Real Estate Opportunities for Makers and Small-Scale Manufacturing
By Ilana Preuss, Founder, Recast City
When we first met Ilana Preuss from Recast City at the ULI conference in San Francisco last fall, we knew that Fremont could benefit from her expertise integrating manufacturing space for small-scale producers into revitalized neighborhoods. The following Q&A explores the maker movement and how we can best nurture it through the creation of collaborative spaces. A public presentation will take place on the morning of August 17 in Fremont; registration is free.
Q: The Bay Area is the original home to the original Maker Faire, TechShop, and other organizations that celebrate and support the Maker Movement. What exactly are makers, and why are they important?
A: Makers are people who produce something. They may create something as a hobby, as a full-time job, or they may teach other people how to create items. The Maker Movement is important because it shows people that it is exciting and cool to use your hands and machines to create things again. It also promotes that everyone should have access to maker education and workforce training regardless of income, neighborhood, and background. The maturing movement is also graduating people from ideas of making as a hobbyist to launching small manufacturing businesses that are producing goods at scale.
Q: Since Recast City works nationally, you are in a great position to identify themes and trends that provide insight into the sector. Please tell us more!
A: Many cities are looking to makers — especially those creating small businesses — as a vital source of job growth. These businesses are mostly homegrown by people who live in the community and will stay there. The small production businesses also create good quality jobs — often paying 50-100 percent more than retail and service jobs. These mid-tier jobs are often missing from our neighborhoods and are key to creating a strong local economy. Communities across the country are also beginning to recognize that these businesses can help to strengthen local retail areas. The production businesses are quiet and clean. They are great neighbors. And people love to walk by shop windows to see things being made. These businesses can complement the usual retail shops and restaurants to create a more interesting and economically diverse neighborhood commercial area or downtown.
Q: Which cities have impressed you? Who else is on a path to grow local makers?
A: A number of cities are taking big, purposeful steps to retain, attract, and grow local maker industries and small-scale manufacturing businesses. San Francisco and Brooklyn are ahead of most places with major non-profits that organize and promote these local businesses, provide economic development training, and promote affordable real estate. Cities like Indianapolis and Cincinnati have investment from the city and foundation community, respectively, promoting similar initiatives. Small towns, like Grants Pass and Talent in Oregon, are working with local producers to accommodate more of these businesses in their small downtowns.
Q: Is the real estate sector getting on board with this trend? If so, what’s in it for them?
A: Thereal estate sector is beginning to see this business sector as an asset, but we are just at the beginning stages of this. Some developers recognize that small producers can attract a “wow factor” to retail frontage when people can walk by and see something being made. It also allows the developer to bring in local businesses that are truly original for the neighborhood. The major challenge is that most producers cannot afford hot-market retail lease rates. Real estate developers have to think about underwriting a portion of their retail space to expect alower return so that they can create this draw. It often becomes a part of their marketing plan and branding of the new space. Rehabilitation of existing warehouse buildings is often more affordable and accommodates small producers — where those buildings are available.
Q: Besides creating great districts and maker-oriented spaces, what else can cities and their partners do to support makers and small-scale manufacturers?
A: Most importantly, cities need to show small-scale producers and makers that they are wanted. Most of these businesses don’t think anyone is paying attention to them. Cities can help by hosting events, conducting interviews with producers, and creating economic development programs specific to businesses producing tangible products. Many communities consider a “made in” program to brand local products. But I think the relationship between producers, real estate owners, and the city are vital to promote, preserve, and expand the local business community.
Q: What got you interested in starting this business? What is your proudest moment so far?
A: I worked with towns and cities across the country to understand how to implement downtown redevelopment and community reinvestment plans for a long time. I worked in the federal government and in the non-profit sector to help communities adopt smart growth plans to create more housing and transportation choices for everyone. But, I realized that the small business community played a key role that wasn’t being considered. Simultaneously, I got involved in the D.C. startup community and the Maker Movement. And it all sort of came together when I started to meet small businesses that produced goods for retail and wholesale right in my own city. I realized that these businesses are a key piece of the puzzle to create great neighborhoods with strong economies that are accessible to everyone.
My proudest moment — that is tough to pick. I launched Recast City in 2014, and it has been an amazing few years. My proudest moments are when I get to meet the producers in a community and learn about their business, products, and plans for the future. I am consistently in awe of the creativity and business focus of each person, their dedication to making something amazing, and their commitment to the community.