Creative economy

Lindsey is a scout.

October 4, 2023

Lindsey Scannapieco leads Scout, an urban design and development practice that focuses on the activation of underutilized space. Scout’s largest project to date is the redevelopment of Bok into an innovative space for makers, artisans and entrepreneurs. The project has been recently recognized with the Charter Award for Transformational Development by CNU (2021) and long listed in adaptive reuse by Dezeen (2022).

Lindsey has been recognized with the 40 Under 40 by the Philadelphia Business Journal (2023), Girls Inc Community Impact Award (2022), the Rising Star Award in Real Estate (2018) by the Philadelphia Inquirer. Outside of work, she is the co-President of the Friends of FDR Park and an active board member of Fleischer Arts Memorial and the Knight Foundation Advisory Council. Lindsey holds a B.S. from the University of Southern California and a MSc from the London School of Economics in City Design and Social Science.

Read the podcast transcript here

Eve: [00:00:36] Lindsey Scannapieco is an urbanist and an artist in every sense of the word. While living and studying in the UK, Lindsey worked on projects such as activating an underutilized subterranean crossing alongside Westminster Council, supporting Tech Shop in their global expansion, and developing a community led design project that reconsiders traditional construction hoardings in South Kilburn. All of this led her to found Scout, an urban design and development practice that focuses on the activation of underutilized space. Not one to think little, Lindsey submitted a proposal to purchase a 340,000 square foot vocational school building from the city of Philadelphia. Much to her surprise, she won the bid. Eight years later, BOK, as it is called, is a thriving and creative mix of makers, small businesses, and nonprofits, and 100% full. The building is a testament to Lindsey’s staying power. You’ll want to listen in to learn more.

Eve: [00:02:03] Hi, Lindsey. Thank you so much for joining me today.

Lindsey Scannapieco: [00:02:07] Thank you so much for having me, Eve. It’s a pleasure to be here.

Eve: [00:02:10] Yeah, well, I had the pleasure of visiting BOK a few weeks ago. That was, that’s a monster project. I can’t wait to hear how you pulled it off. But first, I wanted you to tell me about your company Scout. When did it all begin and where did it all begin?

Lindsey: [00:02:28] Yeah. I’m so glad you were able to see BOK in person. It’s been a great project, but a little bit about how we got started. So, started Scout in 2011. We are an urban design and development practice, and in the early years we were really working on consulting projects, really about underutilized spaces, primarily for planning agencies in the UK. That’s where Scout was founded in 2011. We did our first kind of big public project that year, which was a pop-up cinema called Films on Fridges. And although a pop-up cinema might seem pretty different from large scale development, actually there was a lot of shared characteristics in both of those projects, which I think are kind of a common thread throughout our work, which is trying to reimagine histories of space and place. I think playfulness is a big piece of our practice and I think inviting people in to have an experience is another part that we think is a really strong tool in any project. And so, we started Scout with this idea of looking at underutilized space in different ways. And in the beginning that started off as cinemas, community engagement projects, public realm work and evolved into development many years onwards.

Lindsey: [00:03:58] And we got the name because when we were talking about it, we were thinking about this idea of both scouting for space, so actually being a scout in that way, but also kind of a Boy Scout or Girl Scout sash in that we were accumulating skills and we didn’t know where they would take us. And so, I remember after we did this pop-up cinema, we got calls from a bunch of people who said, oh, can you do a pop-up cinema here? And we said, actually we don’t want to become known as the pop-up cinema company. For us, the cinema was a tool to bring people to a space that they otherwise would not go to because people are willing to travel for experiences. And so, we kind of put that on our sash or on our badge and turns out that was kind of a skill set or an approach to space that came in handy when we were tackling much larger projects down the line. So, this kind of idea of a tool kit or different badges of different types of skills for how to reimagine vacant space.

Eve: [00:05:03] But let’s go back a little bit even further. So, what sort of training did you have that made you even want to think about scout? There’s surely a lot of story before that, right?

Lindsey: [00:05:17] So my background in undergraduate, I studied real estate finance with a minor in classics and art history. And at that time in my life, I thought I would go into art business because I really enjoyed the arts and that made sense to me, arts and business. I actually think that what I’m doing today is I get to work with way more artists than I ever would have had I kind of gone down that track further. And so I guess after I graduated, I became really interested in urban planning and development and then pursued a master’s in City design and social Science at the London School of Economics. And through that work focused my studio on an area adjacent to what was then the 2012 Olympic site called Hackney Wick. And from there started to work for the London Legacy Development Corporation, where I led interim uses, which was looking at kind of the opportunity of spaces before the long-term development plan comes to fruition, but is kind of a better alternative to just fencing or hoarding a site. And I think through that work was really the impetus to starting Scout and started Scout a little bit because of that role. I was encouraged to start my own company and to be able to kind of work for them as a consultant. And then through that we took on more clients and grew a team and grew projects and that was over a decade ago now, which feels pretty wild to say today.

Eve: [00:06:57] So how would you say your approach differs from a traditional real estate practice?

Lindsey: [00:07:03] I think one of the first things that we do is I think often times in development, people bring ideas for a project into a space. And so, they’re saying, I know what I want to do and I’m trying to force this building to do that thing. I think what we’re interested in is really looking at the infrastructure, the assets, the physicality of a building as it exists and finding value and usefulness in that and almost listening to the building, letting the building tell you what it should be and how it should be used. And I think, you know, we can be quite precious, I think, about development sometimes and sometimes actually there’s a real practical piece of what a good building can be or can provide, particularly in our cities. And so, we’re really interested in that. I say oftentimes I’m really interested in dirty work and that kind of means to say the work that doesn’t happen at kind of our clean desks. That unfortunately is often very fragile. It’s usually moved to, you know, the edges of our city. It’s at risk, it’s sometimes happening in buildings without proper heating or roof systems or it’s just, you know, warehouses we see, every single day, being converted into residential or kind of, quote, higher and better uses. And so, I think we’re really interested in the preservation of those spaces, and I think how we can allow spaces of experimentation and growth in cities, I think that’s really something that we’re very passionate about.

Eve: [00:08:49] Yeah. So, you moved out to Philly? That’s right. What was your first project there?

Lindsey: [00:08:55] So we moved Scout to Philly for BOK.

Eve: [00:08:58] Oh, okay. Okay, I didn’t realize that. So BOK came first and Philly came second.

Lindsey: [00:09:05] A bit, I’m from Philadelphia, so for me, it was a bit of a homecoming personally, but we had submitted to an RFP for this big old school. It’s a 340,000 square foot school. It occupies an entire city block. It’s nine stories high. It has a very commanding presence over its surrounding neighborhood. And so, we submitted a response to the RFP. And to be quite frank, we never thought that we would get it. I just thought we would learn something about what that process was like in the US. And we had been looking at buildings, but at the time in London we couldn’t afford a building in London, so it made sense to go to another place that I had familiarity. And to be honest, we were shocked when we found out that we were the highest bidder. I was also the youngest bidder, I was obviously the only female bidder and so said, uh oh, we’ve either done something really right or really, really, really wrong. And so we jumped in and built a team in Philadelphia to start to take on that project. We had a year about of due diligence before we actually closed on the property from the school district. And over that period of time, we realized that the building is not flexible. It was built as a bomb shelter. It was extremely resilient, and it has, you know, incredible floor cores and floor strengths. It was built as a vocational school. And so I think most people had said to the city, and I don’t know this, I’m just, you know, speculating that they said, I’ll give you a dollar because to convert the building into residential or something that was more market driven would have required a ton of money and they would have said there’s no way that they could tackle that.

Eve: [00:10:58] Yeah, I’ve been to the building. I’m not even sure it’s possible. It’s really, really tough. Very inflexible, as you said.

Lindsey: [00:11:07] And so we embrace that. And so, we said, you know, how do we take spaces that aren’t flexible and how do we actually allow them to stay that way, allow them to stay what they want to be? You know, that means that, you know, an old woodworking shop became a home to a woodworker, an old culinary arts classroom, became home to a catering company. And so, you know, it really was about looking at the infrastructure and matching that to people who could use the space.

