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Struggling to stay afloat amid funding cuts, two northeast Minneapolis neighborhood associations — Beltrami and Northeast Park — have voted to merge into a single entity. The move is intended to allow them to concentrate their resources, but at the cost of some neighborhood identity and independence.

"I think it's a great idea," Cedric Weatherspoon of Northeast Park said at the Wednesday night meeting where the merger was approved. "It gives us access to more funding and people dedicated to community growth."

Beginning January of next year, the two neighborhood groups will reorganize as a new nonprofit with the working title of "Lower Northeast Neighborhood Association." While a few of the city's 70 neighborhood associations have incorporated as nonprofits representing more than one neighborhood (such as the Standish-Ericsson Neighborhood Association), the northeast neighborhoods' union will be the first time in Minneapolis history that distinct groups have joined together.

Getting to this point took two years and thousands of hours of work, said Beltrami Neighborhood Council executive director Mike Ferrin, a part-time staffer. He may not keep his job after Beltrami and Northeast Park hash out how to reduce redundancies, he said, but merging will better the neighborhood groups' overall financial health.

Hard times for neighborhood associations

Most of Minneapolis' neighborhood associations formed about 30 years ago in response to blight and declining population. Calling on residents to take the lead on revitalization projects, the city, county, Park Board and school board contributed to a tax-increment financing (TIF) district that produced roughly $20 million a year for 20 years. During their halcyon years, neighborhood groups fixed dilapidated housing, opened grocery stores and schools and splurged on beloved parks.

After the TIF district sunset, the city was left as the only source of funding for neighborhood organizations, which currently split a pot of $4.5 million a year. While groups can compete for extra money to engage more diverse residents and renters — people who have always been underrepresented in neighborhood associations — ongoing base funding for each association has fallen to $10,000 a year.

The city's 2024 budget proposes bumping that up to $15,000, but that is only enough to cover the expenses of keeping a robust nonprofit in compliance with state law, and does not pay for staff.

Despite their tiny purses, neighborhood groups continue to perform myriad community services for free, including helping an array of local government agencies get the word out to residents about real estate development projects, proposed public transportation, park improvements and crime. Last year, they cumulatively volunteered more than 94,000 hours for a total value of $3.2 million, according to a city analysis.

"We can't continue to starve neighborhood associations," City Council vice President Linea Palmisano urged during a presentation in August. "And yet I recognize that we need to find a way to do this within the existing budget."

The city is now encouraging adjacent neighborhood associations to combine their resources, and many have accepted grants to explore it. Several ultimately decided against merging despite years of negotiations and thousands of dollars spent.

From four corners to two

Initially, the boards of four northeast neighborhood organizations — Beltrami, Northeast Park, Logan Park and St. Anthony East — proposed joining forces. But slight differences fomented dissent.

In June, the St. Anthony East Neighborhood Association abandoned the process because its board "felt as though we were bringing in more assets, money and our property to the table than the other three organizations," said executive director Marion Arita.

But then subtle signs appeared that Logan Park wouldn't make it to the merge either, said board member Michael Antolak.

Logan Park was closer in size and financial position to St. Anthony East than the other two neighborhoods, and some residents have been grumbling about how Logan Park should have more representation on the new board because it is larger, with more money and people. The board decided against that, Antolak said, not wanting to upset Beltrami and Northeast Park.

A last-minute breakup

Residents from Beltrami, Northeast Park and Logan Park voted separately, and the results were tallied in person Wednesday night.

Initially, it seemed all three neighborhoods approved the merge. Congratulations were exchanged. But then, representatives from Logan Park challenged the results. A tense recount found that the "yes" and "no" categories for their neighborhood had been erroneously switched. Logan Park residents actually rejected the merge at a two-to-one ratio.

Northeast Park board co-chair Katie Kottenbrock said if all goes well with the reconstituted Lower Northeast Neighborhood Association, they'll be able to reduce administrative redundancies and increase membership while preserving the best of what each neighborhood does.

For example: the Beltrami Scare signature event this weekend, and Northeast Park's good relationships with local small businesses.

City spokesperson Sarah McKenzie said other neighborhood associations looking for ways to collaborate include East Bde Maka Ska and East Isles, which are trying to do more private fundraising, and the Marcy-Holmes, Southeast Como, Prospect Park and Nicollet Island-East Bank groups, which are evaluating how to better serve the University community together. The Central and Bryant neighborhood organizations are moving toward a potential merger.