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Changing the equation

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business Detroit Lakes,Minnesota 56501 http://www.dl-online.com/sites/all/themes/dlonline_theme/images/social_default_image.png
Detroit Lakes Online
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Changing the equation
Detroit Lakes Minnesota 511 Washington Avenue 56501

When President John F. Kennedy told his staff he wanted a plan of action to fight rising poverty in 1963, he couldn't have specifically known his directive would result in the building of the Detroit Lakes Community and Cultural Center or the restoration of the old Graystone Hotel.

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He also couldn't have known that countless low-income residents throughout the region would be able to buy homes -- or that the landscape of the White Earth Indian Reservation would change with opportunities.

But all that did happen, thanks to the formation of the Midwest Minnesota Community Development Corporation (MMCDC) 40 years ago.

The non-profit organization was created as part of the 'CDC Movement' (under President Lyndon Johnson), which gave local groups the power to develop communities in a way that would help spark economic growth without having to go through local government.

MMCDC, originally created under the Mahube Community Council, set up shop in Detroit Lakes in 1971 with the purpose of creating opportunities for low-income people.

Local attorney John Quam was the first chairman of a 12 person-board.

Doris Kohler of Detroit Lakes came one year later.

"We only had one funding source at that time," said Kohler, who worked for 30 years in the accounting and controller department.

The organization secured $750,000 in funding, and with that, began to invest.

First up, specialty crops.

"It could have been growing tomatoes or cucumbers, harvesting trees, or making honey," said current MMCDC President Arlen Kangas.

"That's what gave them the start."

Kangas came 15 years after MMCDC's start up, and according to Doris Kohler, the pre-Kangas years were rough.

"We had our office moved to Mahnomen for a while, which caused us to lose most of our staff," said Kohler, "and then the same thing happened when we moved back to Detroit Lakes, so we had to keep starting over."

Unable to keep an executive director for very long, MMCDC struggled to make investments, and struggled to stay alive.

"We were out of funding, and we had like 16 special conditions that we had to complete in four months or it would have closed," said Kohler, who says she took over as interim executive director more times than she can count.

"We worked night and day; there were times I thought about giving up."

But she didn't.

The loyal accountant who wanted to make a difference in her community saw things turn around when Kangas took the reins.

One of 13 children, the Wolf Lake native had a PhD in economics and the drive to do something with it.

The organization moved into making equity investments and commercial loans, starting out small and growing to larger projects.

One of only approximately 40 CDC's nationwide, MMCDC quickly grew to become one of the largest and most successful, hitting around the top 10 mark in the country.

The group invested out of state, throughout the state, and close to home.

Probably its most famous local projects were involvement in the creation/renovation of the DLCCC and the Holmes Theater and the historic restoration of the Graystone building in downtown Detroit Lakes.

The Graystone is now home to MMCDC's office, several businesses and 22 affordable housing units.

The organization also built 18 single-family homes and many more multi-family units along highway 34 in Detroit Lakes, and is currently working with Long Bridge Heights.

Its goal is to make synergistic investments.

"We want to build a tax base for communities that struggle from de-population," said Kangas.

"We invest first with the hopes that others will follow."

While the organization continued to gain incredible assets, (it jumped from $2 million in 1986 to $350 million now) it never strayed from Kennedy and Johnson's goal -- to help fight poverty.

"We made a commitment to invest $20 million into White Earth Reservation projects over 20 years, and after only 10 years, that goal had been exceeded," said Kangas, who says poverty on the reservation makes it a MMCDC priority.

The group acquired the Ogema Bank, built several homes, set up trust funds for newborn Native Americans on the reservation and financed numerous projects -- including home loans and home building.

Its portfolio is as diverse as they come, with investments ranging from $10,000 to $20 million.

"Because of our capital, we can make investments that no other fools would," said Kangas.

"We can take bigger risks."

That means MMCDC can offer loans to prospective homebuyers who wouldn't qualify at a typical bank and can help unconventional businesses start and grow.

In fact, right now the organization is working with an undisclosed, small Minnesota community to create an expansion that would relocate a tractor manufacturing plant from Southern France to Minnesota, which is predicted to create 50 to 70 jobs there.

Kangas says it's tough to drive around a six-county radius of Detroit Lakes and not see something MMCDC has put its fingerprint on, but he also says he'd like to see the organization grow even more.

"I'd like to see us get up to a half a billion in assets," said Kangas.

"Our goal is to make our communities a better place to live and work, so if we can continue to provide affordable housing in an area that supports job growth, that's even better -- that's what I'd like to see happen in the next 40 years."

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