Eve: [00:11:35] You saw the existing infrastructure as an asset rather than something that needed to be like swept away and replaced.

Lindsey: [00:11:43] That’s exactly right.

Eve: [00:11:45] Yeah. So, when you submitted your RFP, what did you tell the city you were going to do with it?

Lindsey: [00:11:50] We told the city our vision was exactly as it is being used today. We said that our goal was to create affordable workspaces and they were not just going to be for artists or nonprofits. It was a yes and, so art spaces, nonprofits, community services, small businesses, people who just need access to spaces to be able to work. We had a theory that South Philly, which is an extremely dense part of Philadelphia, is a neighborhood with a typology of kind of the 12- to 14-foot-wide row home so that, you know, people didn’t really have access to larger, wider open spaces. And so, you know, we had a theory that people would be seeking that space and seeking that space in proximity to where they live. And I think when we talk about local impact and community led development, I think the ability to walk to work has such an incredible impact not only on your mental and physical health, but also the health and wealth of your community and your neighborhood at all and attracts all different types of people to support the small businesses and operations that are happening in the building. So today we have over 260 businesses based out of BOK.

Eve: [00:13:14] A lot of businesses.

Lindsey: [00:13:15] And 72% of them are owned by somebody who lives in South Philadelphia. So very much locally driven.

Eve: [00:13:25] That’s amazing. How many residents in South Philadelphia like how big is the neighborhood?

Lindsey: [00:13:30] Oh, that’s a great question.

Eve: [00:13:33] It’s got to be big to draw that many people.

Lindsey: [00:13:36] Yeah, I’m just, hold on, I feel like I have this number somewhere, but I’ll have to look it up. I don’t have it off the top of my head.

Eve: [00:13:44] Nevertheless, it’s got to be a big neighborhood to have that many people wanting small business space. How long had the building been vacant?

Lindsey: [00:13:52] So the last graduating class at Bok was in 2013.

Eve: [00:13:58] Oh, not so long.

Lindsey: [00:14:00] So not so long. Although the top two floors of the building had been closed before we took it on. The building was a high or is a high rise, I should say, by its height. But the school district, in order to not comply with high rise building code, cut off the top two floors and said, see, it’s not a high rise so we don’t have to sprinkler the building. And so that was one of the big pieces of work that we undertook was the sprinkling of the entire building. But essentially it really wasn’t vacant for long. And crazily, the school district thought that out of all the schools that they put on the market, and they put over 30 schools onto the market in that year, that BOK would be the last to sell. So, they actually moved all of the stuff, all of the chairs, all the tables, everything from all the other schools to Bok. And people could essentially come and kind of find the furniture that they needed. And that was that was fine and good and when we went to actually go close on the property, obviously we wanted the building empty because there was rooms just filled with stuff up to the ceilings. Plus, it was practical stuff. And we all know that our schools need equipment, they need supplies, they need furniture. Unfortunately, approaching the end of the process of moving towards closing, they started to throw out things and we said, all right, that’s it we’ll keep the rest. So, if you go to BOK today, sometimes you’ll see, for example, children’s chairs and a lot of people will say, well, wait, wasn’t this a high school? And it’s because they thought that BOK would be the last building to sell, and I actually think it was one of the first.

Eve: [00:15:39] That’s interesting. So, when you tackle a project like this, 340,000ft², most people would feel overwhelmed. You had some really huge challenges like code compliance and financing. Where did you begin? What was your strategy and how full is it today, by the way? Is it 100% occupied?

Lindsey: [00:16:02] It is. Today, BOK is 100% leased. We have no available space in the building, Unfortunately, I know I’m supposed to say that’s a good thing, but I actually think it’s a bad thing because for so many years we’ve prided ourselves on being able to expand and grow with people as their business changes. And it’s actually been, it’s hard now when you actually are full. But I think we also feel very grateful to be at 100% occupancy. So how did we start this? I always kind of say, you know, how do you eat an elephant one bite at a time? But our first bite was a decision to open up a pop-up bar on the roof of the building. And I think kind of going back to the beginning of this conversation, that’s because that’s something that we had done before. And I think that people are willing to travel for food and drink in a way that we’re not willing to travel for other things. We talk about traveling for other things. I talk about going, you know, maybe to a neighborhood I don’t go to frequently for an art exhibit or a shop, but most of the time it actually takes a lot for me to actually get there. I can think about it. But to actually get there and food and drink and I don’t know if it’s because it’s a shared activity or because there’s actually kind of a sweet adventure at the end but we kind of really knew that that was a strong tool and had seen that in the past.

Lindsey: [00:17:33] And so we opened up a pop-up bar and the joke is that I invited a bank every single night for a drink until I closed on our big construction loan, which I did. And, you know, we were open for 22 nights that first year and we had over 30,000 visitors. And so.

Eve: [00:17:54] Oh, wow.

Lindsey: [00:17:55] You know, I think a lot of people were saying, who’s going to come? How’s this going to work? How are people going to find out about this building? How are you going to deal with the parking needs? Who wants to be in a big old school? And I think for a lot of people, whether that was neighbors, future tenants, partners, bankers, politicians, coming upstairs to a very full and vibrant bar allowed them to say, wow, there’s something here. And people are willing to come here to find it and be a part of this place. And so, I think actually that was helpful in convincing people that, A, we could pull things off and make things happen. And we did that within 30 days of closing on the building, mind you, because I really feel strongly that oftentimes in development we wait years, we talk about grand visions, we undertake the large scale, you know, development, construction, and then we have a ribbon cutting and we’ve actually never had a ribbon cutting for BOK and never will, obviously at this point.

Lindsey: [00:19:07] But the idea of kind of incremental growth, I really believe that slow is really healthy actually, when we’re talking about large scale projects in a city. I don’t think it’s natural, normal or good to just open up the doors and add 350,000ft² of activity to a neighborhood. It’s much better to have that be an iterative process where people get to know you, you build trust. You also learn what works and what doesn’t work. There were mistakes along the way, you know, where should the trash sit, for example? You know, we moved that around a few times before we got it to the right place where trash trucks could access it and it wouldn’t disturb neighbors. And so, you know, I really believe in kind of iterative and slow development, but I always kind of say the bar is the thing that started it all. And that really allowed us to gain the momentum and the confidence of our team, even our neighbors, all of our collaborators and partners in that something was possible here.

Eve: [00:20:15] So as you built this thing, what other major challenges did you face during the project? Because you built it slowly with 200 tenants. It’s a lot of space.

Lindsey: [00:20:28] So it’s funny because I think sometimes your greatest strength is also your biggest challenge. And so, I say, I really like the idea of slow development, of iterative development, of the idea of the building kind of taking and evolving over time. And it really has. It took seven years to essentially finish all the construction pieces. And I’d actually argue that there still are pieces of the building that we still want to tackle or want to go back to or kind of take further. But I say that, at the same time one of the biggest challenges is that that meant that we were doing construction while we were an occupied building. And so that was also a challenge. There’s no other way to say it. We installed the sprinkler system actually when we were probably at 40% occupancy, something like that. We had outlined a scope of work with the fire board where we would basically install major infrastructure every six months with a kind of timeline of completion. So new standpipes, for example, went into all stairwells, I think for the first year. And then the second year we sprinklered a part of the building and then the next part and the next part. And so, I feel very grateful for the creative minds in the fire board and the city who kind of allowed us to create a safe building together, knowing that that was a huge piece of infrastructure and a huge cost item. But also, it was just a real operational challenge in terms of we did that work overnight in occupied spaces. So, I think, you know, to every strength also sometimes has its drawbacks too.

Eve: [00:22:14] I mean, financing is something that you fill slowly, is got to be really difficult as well because you need revenue to pay the loans. And how on earth do you manage that?

Lindsey: [00:22:25] Yeah. So, a similar approach in that how do you eat an elephant that one bite at a time and that our first loan was actually really just based on an appraisal of the building. We had had a zoning change and so kind of was able to argue to the bank that, you know, it was now worth three times more than essentially it was purchased for and it was purchased very cheaply, I think that should be acknowledged. We purchased the building for 1.75 million, although as I said, we were the highest bidder by a lot apparently.

