Latest Case Studies/ Human Impact

Closing the Wealth Gap in Miami—and Across the Country

Fidel Aquino makes the finest fitted suits and guayaberas in all of Miami’s “Little Santo Domingo”—maybe all of the city itself.

A young 72, Aquino trained with fellow Dominican designer Oscar de la Renta, and is now regarded as a master. His clothes are worn by star Reggaeton musicians. Customers arrive from other countries carrying textiles for him to transform into garb.

But talent is not always enough. His business in the Allapattah neighborhood was at serious risk in 2020 when he joined a 12-week training program run by The Allapattah Collaborative, CDC.

Master tailor Fidel Aquino credits the Allapattah Collaborative with saving his business.

Eviction threatened this master tailor after a six-month pandemic closure. His rent skyrocketed from $600 to $2,200 a month, and his business license had lapsed because he wasn’t comfortable managing digital communications with the city or his bank that had become so necessary during the shutdowns.

Allapattah Collaborative, founded in 2019 by Executive Director Mileyka Burgos-Flores, helped him develop improved business practices and then get grants and loans.

“This program saved my business,” says an enthusiastic Aquino, one of more than 2,500 businesses in the Allapattah district, who now dreams of owning his store—which is also his workshop—so he can revamp it without fearing a rent hike.

In 2020 and 2021, the Allapatah Collaborative assisted more than 65 businesses and secured $3.2 million in loans and capital for small businesses.

Allapattah's name is derived from the Seminole Indian word meaning alligator.

The Rockefeller Foundation supported the Collaborative as part of The Rockefeller Foundation Opportunity Collective (ROC), through a grant to Hispanics in Philanthropy (HIP). ROC, an initiative launched in 2020, aims to help Black- and Brown-owned businesses in 12 key locations across the country both gain resiliency and grow as part of the Foundation’s broader mission of making opportunity universal.

The Allapattah Collaborative managed to secure twelve times that initial investment from the Foundation and HIP in access to capital for its businesses.

The Wealth Gap Costs the U.S. Trillions of Dollars

Black and Latino households earn about half as much as the average White household while owning only about 15 to 20 percent as much net wealth—and this gap has widened notably over the past few decades, the Federal Reserve noted in an October 2021 report. The reasons are largely historic, due to systemic exclusion of Black and Brown households.

“Foundations like Rockefeller have an inimitable role to play—a crucial role—in leading the way toward achieving justice, which is beneficial not only for one community, not only one city but the entire country,” says the Collaborative’s Chief Operating Officer Francesca Escoto. “Think of us as a body. You can’t cut off an arm and imagine you are fine. You are not fine. Everyone pays when productivity and creativity are stifled.

Considered only from a dollars-and-cents perspective, the racial wealth gap is expensive to the U.S. as a whole. Systemic disparities have cost the U.S. $22.9 trillion over the last 30 years, according to a Fall 2021 paper from the Brookings Institute authored by the president of the Federal Reserve Bank of San Francisco and others from the bank.

“The growing wealth gap between Black and Brown folk and white folk is an existential threat to our country,” says Gregory Johnson, The Foundation’s Managing Director for the Equity and Economic Opportunity initiative (EEO) who leads the place-based work. “Investing in small businesses closes that gap, unlike any other lever.”

This is why the Allapattah neighborhood, one of Miami’s oldest whose name derived from the Seminole Indian word for alligator, is at once unique and emblematic of the challenges facing small businesses in Black- and Brown-communities nationwide—and the country as a whole. With a total population of about 43,900, including 80 percent Latino and 18 percent Black, some 80 percent of the homes are tenant-occupied, with a median income of $26,023, according to the Collaborative.

Commercial properties can be transferred across generations. They help business owners withstand shocks, whether due to the pandemic or gentrification. And when local businesses own their properties, communities gain more control over local development, increasing economic stability for all.

But the numbers, while persuasive, don’t tell the full story. Sometimes for that, we have to go right to the individuals.

Mechanic Had $80,000 in Cash for $300,000 Purchase—and Couldn’t Get a Loan

Consider the example of Jose Balmaceda, 51. He was only seven years old when he began learning how to fix cars at his uncle’s shop, and he loved the work from the start. Now he owns an auto repair shop himself, but not the building that houses it: a vintage gas station from the 1940s along Allapattah’s 1.7-mile “Little Santo Domingo” business corridor.

In 2010, the shop was put up for sale for $300,000. Balmaceda had managed to save $80,000, but the owner wanted $100,000—one-third of the total cost—as a down payment. Balmaceda pounded the pavement seeking a loan for that last $20,000, and repeatedly heard “no.” Still committed to his shop, he used much of that cash for property improvements, even as he now pays $4,500 a month in rent.

When the pandemic hit, Balmaceda got a frighteningly bad case of Covid-19 early. He had to shut down his shop for months, and this father of three spent all his savings to support himself and his family.

Jose Balmaceda, 51, owns his mechanic shop in Allapattah but was denied a loan to buy.

“God sent them to me,” he says of the Allapattah Collaborative team. “I know how to work, but I don’t know how to do all the paperwork. I don’t even like computers. They helped me get organized and get a grant. Without them, I would have lost everything. They are my angels.”

What Balmaceda prays for these days is to find a way to purchase the former gas station. This would allow him to pass on to his children some of the economic stability he has struggled for over the last 44 years.

