The Aux wants to raise $1.5 million from Evanston investors.
The development is a cutting edge and innovative mix of businesses, creative cooperations and community spaces to be located at 2223 Washington St.
The organization, the full name of which is the Aux Cord LLC, is a creative concept. It is combining a number of ideas, including serving as an incubator for Black businesses and a community hub for gathering and building new ideas.
It will house 10 small business tenant spaces, five pop-up spaces for new vendors, five co-working spaces as well as offices and Zoom booths for entrepreneurs. It estimates it will create 30 or more jobs.
The group is also working to make sure the funding is the same – diverse albeit secure and sustainable. Of the $10 million it needs to renovate a 16,500-square-foot warehouse, the Aux has already raised $5.5 million, a mix of private money as well as state and city government dollars. It is also seeking $3 million in philanthropic funds.
Now the Aux founders are asking for community equity investors. Investors who contribute from $1,000 to $50,000 toward the $1.5 million community equity fund will own a piece of The Aux.
Community equity
Unlike the private donors and public funders who contributed so far, community equity investors will have a vote and a say in the company.
The Aux intentionally set the minimum requirements at $1,000 to involve Evanstonians who might not have invested before.
“This is just one of the reasons why this project is so special,” said Jacqui White, co-owner of The Aux and The Laundry Cafe. “You can actually as a community member own a piece of the Aux. It was an intentional $1,000 ask so that people like myself or Tasha [Wilson] can actually invest. It’s kind of hard to own commercial real estate. Not everyone can get there.”
The Aux has raised $19,000 toward its community equity fund from 16 investors since it started this month, according to its Small Change page.
To make it more affordable for community members to invest, the Aux is also seeking $500,000 in equity sponsors. These equity sponsors are making donations, not investments, to match whatever amount community equity investors need to reach that minimum $1,000. For example, if a community investor has only $500 to invest, an equity sponsor could match that investment with $500 so the community investor can meet the $1,000 requirement. Investors can cancel their commitment until June 29, 2023.
The Aux beginnings
The idea for The Aux came to cousins White and Wilson who worked together to start The Laundry Cafe. They encountered several obstacles while trying to raise money, which led them to Juli Kaufmann, president of the Milwaukee real estate firm Fix Development.
Sherman Phoenix, is a Kaufmann project. It started with a damaged building in a predominantly Black neighborhood in Milwaukee. The building was renovated and now houses 30-plus Black-owned businesses, created more than 60 jobs and has an estimated 50 community equity owners.
Wilson recalls touring the Sherman Phoenix and being blown away. “We walked in and we were just like, ‘This is dope,’ “Wilson said. “For us to come from a progressive city, we’ve heard talk about doing this, but we’ve never seen it before.”
Essentially, The Aux is a real estate project, the tenants’ rent is the income, Kaufmann explained. Tenants cover the cost of running the building such as utilities, landscaping, insurance and cleaning.
The left over revenue will then be the return investment for the community investors. The pay out to community investors is – like any investment – based on what they put in.
But the voting is different than most investments as no matter they get one vote no what amount the community equity investor. The funds raised through the community equity investment go toward building The Aux and all of the other needs – same as the donated funds to the project.
“The Aux supports job creation, access to wellness, and creates opportunities for entrepreneurs,” White said. “This money builds it, by supporting all of this and keeping us together.”
“We’re building and enhancing the community and bringing wellness to the entire area, not just to Evanston but the surrounding suburbs as well,” said Tiffini Holmes, co-owner of Well Beings Chicago and The Aux.
The Aux already has eight tenant spaces filled. The current businesses include food, craft and service vendors at The Aux Marketplace, beauty services for all genders at Embrace Your Crown and a comfortable place to do laundry and drink coffee at The Laundry Cafe.
Construction begins late 2022, but they are already expecting delays based on inflation and COVID. Still, The Aux hopes to have a grand opening in early 2024.
Interested