Eve: [00:23:00] You could say that was a huge liability when you purchased it.

Lindsey: [00:23:03] Oh, 100%. But I actually think that that kind of that low entry per square foot is actually really essential in terms of allowing you to take a more creative approach. And I think, you know, Jane Jacobs says this best when she says, you know, new ideas must use old buildings. And I think it’s really because, in that when you’re getting a building for cheaper, that’s kind of been considered less valuable, it actually has more opportunities for experimentation in it and less pressures on it. And so I actually think that’s a really important piece of the puzzle. But essentially, we first got our first piece of funding just based on the kind of increase in value from a zoning change. And then once we signed kind of our first couple of leases, we kind of showed them that this was working. We were able to increase that by, I don’t know, 2 million or something like that, and then we increased it again, then we increased it again, and then we brought in new market tax credits and historic tax credits. And I had to condo out the buildings that I could kind of apply different financing pieces to different pieces of the puzzle as they came online. And that’s how we got it done.

Eve: [00:24:18] A little bit at a time. So, what about the community in the neighborhood? What role have they played in this revitalization of this, it’s a huge building sitting in the middle of a very dense neighborhood, as you said. It’s very, very large.

Lindsey: [00:24:32] Yeah. So, one of the first things we did when we started the project is we did a community asset mapping and I would encourage everyone to do that before you start anything kind of on your on your own turf, which is to look around you and see what’s already working and what already exists. Because I really think, although, you know there are certain characteristics of our neighborhood that we wanted to speak to, we started off by saying, how can we help the existing agencies, communities, organizations and people that are already are, you know, symbols of strength or kind of have agency or have organizing efforts within the neighborhood? And I think one of the best examples of that is a group called SEAMAC, which is the Southeast Asian Mutual Aid Coalition. And we invited them in to use this space for their elder’s breakfast on Tuesday morning. And so, they did that for 3 or 4 years. And through that partnership, which was pretty loose, you know, we were just giving them free space to be able to have their elders breakfast, they were able to work with Jefferson Hospital System to bring in a health clinic called the Wyss Wellness Center, which is a primary care health clinic. So, anybody can go and see a doctor there for primary care, but they’re specifically trained in the immigrant and refugee needs of our neighborhood, both language and cultural sensitivities. And that has just been an incredible resource for our community. Not just South Philadelphia but think of Philadelphia at large. A lot of the refugees recently who have been kind of bused into the city, that’s actually their first port of call in Philadelphia. And so, it’s really become an incredible space and anchor for that community. But that took almost six years to make happen. And so, I do think it really is about building trust and understanding how you can enable and support the growth of organizations that are already A, doing the work and B, very trusted within the community itself.

Eve: [00:26:52] I’m just fascinated about who the tenants are. Tell us a little bit about the mix of people in the building. I was lucky enough to walk through it, so I some of it’s burned into my brain, but I think you need to describe it a little.

Lindsey: [00:27:06] Yeah. So, we have over 260 businesses based in the building today. And of those, 52% are women owned businesses, 25% are minority owned businesses. And think about 15% of the building is nonprofits. And so, what that means is that we have everything from a glassblower who’s also doing glass recycling, to a daycare, to a tattoo parlor, to architects, jewelry designers, fabric printers, a tufting workshop, photographers, graphic designers, an accredited art school that focuses on contemporary realist painting, so a lot of work on the nude form and portrait work. We have a bakery called Machine Shop Bakery, which was just nominated for a James Beard Award in the pastry category. We’ve got a restaurant, Irwin’s, which has been rated one of the top ten best new restaurants in America. We’ve got a fabric recycling center, we have Girls Inc, which is a national nonprofit supporting young women, we have ballet classes, we’ve got a catering company, we have ceramic makers. It’s all types of people doing all types of things. And I think that’s actually really, really important, is that it’s not just a building for one type of person or one type of use. It’s a building for a lot of different uses to happen side by side.

Lindsey: [00:28:41] And I think one of the questions we always get asked is, oh, is there kind of a jeweler’s row or wing? Is there kind of the carpenter’s wing? Is there the band wing? And, you know, how much do you kind of curate this building and this space? And the answer is that we really don’t curate the building. We allow people to find spaces that suit their needs and their budgets. So, if somebody has a budget of $500, we’re trying to find a space that fits that budget and has the infrastructure that they need, that’s a sink or a lot of power. But the thing that we are really conscious about is sounds and smells. So, the people who make a lot of sounds and aren’t sensitive to sounds, they do go together. But beyond that, there’s not a ton of curation. On the first floor, obviously, we very much focused on things that are more public facing and want to interact with the public, because ultimately a lot of the building is just a workspace, not just but is a workspace. And so, people don’t necessarily want people knocking on their door saying, can I buy a, you know, a product that you’re making right there? They’re really there to focus.

Eve: [00:29:53] And how big is the team that manages all of this?

Lindsey: [00:29:56] Yeah. So, we’re about ten people, 10 to 12 people. And this, none of this would be possible without the team. I have an exceptional team. We have a facilities director who is just wonderful, is constantly, as an old building, it’s constantly moaning and groaning and he’s kind of there to oversee it with a great facilities crew. We’ve got a director of operations, we have an events team that does a variety of different events in the building we do around, we do weddings, we do community events, we do self-initiated events like Open Studios, for example, is one of them. Alumni Day, where we invite people to come back who are alumni of the school and so just have a great team. And I think that’s just so, so, so important for the project to be able to get to where it is today.

Eve: [00:30:53] But it’s not a traditional leasing and maintenance team, right?

Lindsey: [00:30:59] No, I mean, most of our leasing is done in house. I think over 50% of the people that we’ve leased to this is their first commercial lease. So, a part of our process has been trying to break down some of the jargon and lease terminology that really people aren’t familiar with outside of the leasing world, to help people to feel comfortable making that first big jump into a space. And in our work, we’re not working with a lot of large credit tenants. I think in the most more recent years we’ve had a few, but generally, and particularly the early years, we had no credit tenants. And so the idea of trying to lock somebody into a long term lease really doesn’t make sense for us or for them. And so really, it’s about allowing people to test and experiment and see what works and see what doesn’t work. And at the end of the day, if it doesn’t work for them, we’re lucky enough that there’s been enough demand and the scale of the space is kind of a very, I think, attractive size that that’s okay. It’s okay for us to have, you know, people move on and move out if it’s not the right fit. And we’re not locking people into leases that are longer than they can really take on.

Eve: [00:32:19] I think you and I see eye to eye on that. I’ve always been very disturbed at the real estate industry that rewards leasing agents based by commission, because of course, that means that they’re going to focus more time on larger leases. And so I have a couple of buildings where I took pretty much the same attitude. You know, shorter leases were fine. And if they could only renew for a short time, that was fine too. And what’s happened is I’ve had some tenants in some of my spaces for 15 years just renewing one year at a time or expanding and eventually moving on. But yeah, there’s just there’s something really broken with the industry that doesn’t allow for that to happen more freely. I think unfortunately, you know, real estate agents have to make money like they’ve got to live, right? But if they’re going to make $200 on a small lease, of course they’re going to spend more time on renting a big space where they can make $10,000, right?

Lindsey: [00:33:21] You know, I wonder if Covid has made anybody rethink that, because I always joke that in the beginning of Covid, I think I was my first bank call. They were like that building with all of those non-credit tenants. It’s, how are they going to fare through Covid? And the reality is that we fared better than any other building, a commercial building and my bank’s portfolio or any bank’s portfolio.

Eve: [00:33:47] Dare I say that’s because it’s 50% women owned businesses?

Lindsey: [00:33:51] I mean, I also think, you know, listen, it’s small scale. I think, you know, a third of our building is under 800ft². And so, you know, when somebody decides to close their business or move to Maine or move to Mexico or wherever it was that, you know, whatever they decided to do kind of in the pandemic.

Eve: [00:34:12] It’s a tiny percentage of the whole building, right?

