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Developers partnering with startup to fill retail spaces | Finance & Commerce




 

Developers partnering with startup to fill retail spaces

By: Cali Owings November 24, 2014 4:57 pm

What would you like to see on the vacant first floor of Sherman Associates’ newly opened West Side Flats apartment building near downtown St. Paul?

A new website is helping developers and brokers ask that question and fill retail spaces with community-supported ventures. As part of a pilot started last week, Sherman Associates is partnering with the startup Hoodstarter to advertise its 6,000-square-foot space on the first floor of its building at 84 Wabasha St. S.Rob Kost, vice president of commercial for Sherman, said Friday the idea to partner with Hoodstarter builds off of the company’s approach to filling commercial spaces.

“On all our buildings, we try to get some buy-in on potential commercial tenants at the community and neighborhood level just to be good developers,” Kost said.

But now they’re taking it to the next level using Hoodstarter to reach out to all of the building’s residents. While he’s not sure what will come of the partnership and community feedback, Kost said “it sure makes it interesting.”

Some of the ideas suggested include restaurants, a hot yoga studio, a brewpub/day care and a butcher shop.

Kost said the site, like Sherman’s other large multifamily apartment buildings, would likely support a restaurant and he’s pursuing a yoga or fitness studio and a smaller retail service, like a coffee shop.

Traditional avenues for commercial real estate transactions don’t have built-in ways for the community to get involved, said Justin Ley, Hoodstarter co-founder. It’s all “handshakes and phone calls” and it’s hard for the public to have a say, he said.

The idea for the startup came from Ley’s own in experience in his south Minneapolis neighborhood. Using online forums, neighbors would dream up ideas for vacant spaces, but they had little ability to make them a reality. Through Hoodstarter, Ley said brokers can leverage community support to recruit new businesses into available retail space. He called it the “sweet spot” between entrepreneurs, brokers and the community.

If there’s enough community support for an idea and a business willing to get on board, Hoodstarter also has crowdfunding capabilities if there are funding gaps, Ley said. This summer, a pair of south Minneapolis restaurateurs used the site to crowdfund a new restaurant called the Locavore Eatery at Oaks Station Place on the Blue Line light rail. It is not open yet.

So far, Hoodstarter is running three pilots of its crowdsourcing effort at the West Side Flats in St. Paul, a vacant commercial space at Chicago Avenue and 38th Street in Minneapolis and Hopkins’ Mainstreet.

The Hopkins-based Beard Group has been looking for a new tenant to fill a retail space at 1114 Mainstreet in Hopkins, vacant for about two years since the Papa John’s pizza delivery chain left, according to Ben Beard, an agent with the company.

While the Beard Group has pursued tenants through its traditional marketing, nothing has stuck. Beard said the company doesn’t usually get a lot of community input on its available retail spaces.

“[Hoodstarter] will connect the dots a bit in a way that is untraditional for us as real estate agents,” he said.

While the space would be well-suited for another pizza delivery service, Beard said the site, in Hopkins’ walkable downtown near the Mann Hopkins movie theater, could also support a use that brings people in on foot and plays off of other kid-friendly retail and entertainment in the area.

So far the ideas suggested for the site are some restaurants, a yoga studio, a natural beauty supply store and a comic book store. Beard said the company will consider the community’s recommendations for the site while pursuing tenants through traditional avenues. If it works out well, he said they would consider using the concept for other retail properties in the metro area.

Over the pilot phase, Hoodstarter hopes to make the site function better for clients and determine whether it helps build more community engagement for retail spaces, Ley said. Then, they’ll look to partner with more brokers and developers with available space.

The pilot portion of the site just launched last week, but Ley said he is already impressed with the community input and ideas generated on the site.

While Ley said there are some “harebrained” ideas (a cat café?), he also noticed that many of the suggestions seemed to really fit the available space.

“People will legitimately sit down and thoughtfully approach what should go in there,” he said.

Read more: http://finance-commerce.com/2014/11/developers-partnering-with-startup-to-fill-retail-spaces/#ixzz3K7OygZ74

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