pitches, our team researches the priorities of the target investors and highlights how the TREND investment opportunity is consistent with their unique needs, goals, and objectives.
What does the term "social entrepreneur" mean to you?
A social entrepreneur is someone who wants to find a business solution to a social problem. He/she is someone who sees value in people and places that are overlooked, misunderstood, or undervalued. The social entrepreneurship mission of Chicago TREND is to generate profit while also benefiting society, but without the need/requirement/pressure to be laser-focused on maximizing unicorn-level profit at all costs.
What's something that aspiring social entrepreneurs think they need to have in place when envisioning their business but that really isn't necessary?
Many aspiring social entrepreneurs mistakenly believe that they need a perfect concept before they begin their journey. The problem with this mindset is that making perfection a condition for action can slow momentum, cause hesitation, and actually create inaction.
If you have an idea, start developing it and move it forward. Your concept will evolve and improve as you talk to potential stakeholders and infuse that knowledge into the innovations that you devise with your team.
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Is there a particular quote or saying that you use as personal motivation as a social entrepreneur?
"Wealth is created by owning assets that generate revenue and appreciate over time."
This thought came to me as a divine inspiration while I was meditating, and it 100% applies to Chicago TREND's mission. It's been a mantra that has been a thread throughout my career: I've sought to connect people and communities of color to wealth-building opportunities that they otherwise might not have access to.
There are many approaches to reaching this objective. It's frequently challenging but always rewarding.