Lindsey: [00:34:15] It’s a tiny percentage. And so we were able to kind of, you know, stay flexible, stay nimble. I think we also created a really incredible program around rent relief and deferment for our tenants, where we gave over $300,000 of rent relief and support. And that meant that we basically had, I think it was under 10% turnover during Covid. And so, you know, I hope that the industry as a whole looks at buildings like ours and says, oh, these buildings that we’ve always thought are more risky because they don’t have large anchor tenants, they don’t have the credit tenants, actually, there’s strength in the small and that there’s something very strong about our ability to be nimble. But at the same time, you know, I think it’ll always be interesting to see how that grows and goes. But I hope that maybe it’s made some of the industry just rethink a little bit about kind of who we think are dependable.

Eve: [00:35:13] You know, I’ve had a similar experience. I’ve got a building that has these, it’s much smaller, but it has these 13 little studios that range from 400 to 800ft². And I keep telling people I wish I had four buildings like that because it really never lost steam during Covid. And the people who are looking for space now want space like that. And I’m thinking about how to subdivide larger spaces to turn them into these little spaces because, yeah, I totally agree with you. If it’s a, it’s much easier for a landlord to manage than losing an entire floor plate of a building.

Lindsey: [00:35:51] Yeah, I mean, it’s a lot of work. I think like, you know, doing 260 leases versus doing, you know, ten or something would have, you know, but we think it’s also more interesting. It’s the type of people we want to work with and…

Eve: [00:36:03] Much more interesting.

Lindsey: [00:36:04] I would take it every day. So.

Eve: [00:36:06] So what other projects is Scout working on today, or is this just keeping you busy full time?

Lindsey: [00:36:13] No. So, we’re starting to work on other projects, which is very exciting. So, we actually are working on two projects up in Providence. One is called 50 Sims, which is a manufacturing building that will be workspace. We have some great workforce development tenants in there today. We’ve got a great brewery; we’ve got people doing CNC training and forklift training and we have a boat builder and an artist studio and a preservation society that’s teaching people how to repair historic windows. So, we’re really, really excited about that project and excited to be also working in a new city. It’s been wonderful. I think Providence has a lot of similarities to Philadelphia and we’ve really enjoyed being a part of that community.

Eve: [00:37:11] And how big is that project?

Lindsey: [00:37:13] It’s around 110,000ft².

Eve: [00:37:17] Oh just weeny. Weeny Scale.

Lindsey: [00:37:20] I think for better or for worse, once you do big buildings, everybody calls you about big buildings. So, I think we have to get comfortable in this space.

Eve: [00:37:29] Yes. Yes. One other question. Is collaboration important in your projects? I know that’s what you started out doing with Scout, but how is that morphed into BOK? Who do you collaborate with? What does that look like?

Lindsey: [00:37:44] So yeah, Eve, there’s a few different things that come to mind there. I think we collaborate a lot with artists on site specific pieces. So, if we are looking for furniture, for example, for a space, we’re typically commissioning and working with local artists, oftentimes people in the building. In the last couple years, we’ve also done two amazing projects that are pretty different than our kind of real estate development practice side. So, we’ve done two projects for the flower show in Philadelphia, which were both incredible collaborations with a whole host of different creatives and makers in the city. The first year we did a Risograph printing house where we printed aspirational posters, or inspirational I’m sorry, inspirational posters to give people hope in 2021, kind of following the year of 2020 that we had all been through. Three of those posters were in a language other than English to speak to the population of South Philadelphia who previously really didn’t have any materials in their languages at the flower show. And then last year, I guess in 2022, we did an installation called The Smelly Tunnel, which was essentially just a piece that you would walk through, and it would mist scents on you. And the idea of kind of flowers in terms of our mental health and kind of the ability to just step back and breathe. And so pretty different from our kind of management and development of a large building. But I actually think are great examples of things that A, make our team really excited and B, kind of that that collaboration. And so, I think we like working at a lot of different scales and find that kind of continuing to keep our hand in some of those small scale installation work that makes our kind of our long term development practice also stronger.

Eve: [00:39:43] And one more question for you, and that is I’m wondering how your time in the UK influenced your perspective on the built environment.

Lindsey: [00:39:53] I think there’s so many examples in Europe, I think, of how adaptive reuse is encouraged and I think just really done well. I think that’s certainly something I think that the value of both the creative community, but also of the cultural community, of cultural institutions, cultural organizations, has a different value in Europe and a different, I think, support system in terms of actually how those entities are funded compared to here in the US. So, certainly drew inspiration from many projects that I had seen and worked on there in Hackney Wick. There were some great examples, The White Building being one of them, and Amsterdam and DSM, I think was a, is an incredible example of kind of a building where the government really allowed people to experiment with what was possible and has now become kind of a center, a cultural center in Amsterdam. So, certainly it was a was a huge inspiration, is a huge inspiration and certainly informs my work. And I think, you know, this idea of kind of allowing things to stay a bit unpolished, unruly, but also surprising, I think is just certainly something that continues to inspire me, and I certainly travel to get to see projects like that, that continue to just be an inspiration for our work here.

Eve: [00:41:27] Yeah, it’s pretty amazing when you can say government did something so fantastic. We should be able to say that all the time, right?

Lindsey: [00:41:37] It would be nice.

Eve: [00:41:38] I have one more question for you. What keeps you up at night?

Lindsey: [00:41:41] Oh, so many things, to be honest.

Eve: [00:41:44] Maybe nothing. Maybe nothing.

Lindsey: [00:41:47] Oh, no, I wish I could say it was nothing. I mean I think to be honest, um, maybe I’ll start with where I think the kind of the opportunities are in that I think we are seeing cities shift. We are seeing obviously a lot of office space come online and I think there’s an opportunity there. And just thinking about what types of workspaces we need. I think, again, that kind of dirty workspace is something that doesn’t actually work well in our homes. And I think particularly for creative individuals, I think collaborative and creative environments are really key as sources of inspiration. And you know, people work better in those communities than perhaps they would in a basement or a, you know, a guest room or whatever it is that they might otherwise be working. So, I’m excited to see how that evolves. I think I am always just, I think, I don’t know if you feel this way, but it always feels still very fragile, and I always feel like I’m, it’s hard to enjoy the successes because I’m always fearful of the next hit.

Eve: [00:42:58] Well, that means you’re prepared, right? I mean, I think, yeah, it’s scary, but it’s probably healthy too. If you don’t have any fear, then you’re probably being too cavalier because there will always be a next hit, right? There will always be something else.

Lindsey: [00:43:16] There will. And particularly in old buildings, there’s always the next hit. I think that’s the reality. And so, I think that certainly always keeps me up. And, you know, I think just also as we’re in this next phase, I think of trying to figure out, you know, what’s next for Scout as we’ve kind of gone to the city of Providence and I think we’re looking elsewhere, I think that’s something that’s certainly keeps me, kind of, keeps my brain thinking at night about all the possibilities and projects that we might take on. So…

Eve: [00:43:50] Well, it’s been a pleasure talking to you, and I can’t wait to see what you do next. You have to stay in touch. It’s very, very exciting work. I really appreciate it.

Lindsey: [00:44:00] Thank you. I would love to. I’d love to show you our next projects and the next ones after that. And I know many years ago when we were starting back, we came out to Pittsburgh to visit you.

Eve: [00:44:11] Yes, that was a long time ago. A long, long time ago, yeah,

Lindsey: [00:44:14] Long time ago. So, you’ve certainly been an inspiration and a part of this process.

Eve: [00:44:19] And maybe, sometime you want to even crowdfund one of your projects.

Lindsey: [00:44:23] I would love to explore.

Eve: [00:44:24] Can’t mention which one.

Lindsey: [00:44:30] That would be great.

Eve: [00:44:31] Thanks very much, Lindsey.

Lindsey: [00:44:32] Thank you, Eve.