Burgos-Flores Launches “Thrive in Place Fund”—But Knows the Clock is Ticking

Stories like these are what encouraged the indefatigable Burgos-Flores to think even bigger. She and her Allapattah Collaborative have initiated a “Thrive In-Place Fund,” with the goal of raising $100 million by 2025 and partnering with the South Florida Community Land Trust to buy up storefronts in Allapattah and resell them affordably to the longstanding businesses.

But she knows time is short.

Miami claims one of the country’s hottest commercial real estate markets, and Allapattah is attracting investors. In fact, in the Wynwood community which abuts Allapattah and is now known for its Art District, redevelopment already displaced the Puerto Rican American community who lived and worked there.

Gentrification that displaces communities, Burgos-Flores says, is the result of unjust economic development policies, public disinvestment in historically marginalized communities, and lack of protection for existing residents.

Graph showing Allapattah’s history.

Until recently, investors turned up their nose at Allapattah, which was devastated after May 1980 riots sparked by an all-white male jury’s decision to acquit four Dade County police officers in the killing of Arthur McDuffie, 33, a Black insurance salesman and U.S. Marine who was beaten to death after a traffic stop.

Most of the burned storefronts never reopened, turning the area into a ghost town. Dominican immigrants led the way in rebuilding even as the community’s struggle with poverty and violence continued. The neighborhood’s violent crime rate remains 125 percent higher than the national average.

“By Myself, the Challenge Would Have Been Too Great”

“A lot of my classmates are in jail or dead,” says Allapattah native and entrepreneur Melissa Guzman, 34. Guzman escaped the streets by spending time in the library across from Miami Jackson High School, and in her guidance counselor’s office. “That saved me.”

After becoming a Gates Millennium Scholar, Guzman was admitted to Howard University. “But my worldview was so limited,” she says. “I only knew I didn’t want to be poor. Sports or entertainment seemed the only way out of poverty. So I prepared myself to be a radio announcer.”

Then at age 28, she abruptly fell ill and was diagnosed with multiple sclerosis. “I was hospitalized seven times in four months. The last time, a procedure went wrong and I lost a lot of blood. I was in a wheelchair. I couldn’t walk or open my left fist. I knew I had to find a way to change something, or I was going to die.”

Research convinced her that her eating habits triggered the inflammation in her body, so she adopted a fully vegan diet. As she stunned the doctors by getting better and better, she vowed to make this her work. With a business partner, she launched The Caribe Vegan food truck—plant-based dishes with Caribbean spices.

But with the start of the pandemic, the partner pulled out of the venture. Guzman needed help.

Enter Allapattah Collaborative.

“When the shutdowns began and my partner left, I was backed into a corner. They helped me get the funds I needed to survive, and then connected me to a lawyer to help with some issues with my former partner,” Guzman says. “If I’d been doing this by myself, I think the challenge would have been too much.”

Now Guzman is working to get her products into grocery stores to make her business stronger and more resilient, and Burgos-Flores dreams of a community commercial kitchen for all of Allapattah food entrepreneurs, similar to La Cocina in San Francisco’s Mission District.

Despite Murders and Robberies, Business Owner Remains Committed to his Community

Julio Diaz, 45, originally from Yonkers, N.Y., is intimately familiar with Allapattah’s crime rate. Diaz, who moved to Miami for college, opened his clothing store 20 years ago, naming it The Sixth Borough. He has witnessed three murders directly in front of his store, been broken into six times since 2005—most recently just this Spring—and has attended too many customers’ funerals to count.

But Diaz is committed to his adopted community.

“I know the people, and they know me,” he says. “That matters. My mother worked 30 years at General Motors, and bless them, we had a good life. But this is different. Here, we are on the front lines.”

Diaz recalls the “discouragement and uncertainty” that came with the pandemic shutdowns and credits the Collaborative with working to save not only his business, but the entire business corridor, and along with that, the community itself.

“They helped me with my business structure, building a website, and getting loans,” he says. “They also helped us connect as a community. Those of us in business here didn’t know each other because we were all so busy trying to make it. Now we support one another, and we have pride in being in something together.”

Diaz knows owning his storefront is the best path to security. His landlord, he notes, “makes us contribute to property taxes, and often tacks on other fees.” Owning, he said, would give him more control over his own destiny.

Julio Diaz, owner of The Sixth Borough clothing store, learned business skills including organization and planning from Allapattah Collaborative.

Alberto Herrera expanded his barbershop from five to nine chairs with help of the Allapattah Collaborative, but now wants to own the storefront to build generational wealth.

Owning a Barbershop Storefront as the Path to Generational Wealth

For Alberto Herrera, storefront ownership is also a way to ensure the future of his son, who has followed him into the barber business. Herrera, 57, learned to cut hair at the feet of his father, who learned from his father, so this has been a family business for generations.

But while his grandfather needed only a comb, a pair of scissors and a chair under a tree, the barbershop trade has changed, notes Herrera. He needs an online presence and an understanding of QuickBooks to keep the business flourishing.

Support and mentoring provided by the Collaborative have allowed him to expand from five chairs to nine, and these days, Don Barber Shop is busy most of the time. He also lives five blocks away, so the community is his life.


Each of these individual business owners is part of a larger story. Across the United States, small Black- and Brown-owned businesses face an unequal path to post-pandemic recovery as well as the challenges of historic redlining and disinvestment. At the same time, they are a significant source of employment while simultaneously supporting the vibrancy of their communities. What’s good for them and their families is good for the country as a whole.

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