In July, the North Carolina General Assembly voted to cut the Office of Historically Underutilized Businesses out of the state budget after 27 years of operation.

This office, known simply as the “HUB,” worked with thousands of minority-owned businesses to support their bids for government contracts. The HUB was designed as a tool to assist business owners of color, disabled owners and women owners by tracking state spending with HUB-certified organizations and providing training and educational resources for contract management.

The act further repealed equal opportunity goals for minority- and women-owned organizations, adding to the collection of obstacles that Black-owned businesses face in Durham.

On Sept. 10, a coalition of North Carolina minority organizations, including the Greater Durham Black Chamber of Commerce and the NC Black Alliance, gathered at the International Civil Rights Center and Museum in Greensboro to advocate for a continuation of state support to underrepresented small businesses. 

“The HUB office helped those businesses navigate what is a very complex and complicated procurement process,” Henry McKoy, an attendee at the meeting, said. McKoy is the director of entrepreneurship at North Carolina Central University and the CEO of Carolina Community Impact, a nonprofit financial institution that provides small business loans to underserviced communities.

The HUB office played a hefty role in making North Carolina a leading state in business, McKoy said.

The meeting comes amid a shuttering and scaleback of Black- and minority-owned businesses across Durham, as skyrocketing prices affect owners and consumers alike. Across the city, small businesses are transferring out of brick-and-mortar spaces and transitioning to smaller locations.

The historic Lakewood neighborhood experienced one such shuttering on Sept. 20, when family-run Lula and Sadie’s closed its physical restaurant after six years of operation to transition into a smaller, catering-only business model. The popular establishment served seasonal Southern cuisine alongside investing in various community projects, like a living wage initiative for staff and partnerships with the Durham Art Guild and the LGBTQ Youth Center of Durham.

“We had a very diverse customer base and that was exactly what we were aiming for,” founder and executive chef Harry Monds said. “People from every walk of life came through our doors and were very loyal customers.”

A combination of increasing operating costs and lower turnout at the location drove the closure, Monds said. Almost all of the 15-person staff will be forced to depart from Lula and Sadie’s as a result of the transition.

“We’ve been pretty good at being able to adjust to the cost of product by adjusting our menu however we need to,” Monds said. “But on the flip side of that, the customer is having to pay for higher gas. They’re having to pay for higher groceries. So they don’t have a whole lot of discretionary funds to do extracurricular activities as they once used to. And so they cut out things — like they don’t go out to eat as much.”

Two miles away, another culinary establishment recently departed from its brick-and-mortar space to transition to private events and catering. Flavor Hills, a Black- and veteran-owned restaurant serving elevated Southern comfort food, operated one of four locations along Durham’s Main Street. They closed their doors after just eight months.

“We made the decision because we had to acknowledge that the business model we had was no longer sustainable, and we didn’t want to get to a point where it was a complete detriment to us and to our employees,” owner and executive chef Morgan Teianne said.

Rising prices was the biggest factor in deciding to close. The opening of the Durham location did not generate the sales volume that the team anticipated, Teianne said. Though she said she feels confident about product quality moving forward through the transition, she knows that the closure is a hit to employees and customers.

Alongside the closure of the Durham location, Flavor Hills also simultaneously shut down another of their four physical locations in Raleigh. Teianne said that customers were disappointed to discover that one of the limited restaurants in the area that serve exclusively soul food had transitioned away from a physical space. With each restaurant closure, Durham loses another element of what cultivates the city’s unique, community-oriented identity.

“Closing didn’t just turn off our lights,” Teianne said. “People lost jobs, our vendors lost accounts, our communities lost a place to gather, meet new people, and enjoy good food.” 

Federal antagonism could have a contributing role to play in the struggles that small and minority-owned businesses face in Durham, McKoy said. Among other factors, the city’s prominent situation within the Research Triangle Park makes the area uniquely vulnerable to clashes between the federal administration and university communities, the latter of which makes up a sizable proportion of Durham. Funding cuts or anti-DEI policy changes in higher education can lead to layoffs with potential to destabilize Durham’s financial community.

Durham’s history as an epicenter for Black entrepreneurship arose from and depended on interconnected webs of institutional support, found in organizations like the now-shuttered HUB office. The current obstacles facing beloved, family-owned restaurants and longstanding establishments attack the very infrastructure that helped Black-owned businesses in the city flourish for generations. 

“You can’t disconnect the current political environment — which has impacted the current corporate environment — from what we’re seeing in the broader landscape, whether that be here in Durham or wherever else for the Black entrepreneur,” McKoy said. 

Edited by: Connor Foote