Eve: [00:44:43] I hope you enjoyed today’s guest and our deep dive. You can find out more about this episode or others you might have missed on the show notes page at RethinkRealEstateforGood.co. There’s lots to listen to there. Please support this podcast and all the great work my guests do by sharing it with others, posting about it on social media, or leaving a rating and a review. To catch all the latest from me, you can follow me on LinkedIn. Even better, if you’re ready to dabble in some impact investing, head on over to smallchange.co where I spend most of my time. A special thanks to David Allardice for his excellent editing of this podcast and original music. And a big thanks to you for spending your time with me today. We’ll talk again soon. But for now, this is Eve Picker signing off to go make some change.

Image courtesy of Lindsey Scannapieco

I finally found my tribe.

July 27, 2022

Jim is an infill developer and sustainable development advisor based in Sonoma County, California. Known for his aspirational but practical approach, he works with a range of tools and best practices to communicate the value of inspired design and sustainability within the realities of local market norms. With over forty years experience as an urban designer, land planner, sustainability strategist and now infill developer, he brings a broad range of perspectives and skills to the discussion about how communities grow. Trained as a landscape architect, he received a Master’s in Real Estate Development from Massachusetts Institute of Technology (MIT) as way to more effectively integrate economics, development and design thinking.

An active member of the Urban Land Institute (ULI), Jim was at the forefront of defining the tenets of sustainable community design, serving as co-instructor for ULI’s pioneering program in Sustainable Community Design. He continues his leadership as founder and lead instructor for ULI’s program focused on small scale incremental development. He has organized and led fifteen national tours where participants explore the impact and benefits of non-institutional approaches to real estate development, and how it creates stronger local economies and more authentic places. Drawing on his own experience and the work of others seen during these tours, he authored Building Small: A Toolkit for Real Estate Entrepreneurs, Civic Leaders and Great Communities. Published in April by ULI, the book has quickly gained a national following from all professions engaged in shaping the built environment.

To Jim, small does not mean insignificant. His work emphasizes the idea that Small is oftentimes Big, and his ULI forums have brought together developers with this same value system, giving them a place in real estate and encouraging them to create change.

Read the podcast transcript here

Eve Picker: [00:00:09] Hi there. Thanks for joining me on Rethink Real Estate. For Good. I’m Eve Picker and I’m on a mission to make real estate work for everyone. I love real estate. Real estate makes places good or bad, rich or poor, beautiful or not. In this show, I’m interviewing the disruptors, those creative thinkers and doers that are shrugging off the status quo, in order to build better for everyone. If you haven’t already, check out all of my podcasts at our website RethinkRealEstateForGood.co, or you can find them at your favorite podcast station. You’ll find lots worth listening to, I’m sure.

Eve: [00:01:00] Early in his career, Jim Heid worked on humongous real estate projects all over the world as a management consultant. Over time, the diversity of places he lived and worked in shaped his appreciation of small, community-centric places with soul. He moved his head and heart from a loft in downtown San Francisco to the tiny 12,000-person town of Healdsburg in California, where he is building his thesis that small is big. There are some big things that Jim is working on. They include his small-scale developer forums, which are growing bigger. A recently published book called “Building Small: A Toolkit for Real Estate Entrepreneurs, Civic Leaders and Great Communities” and real estate projects that are small and meaningful. Jim Heid has a big story to tell, so listen in.

Eve: [00:02:04] If you’d like to join me in my quest to rethink real estate, there are two simple things you can do share this podcast and go to rethinkrealestateforgood.co, where you can subscribe to be the first to hear about my podcasts, blog posts and other goodies.

Eve: [00:02:29] So welcome to the show, Jim. I’m really excited to talk to you.

Jim Heid: [00:02:33] Yeah, I’m happy to be here. It’s long overdue, right?

Eve: [00:02:36] It is. I met you a while back. I don’t even know how long back, through the ULI Small Scale Developer forum. So, my first question to you is, like how did the theme Small Scale, which will emerge as we talk, come to take center stage in your professional life? And actually, what does that even mean in your professional life?

Jim: [00:03:01] Those are two loaded questions. So, I’m going to start with the first of all, how did I get there? Why am I so passionate about it? And then I can talk a little bit about at least how I’m defining it. There’s those moments in your life that you remember pretty clearly, and I do remember the kind of, the aha moment for me with Small Scale, which was coming out of a ULI meeting. It was a spring meeting in 2011. I was talking to a colleague of mine. I don’t know if you know Howard Kozloff a great guy.

Eve: [00:03:28] I do know that name. Yeah.

Jim: [00:03:30] Yeah. Southern California, developer. And we were talking about we’ve spent a good part of our careers attending, participating, teaching for ULI, really loved the organization and its mission, but felt that a lot of the content was increasingly focused on really big stuff and it kind of was like, Hey, if I’m not $1,000,000,000 rete or a multimillion dollar six block project, like where do I go anymore? Where do I get content? Where to get inspiration, where to get tips? So, we came up with this idea that there needed to be some place where people, like ourselves, that wanted to. We weren’t doing small deals to get to big deals, we wanted to do small deals because we felt they were important. And I can talk a little bit about why, but I felt they are really important and personally very fulfilling. So, it became a passion, took the form through support of ULI into the small-scale forums. We’ll talk about how the forums fed the book and all that kind of stuff. But the definition of small scale.

Eve: [00:04:36] Well, you know, let me add something, because right when you were figuring out a solution, I decided to quit ULI for exactly the same reason I thought, I don’t belong here. These are not the sorts of projects that really interest me as a developer, and I don’t see how I fit. So, I think you were looking to address exactly what I was feeling.

Jim: [00:04:59] Yeah. And I think the hope was to create a safe place within the organization that could embrace this idea and bring people together. And now, with this incredible focus on DEI, the comment is that’s where the emerging developers, the people of color, the people who want to reinvest in their neighborhoods and make a difference in the built environment where they’re from or where they live or where their neighborhoods and their families are. They’re starting at the small scale and so.

Eve: [00:05:30] So small is now big, right?

Jim: [00:05:31] Yeah, small is well, that’s my other venture now called the Initiative to Make Small Big, so yes.

Eve: [00:05:38] Okay.

Jim: [00:05:39] But so, the other question you had was how am I defining small or how do we define small? And, you know, it’s a great question that’s hard to answer because this is an industry that’s extremely quantitative. It’s all about square feet. It’s all about returns. It’s all about dollar value of a project. And after ten years and working on the book and trying to come up with that singular definition of small really came to the idea that it defies a a quantitative definition and it’s much more qualitative. And so, small is the way that we’re defining it. And in the book, there’s the ten hallmarks of small. It’s typically coming from sponsors that have a very clear core set of values. It’s people who are investing in their neighborhoods and care about their neighborhoods.

Jim: [00:06:29] It’s really the attitude and perspective of the developer. It’s developers that have skin in the game and are typically long term holds. It’s not about fix and flip and move on opportunistically. And the biggest thing that I say about small is it’s people that are involved in this and are working in the small genre. See real estate as the means to the end as opposed to the end itself. And what I mean by that is they’re focused on creating human connections, community uplift, creating great places, bringing economic value to their communities, but also building wealth. This is not philanthropy. This is using disciplined capital and execution to create real estate. But they’re doing it in pursuit of something bigger, which is creating great places, as opposed to simply just building real estate as an asset class.

Eve: [00:07:20] So basically, I always say, you know, I could never build a building as a commodity, right? You know, just as a way to make money. It’s way more than that because people experience buildings in the city and they live, the buildings make the places they live in. So much more.

Jim: [00:07:37] Yeah. So, my shorthand that’s evolved after a lot of these kind of presentations is it’s about building community, not commodity, to your extent, and it’s about doing transformations, not transactions. And so, yeah.

Eve: [00:07:49] So what are the ten hallmarks then in your book?

Jim: [00:07:53] Well. So, it’s a clear sense of purpose, commitment to positive evolution of neighborhoods, understanding and building on the assets of fine-grained street character and neighborhoods. So, instead of building amenities, it actually sees the neighborhoods and what is in the neighborhoods as the amenity and how they add to it. It’s entrepreneur individuals and organizations seeking a contextual and best use for the neighborhoods so very much about what I call context and connections. And those connections are both physical as well as social. Long term agility and flexibility. So, kind of future proofing, thinking about assets, these are not one offs that can never be adaptively reuse, and obviously a lot of the stuff that we see in small is adaptive reuse because there’s a story there, there’s a soul and character and it has an impact on the neighborhood, transforms buildings, and it’s kind of a commitment to transform building sites into economic assets.

