After searching for a new home, CommonWealth Kitchen works out deal to stay put in Grove Hall

The food-business incubator will buy its Dorchester property for $7 million, with help from city-controlled funds

Jen Faigel of CommonWealth Kitchen in the Dorchester shared cooking space.Lane Turner/Globe Staff

CommonWealth Kitchen and its supporters in City Hall have cooked up a plan that will keep the food-business incubator in its current home, ending more than two years of uncertainty.

CommonWealth, the city’s Department of Neighborhood Development, and Dorchester Bay Economic Development Corp. have reached an agreement that will enable CommonWealth to buy the 36,000-square-foot former meatpacking factory for a below-market price of $7 million, with the help of a new $2.5 million forgivable loan from the city. CommonWealth currently rents its home at 196 Quincy St. in Grove Hall from Dorchester Bay.

The deal will bring much-needed stability for CommonWealth, whose facility supports about 40 food startups with its shared kitchen and another 15 more mature businesses with its contract manufacturing work. It will also enable the nonprofit to continue charging relatively low rates to its kitchen users, executive director Jen Faigel said, while allowing room for a future expansion.

The sale is expected to close at the end of the year.

“I’m thrilled; I’m exhausted,” Faigel said. “To know we have a permanent home, and that our businesses and the community we are building have a permanent home, and we’ll be in the neighborhood long-term, it’s incredibly satisfying.”

Vera Sizintseva of Jubali stirred vats of almond milk at the CommonWealth Kitchen in 2015.Keith Bedford/Globe Staff

Frustrated by rising rents that were approaching $500,000 a year for CommonWealth’s half of the building, Faigel began more than two years ago to look for other locations. The shortage of available industrial space in or near Boston — many of CommonWealth’s tenants run downtown food trucks or serve downtown businesses — complicated that search.

“We were in conversations to move to places inside the city, and outside the city,” Faigel said. “Everybody’s preference, including Dorchester Bay and the city, was to find a way to stay. [But] at this time last year, my assumption was that we weren’t buying the building and that we would likely have to move.”

Then Sheila Dillon, DND’s director, and Theresa Gallagher, who runs asset and program strategy at the city agency, allocated $2.5 million of leftover funds from a federal Housing and Urban Development program known as Choice Neighborhoods, part of a pot of money that arrived under the Menino administration and had been targeted to invest in Grove Hall.

In recent years, the nonprofit has played an outsized role in jumpstarting many promising food businesses. Faigel estimates that about 70 operating businesses in Boston, most of them owned by people of color, have spent time under CommonWealth’s roof. The businesses that use the shared kitchen today collectively employ around 125 people, while another 20 work directly for CommonWealth.

“Jen talked about leaving the city,” Dillon said. “That is something we did not want to happen. There have been so many successful businesses that have spent time in CommonWealth Kitchen and then moved on. It would have been a significant loss to the city.”

Kereen Pinnock of Deborah's Kitchen stacks jars of jam at the Commonwealth Kitchen.Keith Bedford/Globe Staff

During the pandemic, CommonWealth provided advice for local restaurants and churned out emergency meals for families in need. Social distancing requirements, though, complicated operations and forced CommonWealth to cut back the number of people who could use the shared kitchen at one time.

Faigel said she considers the new $2.5 million loan from the city to be a grant, because it doesn’t have to be paid back. An existing $3.2 million loan that does have to be repaid, also HUD money administered by city officials, will remain on the property. Quasi-public agency MassDevelopment will help with another financing package of up to $2.5 million, including a $750,000 forgivable loan. CommonWealth also plans a capital campaign, to help pay for energy efficiency work and other renovations to the old industrial building.

Paulette Ngachoko, owner of Hapi African Gourmet, produced a sauce for UMass at CommonWealth Kitchen. Suzanne Kreiter/Globe staff

For MassDevelopment chief executive Dan Rivera and chairman Mike Kennealy, helping out was a no-brainer. Kennealy, Governor Charlie Baker’s economic development secretary, said it was important to come up with a creative solution to CommonWealth’s property puzzle. He cited the nonprofit’s efforts, in particular, to help grow nascent businesses owned by women and people of color.

“CommonWealth Kitchen is doing great work,” Kennealy said. “It’s arguably more important than it’s ever been.”

Dorchester Bay chief executive Perry Newman said his organization — which itself is a nonprofit — also needed to keep current with lenders, which limited the concessions Dorchester Bay could offer for rent. Transferring ownership to CommonWealth would give that organization more control, but Dorchester Bay still needed to pay back its existing lenders. The end result is good for the city, for Dorchester Bay, and for CommonWealth, he said.

“We all have to operate in the real world, where a dollar is a dollar,” Newman said. “It makes for challenging discussions. . . . We had to arrive at what we thought was fair: something they would be able to afford and something that would enable us to fulfill our responsibilities to our organization. That was the difficult balancing act.”