Eastside Cafeteria
Date
2000
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Publisher
Southern New Hampshire University
Abstract
As stated in the thesis project, "In 1990 Winston-Salem and Forsyth County had experienced many negative changes in is economic structure. Kolburg, Kravits & Roberts purchased RJ Reynolds Tobacco Company, in the largest Leveraged Buy-Out of the period, $25 billion dollars. Winston-Salem was the headquarters of Piedmont Airlines, one of the most profitable airlines in the country and was purchased by US Airways in a very hostile takeover; and finally, Wachovia Bank & Trust Company, the largest financial institution in the area, moved its corporate headquarters to Atlanta,Georgia. The collective impact of these actions were devastating to an otherwise normally progressive community, whose unemployment rate had not exceeded 6% since the great depression of 1929.
However, the segment most affected by the economic reverses of the 1990's, the African American community, was still trying to grapple with jobs and opportunity for its residents, who were still feeling the affects of urban renewal of the late 60's and 70's. Because of this new economic reality and its negative impact, many residents of the East Winston community, began to think that it was time to be pro-active, and not to wait on someone else to solve their problems. East Winston Community Development Corporation (EWCDC) was the vehicle created to address the problems and issues confronting the community.
In the spirit of community, one of the first tasks of the EWCDC was to develop a forum for resident input and participation, the outcome was the first African American Summit. Seventy-five community leaders and residents were a part of a two-day retreat held in Charlotte, North Grace Cafeteria Project Carolina. During the Summit, problems were discussed and the solutions were prioritized into an action plan. The number one concern of the participants was economic access. Plans were being developed for the eventual commercial and economic revitalization of the communities where they lived. And of special concern was the lack choice and variety in available neighborhood restaurants. In June of 1995, the Ministers Conference of Winston-Salem & Vicinity (the Conference) agreed to participate in a weekend conference to focus on church involvement in, and support of various community issues. At the end of the conference they overwhelmingly voted to support a food service complex. A formal "Partnership" was formed between the Conference and EWCDC in September 1995.
The Partnership received a planning grant in 1996 and funding for implementation in 1998 for building a full-service cafeteria restaurant. However, negotiation involving project funding began to stall. Financial institutions were using traditional tools to evaluate the project and were not taking into consideration the unique aspects of culture in the operation of the business. The solution was to find ways to raise more equity capital for the project. In order to raise more equity, David Capital, Inc., (the holding company for the cafeteria) received permission from the Secretary of State to sell 100,000 shares of common stock under the adopted 504 ruling, by the state of North Carolina. Each share sold for $10.00 per share.
The Victory Mutual Masonic Credit Union in East Winston set up a special loan program to help local people invest in the proposed EastSide Cafeteria, which aided in the development of the kind of cyclical partnership that are the essence of Community Economic Development. Participants must be members of the credit union to qualify for a loan to purchase stock, from $2000 - $30,000. The credit union will accept the purchased shares of stock as collateral-at 90 percent of the shares' value. The investor would be required to keep 10 percent of the loan value in a savings account at Victory.
After purchasing 5 1/2 acres of land the Board of Directors of David Capital agreed to expand the cafeteria project to include 5000 square feet of space for a banquet and meeting facility. This expansion was possible because of the commitment made by the local churches to host at least one annual event for their church that would include meals.
The EastSide Cafeteria and Banquet Center Project could possibly be one of the most dynamic and innovative economic initiatives to blossom out of community based development in a long time." (Library derived description)
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