Jim: [00:08:52] Again, this idea that this is not philanthropy, this is not unreplicable, the idea is this is disciplined use of capital and good development skills to create a model and an approach both at the enterprise level and the project level that many people can scale up and do. And then, the contextually responsive community responsive and market differentiated. So, what I often say is a lot of these projects are very experientially based and they’re focusing on creating the experience which feeds the sales as opposed to just focusing on what’s my lease rate. It’s like, what am I going to create in? What we see in most of these is if you get the experience right, you create something unique, the rates and the revenues follow pretty handsomely.

Eve: [00:09:36] Interesting. But all of this came after many years of these forums, right? Which you developed, and I’ve been to a couple and really, really love them because I do feel like I fit in there. So, how do they work and how many have you had and where’s the next one?

Jim: [00:09:54] Glad you asked because this is kind of like the best thing I get to do in my world. And so, the epilogue to the aha moment that I had with Howard about, hey, how do we create a place for this conversation? And what I like to say, we’re not trying to disparage big, but we’re trying to elevate small so that civic leaders, people that are interested in the built environment, capital sources, can start to consider it as another alternative approach to real estate as opposed to binary, it’s either big or small. But anyway, so when we were talking about this, and at the time I had been teaching a number of programs for ULI, first the Sustainable Community Development, then the advanced residential, then mixed use projects. They asked for some new content, and I said, Well, maybe there’s a place where we could create a forum for people that are interested in this, small scale developers. And we thought it would be a collection of people that were interested in getting into real estate that maybe had just graduated or leaving some other profession, design, brokerage or whatever else, and wanted to kind of learn the basics of real estate, but again, apply it in a small kind of workmanlike way.

Jim: [00:11:04] So, we did the first one in San Francisco in 2012, so a decade ago, and we’re blown away that what we got was not people coming into the profession, but a lot of people like you and I, people who passionately and deeply believed in this, who had a lot of experience and were desperately seeking what has become, the short end is I finally found my tribe. It’s a group of people who share the same values are dealing with the same challenges. There is one woman said, I’m an investment committee of one. I’ve got to make these decisions myself, which is, leads to incredible agility but also is very nerve racking. So, we did the first one in San Francisco that was good, went on, did one in D.C., went to Seattle, Miami, and every time it grew and we were getting people not one time but every time.

Eve: [00:11:56] A real tribe, right?

Jim: [00:11:58] Yeah. Yeah, real tribe. So fast forward, we just did our 17th one, just completed our first decade. It was in San Antonio. We had 80 people. It’s a two-and-a-half-day program where we do panels and case studies and tours, and a lot of it is networking where people are now sharing pro formas. I’m constantly calling up some of my colleagues and say, hey, I’ve got this contract. I need this kind of a clause. Have you ever done that? So, it’s become this…

Eve: [00:12:30] It’s become a big board, right? A big board for your project.

Jim: [00:12:34] Yeah, it’s an open-sourced approach to small scale development as well as I mean, the feedback that I got from the last one is like, you know, I just always leave so inspired. I’m ready to move forward with my projects. It’s so nice to find people who feel the way I do. I thought I was like living out here on my own. And so, it’s become a great thing. And we go to a different city every time. So, as I said, we just did our 17th one or 18th one will be in Nashville in November.

Eve: [00:13:01] I think I’m going to come to that, hold a spot for me.

Jim: [00:13:04] We have people now that have been to 15 or more. So, it’s become, like I said, a real thing. It’s kind of for people in the small-scale space, it’s their annual or twice a year conference where they really love to get together.

Eve: [00:13:20] That’s awesome.

Jim: [00:13:21] Just as a quick sidebar, one of the super fun things that we do and we tried this about, I don’t know, I guess it’s been about eight years ago, but we called it the small petracca slam or Cochon char or how we say it.

Eve: [00:13:33] Pachuco, I think it’s called.

Jim: [00:13:35] Yeah, we were trying to figure out a way that people could introduce themselves without the mind-numbing things that typically happen when you go to conferences. Hi, I’m Jim Heid from Healdsburg, California, I’m an infield developer. So, about eight years ago I asked people to send me three slides and they get 15 seconds for each slide to talk about a project they’re doing a value or hold or a trend they’re watching. And I put it all together into one slide deck. We do about an hour-long cocktail hour, and then after the hour, after everybody’s been appropriately lubricated, we just turn it on and people go and pass the mic. And it’s this like firehose of amazing projects and people’s values and what they’re doing. And then it creates this bond where people like, oh, I saw this thing you were doing in Minneapolis, I’ve got something similar. How you doing this? So, it really opens up the door for conversations, but it’s also super fun and amazing to see the diversity of stuff that is going on in this space around the country. That’s the other thing I should say is of this 70-80 people that typically come, we’re probably getting somewhere around 30 different states represented.

Eve: [00:14:44] That’s amazing.

Jim: [00:14:45] So this is not a local audience. It’s a national audience.

Eve: [00:14:46] You know, it sounds a little bit like Small Change. 30 states represented, an amazing variety of stuff. Yeah, really interesting. So, yeah, hold a space for me in Nashville.

Jim: [00:14:59] Okay. I will do.

Eve: [00:15:00] Okay. And when is that?

Jim: [00:15:03] We’re still trying to pin down the dates. It’s a Sunday, Monday or Tuesday, so it’s either six, seven and eight or 13, 14 and 15.

Eve: [00:15:11] Of which month?

Jim: [00:15:12] November.

Eve: [00:15:14] Okay, so the forums grew into the book, which you described, and who should read the book and why?

Jim: [00:15:25] So, in the genesis of the book was, so let’s see, it was it was Denver, so it was our 2016. So, it would have been probably our ninth one that we had done. And I remember flying back and I’m like, every time we go to one of these, I am so inspired by what people are doing. I’m so frustrated at the stories they’re telling about the barriers that are thrown at them and how hard we are making this to do when in fact so many people want it. Because while I was doing that, I had my consulting business, Urban Green, and I was doing a lot of community outreach and facilitation work for projects. And I would go into towns and people would say, you know, we want stuff that fits better. We don’t like these big formula projects that come in from out of state. We want small scale. We want this, hey, I read this thing and strong towns or incremental development. That’s what we want.

Jim: [00:16:14] And so, and then I would go to the forums, and I’d listen to these people who have done these beautifully crafted projects and listen to the pain and suffering and years of struggles from a capital standpoint, a regulatory standpoint. And it was like, this is a really important story, and somebody needs to tell the story both about the projects and how valuable they are to the community, but also the barriers that most places have put up to make this harder rather than easier than big development. And so, started whittling away at this idea of the book. And it originally was going to be kind of this journalistic opinion about small scale development and then quickly grew into this life’s work that is basically three parts. It’s the what and why of small. So, the definition that we talked about and then why it’s important not only urbanistically, but as a critical part of a resilient local economy and the value of the inextricable link between locally owned businesses and small real estate, and how important that is in economic cycles to have people that are really invested in their community as opposed to just a bunch of out of town lessees that will mail back the keys the first time they run into trouble.

Jim: [00:17:28] And then there’s a whole how-to toolkit, which is about a third of the book or two thirds of the book that was really meant to explain not real estate 101, but what is different about working in this small space than what they would teach you in grad school? And so, I say this is what they don’t teach you at real estate school section. And then the last one is classic Urban Land Institute case studies. And you’re profiled in this because we thought it was more than just talking about projects. It was really important to talk about the people, the agencies, the non-profits that were at the vanguard of this and how they were accomplishing it. Because we wanted people to pick up the book and say, oh, we could do that. This person did this, and I share those values as opposed to, oh, that’s a cool project. What’s the numbers look like on that? So, who should read it falls into two camps and it was written very specifically to two audiences. The first one is the real estate entrepreneur. The people who want to pursue this as a career path or are already in it. And we’ve had a lot of universities now that are using it as a textbook for their design schools.

