Nike, credit fund team up on urban project Effort seeks ownership of stores by minorities

Apparel

October 03, 1997|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

In an unusual experiment, sports marketing giant Nike Inc. is teaming up with a Baltimore nonprofit credit fund to spur creation of minority-owned athletic specialty stores, especially in inner-city neighborhoods.

The idea is getting its first test in East Baltimore, with the 'N opening of Athletic USA, a small retailer on East Monument Street specializing in athletic footwear.

Representatives of Nike, the Development Credit Fund and the state Department of Business and Economic Development, a third partner, plan to announce the availability of a $1 million loan program today at the new store. Its creators hope the program will become a national model.

Nike is entering into what it called an unprecedented agreement help finance the loan pool as a way to fill a gap for minorities, who often find financing a major hurdle in starting a business.

"Our mission is to increase the number of minority retailers that participate in the sports and fitness industry," Roger James, regional manager for sales development for Nike, said yesterday.

The credit fund approached Nike last year about working together. The fund was formed in 1983 as a partnership of six private sector banks and public agencies to lend to minority businesses.

"We looked at how many athletic wear products were being bought by African Americans in the city, and when you match that up with who is selling to them, there were no minorities doing this, on rare occasions you would find one," said Ackneil M. Muldrow II, president and chief executive officer of the fund. "We see this as a way to create opportunities for athletic retail outlets in the inner city."

It occurred to Muldrow that the credit fund could manage a loan pool to help draw entrepreneurs into the industry. He looked to the athletic wear manufacturer as a natural partner.

Nike was swayed by the credit fund's 14-year track record in aiding start-up and other small businesses.

"We're providing these folks with a known administrator that's in the community and looking out for minority businesses," said Antonio Tijerino, Nike spokesman. "There are a lot of folks who might not want to go into the inner city. That's why we're going in to places like this and trying to build from the ground up."

Nike has pledged a grant of $250,000, to be matched by $150,000 from the state and $100,000 from the credit fund. In addition, Nike has committed to a second grant of $250,000. The credit fund is raising money to match that, Muldrow said.

Entrepreneurs with some business experience and capital can get loans of up to $175,000. The cost of opening an athletic store can average from $200,000 to $250,000, he said. Store operators must be authorized by Nike to sell Nike products -- not a condition of the loan.

First recipients

The first loan -- an undisclosed amount -- went to Rod Wheeler and Brian McAbee, co-owners of Athletic USA, with two stores in Washington D.C., the new one in Baltimore and another planned for Howard Street downtown.

Wheeler, a former District of Columbia police officer in the homicide unit, went into business after investigating the killing of a security guard near Howard University. He became concerned when businesses began to flee the area.

In 1993, he decided to open a business of his own there. He hooked up with McAbee, a former senior regional manger for Up Against the Wall.

"I wanted to do more than be a cop," Wheeler said. "I wanted to do things to show the community we do not have to run from crime as long as we stick together and fight it."

With the opening of stores like Athletic USA come jobs, said Muldrow.

"There are going to be eight people from the immediate neighborhood, and they don't have to get three buses to go to a mall," he said. "That brings back the economic revival of many neighborhoods."

Regional program

The five-year, market-rate loans are available to borrowers in Maryland, Delaware, Washington D.C. and Northern Virginia, the area covered by the credit fund. The state's contribution was reserved for Maryland entrepreneurs. The fund should serve from seven to 10 people initially, then more as the loan pool is replenished.

Since its inception, Muldrow said, the Development Credit Fund has made $23 million in loans to businesses that have created 1,183 jobs.

Pub Date: 10/03/97

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