Jim: [00:18:39] We have some non-profit housing providers that are actually using it as part of their emerging developers curriculum program. And you ULI, a number of the district councils are using it as part of their real estate diversity initiative. But then the other audience was meant to be civic leaders, planning staff and even citizens who are going around all the time saying This is what we want but don’t realize how hard they’ve made it.

Jim: [00:19:04] So, it’s part inspiration and call to action of what’s possible, then it also breaks down in a pretty common sense way of when you make it more difficult to get approvals, you increase the risk, which means the capital costs more, if you can even get the capital and therefore a lot of the community benefits that you think the developers should pay for can no longer pay that because he’s had to pay for it as entitlements or the project doesn’t work. So, there’s a pretty broad audience, and my favorite thing is when people are buying this and giving it to their council members or they’re planning commissions or there are a lot of people who buy like ten or 20 and have me sign them and give them to their whole town council staff. When I get city managers that call me up and say, you know, come talk to me about this, I’ve got this site and we’re trying to figure out what to do and maybe we should try a small approach. So, you know, I think we’ve reached the broad, and then obviously there’s a lot of real estate entrepreneurs. People come in and they’re like, oh, I love this. I’ve been waiting so long for this. It’s just, you know, the other quick thing that I’ll say about the book is this, I was two years late delivering it and actually finished it during COVID. But I say it’s a much better book because during those two years I did two projects of my own and that personal journey and what I learned and the nuances beyond the academia, what the real details and just the personal introspection of what you’ve got to go through to really succeed, found its way into the book, I think as more than just a how to it’s how to do this and how to survive the rollercoaster as a small developer when you’ve got everything hanging out on the line and not sure.

Eve: [00:20:47] Right, it is a roller coaster. Sounds like the book took longer than a real estate project.

Jim: [00:20:51] No, the book was four years. The projects were, well, one was three and one was five. So yeah.

Eve: [00:20:57] So right in the middle.

Jim: [00:20:59] Right in the middle. And they all finished about the same time. So, last year was pretty big.

Eve: [00:21:06] So let’s talk about your projects. So, I’m fascinated by first of the fact that you live and work in Healdsburg, California, which is a small town, and the two projects I know about really exemplify sort of entire community life. One is directed at small businesses and the other is directed at small residences. And the first is craft work, which is a co-working space, which I think you opened right when the pandemic began.

Jim: [00:21:35] 63 days before the shelter in place. But who’s counting?

Eve: [00:21:40] And the second is one that it looks like it was, I don’t know when it was completed, but River House, which is 12 residences also in that town. So, tell me about craftwork first, why did you decide to develop a co-working space? That’s another business again, you know.

Jim: [00:21:57] Yeah, well, back up first, I’ll just gives some quick context for Healdsburg. So, Healdsburg is a town of about 12,000 people an hour north, door to door north of San Francisco, right at the center of kind of the wine and food culture in Sonoma County and has an incredible kind of historic walkable urbanism DNA and it was discovered, really discovered and kind of current trajectory about 2000 we bought a place here in 2003, it was a weekend place. We would come up from the city we were living like right downtown San Francisco in the warehouse district and a loft. So, it was our perfect little town and country lifestyle. And then in 2013 sold our place in the city and moved up here full time. It’s one of those things where every Sunday was a.

Eve: [00:22:43] That’s a Really big move. That’s a big move.

Jim: [00:22:45] It’s a big move. And it was one of those things where every Sunday where you’re packing up the car to go back to the city and your job and then you’re say, oh, it’d be so nice to live here. Really would hate to go. And so, finally we reached the point and said, well, you know, there’s nothing keeping us in the city. We were both independent, you know, mobile. So, it’s like, okay, let’s move up here and do that. So, when I moved here, you know, it’s a small enough town and parochial in some ways that until you really live here, you don’t have as much credibility as when you do. And so, I moved here and then I had all this experience through my consulting and my work with Urban Land Institute and a lot of the projects I’ve worked with around the globe. So suddenly I had this opportunity to bring and test what I’d learned other places to a small town with great DNA that was experiencing, I wouldn’t call it rapid growth, and I’ll tell you about that in a minute, but it was experiencing certainly increased visibility and desirability. Smithsonian ranked it the number two town in the country to visit one year. It’s got one of the one of the top five town squares. So, it gets a lot of press and visibility.

Jim: [00:23:51] So, I had come back from our Detroit forum and each of our forums are themed around something and that particular one was themed around co-working, urban manufacturing and makerspace. And so, we toured a number of co-working spaces in Detroit, and they were really phenomenal. First of all, I just love the aesthetic, I love the concept, I love the kind of community and the flexibility of that. This is so, you know, I can do this. This is what I want to do. So, I came back to Healdsburg, and I live one block from my co-working space and which at the time was an empty, vacant 5000 square foot bank in a sixties strip center between my house and the coffee shop that I went to every morning. And I would walk by it, and I would fantasize about, wouldn’t it be cool to do that? You know, I could do that. And this is a town that even though it’s only 12,000 people, it’s fairly well-to-do. You’ve got a lot of people who I call tech emigres that have left the city and are now living their life up here, but they’re working remotely. Got a lot of people to come through, stay a weekend and want to connect into the town. They want an authentic experience. They just don’t want to do the stuff that’s on the Three Perfect Days in Healdsburg kind of thing. So, I naively said, well, yeah, I can do this. And I talked to a couple of friends and they’re like, yeah, I know this makes total sense. So, this was this was about 2017, we started the discussion. So, WeWork was still in its heyday and rapidly growing. I don’t think even industrious, I don’t think industrious was around. But anyways.

Eve: [00:25:30] No, industrious is later, I think.

Jim: [00:25:32] Yeah, yeah. But the whole co-working phenomena and leading edge and all that was going on. And again, I loved it. I wanted to get my hands dirty, not just write about something, not just go to forums. I want to get my hands dirty. So, it seemed like a perfect opportunity. So, really funny story. So, I go to the landlord. So, this is built in 60 by a gentleman who has now passed away. So, I am dealing with his son and the son’s daughter. The son is 90 and the daughter is 67. And I walk in with my beautiful flipbook, you know, cribbing pictures from WeWork and all the really cool, sexy co-working spaces. And I say, I’d like to lease the space and I’m going to build this coworking space. And they look at me for a minute and they say, well, my dad said, you never should put office in your retail centers. And I’m like, well, don’t think of it as office. Think of it like a gym. Think of all the people moving through here. And, you know, it’s 5000 square feet. It’s been vacant for a while. And with Amazon and everything else is not going to be a lot of takers for the space. So, within a span of about an hour, a gentleman who is 90 years old kind of put the piece in. He’s just like, so if I was young and I came to town and I wanted to start a business, I could just get a desk and I wouldn’t have to, like, sign a lease and I wouldn’t have to, like, get internet and pay for cleaning. And I’m like, yeah, he’s like, wow, that’s a really cool idea. We should do that.

Jim: [00:26:57] So, we struck a deal and then I embarked on the design and planning, and I spent a lot of time talking to people I know I spoke to you about, like, how do you build a performer? What are the metrics? What’s the industry trends? There was a woman in Petaluma who had done one, and she was enormously helpful in terms of thinking through how people in these markets use co-working versus how they do in an urban center. And again, being a fairly upscale community, I knew this couldn’t be shag carpet and beanbag chairs for people with flip flops and hoodies. Our demographic is probably mid-forties professional. So, I immediately created this kind of verbal image of Hotel Healdsburg, which was our upscale hotel, beautifully done by David Baker, Banshee Tasting Room, which was eclectic, cool little hip tasting room meets flying goat coffee, which was the beloved coffee shop where everybody went and worked. And when I would explain that to people, they immediately got it. And so then embarked on the, the design, the construction turned out beautifully. People love it, had a lot of really interesting.

Eve: [00:28:10] And you got through COVID, how did you do that? What did that?

Jim: [00:28:13] So yeah, that’s a great story. And I think it’s, I’ve had these conversations with some other people in co-working. I mean, part of it is the town, but a big part of it is, I think the premarketing and our pitch was, and the business thesis was these small lifestyle towns. This is going to be an incredibly important community asset. It’s not just a business, it’s a community asset, a hub, a place to connect, a place to have informed conversations that talk about the future. And so, I spent a lot of time telling that story. I was telling Jamie Russo when we were doing this podcast on this. So, one of the first things I did was I put a survey out via the chamber that said like, would you be interested in a co-working space? We’re going to open this up, yadda, yadda, yadda. What would you like an office dedicated to? Just to see if there was any market depth. Got a lot of response right away. And then I called up and contacted everybody that said they wanted an office. And I started to talk about, well, what is it that you want? What are you going to need? What do you do? All this kind of stuff. So about two years of creating the story, building the trust. I think marketing and this isn’t just coworking, this is a community asset.

Jim: [00:29:27] So, to answer your question, when we finally got open, which is about a year after we promised we would, people were a very excited about it and B really believed that we were doing something important for the community. This wasn’t just another retail front; this was an important community asset. So, when COVID hit. People said, look, no, no, no, you’re too important to go away. Keep billing me. You know, I’m not going to come in, but I want you to maintain my membership. And so, that lasted for probably 90 to 120 days. And then people said, whoa, this could take a lot longer than I thought. But we immediately were able to backfill because a lot of people had left San Francisco, took an airbnb out in the country. They worked in tech. They didn’t have good Internet out there. So, we kind of backfill with that. And then by September, a lot of people are like, hey, I can’t work at home. The kids are there, we’re home schooling, no bandwidth or whatever else. So, we limped along. The PPP was enormously helpful. It was maddening at the time, but.

Eve: [00:30:31] It was helpful, wasn’t it? It was helpful.

Jim: [00:30:32] Hugely, hugely helpful. And then we just kept staying visible. One of the things I was really most proud of, so when shelter in place hit and it was really ugly, we did a thing called small joys for sheltering in place, and every Friday we picked a local vendor in town and we would curate for 20 bucks some kind of an offering bag of coffee and a jar of granola flowers for Mother’s Day, whatever else. And we would, we’d put it on our site and we’d send it out to our mail list, and then you would come pick them up on Friday. So, people came in and they were like, hey, can we participate? Hey, you know, we love what you’re doing. It wasn’t a lot, but we raised like $10,000 for the all the individual business owners and we ran that for about 12 weeks. So those kinds of things.

Eve: [00:31:20] So you’re a strong marketer.

Jim: [00:31:22] Yeah.

Eve: [00:31:24] Yeah, that’s really fascinating. So, you got through that. And then the second project, which is maybe even more challenging, I think the town has a minimum lot area ordinance of 6000 square feet, is that right?

Jim: [00:31:39] Well, it has all kinds of things. This is a case of where people want what they want and what the codes say are two different things.

Eve: [00:31:46] Codes can be enormously challenging. But you designed and developed an infill project that is very much in keeping with the town and I have a feeling took a lot to get to that point because of the way that zoning codes are. Just talk about that. This is 12 residential living units with ADUs and a whole variety of features that I think are probably unusual for the zoning board to see, right?

Jim: [00:32:16] Well, yeah. It was. So, quick stats just for people that are into this stuff. 12 units, 1.2 acres. So, ten units per acre, all single family detached. We did it all with as of right zoning, which is kind of unheard of. And in California we have very onerous environmental processes, and we got an exemption because we met all of the criteria as infill. But I said a little while ago that we’re not a high growth town because two decades ago, in the town’s infinite wisdom, we passed a growth ordinance that limits the town to 30 permits per year. So, I’ll say that again, 30 permits per year. So now everybody’s screaming about how expensive housing is because it’s high demand and we’re only building so many new ones here. So, we had to deal with that. How do we get enough allocations to build that? How do we do with these minimum lot sizes, which had to be 6000 square feet?

Eve: [00:33:09] That’s insane.

Jim: [00:33:10] Had some prescriptive dimensions of 60 by 90, and then we had some environmental considerations. But it’s a classic cottage court where the 12 units are pretty much organized around a central green space. Cars are subordinated to the rear, kind of a neo traditional, where there’s two alleys that flank it. It’s kind of a square site, the site lent itself to it very well. And big front porches facing onto the green and fairly good private space, and all done in a contemporary farmhouse style. So, a lot of references to kind of home, I think in people visually but also updated for contemporary living. And the big thing with this project and I just came back from a builders’ conference where we won a bunch of awards for it and I was explaining to a panel I was on is so many developments design, especially in these land, more land lot, developments. They lay out the lots and then they just plop the houses into it that will fit on the lot. And in this case, working with Dan Parolek from Opticos Design, we designed the urban form. So how do we want the homes to mass? How do we want them to shape the green? And then once we did that, we lotted them. And so, the lotting plan is highly gerrymandered. And to the town’s credit, once they saw the urban form and what we were trying to do, they understood that the very confusing lotting plan was the only way we were going to get there without having to go through a rezoning and all this kind of stuff that would drag it out way too long.

Eve: [00:34:43] Interesting.

Jim: [00:34:44] You know, the end result when you’re in the space is is actually quite magical. And super successful. We came to market July 4th last year, sold it out in five months.

Eve: [00:34:58] That’s amazing. Because some of the features are things that people say will never work. Detached garages, the units face a little sidewalk, right. A little pedestrian area. And there’s shared green space.

Jim: [00:35:12] And this is a classic case of where the processes and sometimes the people. So, I’m at planning commission and I’m showing this in one of the commissioners says I’m not going to carry my groceries in the rain. You know, you’ve got to attach the garage. And I’m like, look I’m the developer. I’m taking that market risk. That’s not for you to decide. Does it meet code or doesn’t it? But they’re opining on stuff. And then the other thing we did was we painted them all white, and we used different. So, we use shingles and some lap on some board. So, there’s a very subtle kind of textural shade and shadow difference, but there’s a continuity and a harmony between them and, oh my God, you know, I mean just.

Eve: [00:35:51] The they opined about the color.

Jim: [00:35:53] Oh, yeah, white. Oh, I hate white houses. You know, I have one in my neighborhood and they’re too bright. So, no, you can’t do that. And fortunately, the other commissioners are like, you know, I think that’s going to be pretty elegant. So, there’s these personal biases that people bring to these conversations, and they’re not even trained as designers, so they don’t get it. But they’re in this position of power.

Eve: [00:36:11] And then I think some of the other big moves you talk about, I’m a trained urban designer myself, and I think people don’t understand why they love spaces. But that’s what urban designers are trained think about. You know, how to make good spaces. So, you talked about using the existing trees as amenities and framing views. So, there’s a lot that went into the public space design of these 12 houses. Little in the houses themselves. Right. For a little project. You had quite a list of consultants.

Jim: [00:36:43] Yeah, we did. We did. You know, it’s interesting you say that, but the space is so again, at the PCBC last week, one of the jurors was glowingly talking about that and saying, you know, the layering of semi-private to private spaces, the size of the space and the scale of the space. And it’s my background’s landscape architecture, so it’s probably a little less concerned about the buildings and more concerned about how to in the world. She said, a lot of great trees on the site. So how do you use those too? As one of the other, one of my favorite lines last week for the juror was the trees allowed you to cheat history. So, it felt like this thing had been there. I mean, you go out there, you feel like it’s been there for probably 30 years. It looks like the Presidio.

Eve: [00:37:23] Versus the trees kind of make my car dirty, right?

Jim: [00:37:27] Yeah, exactly. And so, to your question, so the people that have bought there, there was a conscious pivot. It was a very interesting study in human psychology. So, buyers came in, I think almost universally loved the project. They were inspired by it. They loved the way it looked. It was beautiful. They loved the trees. They loved everything about it. But then they very quickly came to a fork in the road, and they said, but I’m not really that social and I really don’t want people seeing me on my porch. I’m a little more private. Or they said, I love this idea and I love the fact that spontaneously I’m going to go out to the green and have a drink with some friends or I’m sitting on the porch and people stop by. So, there was a natural selection that occurred by people who wanted that lifestyle, and so they’ve actually made it happen. So, it’s fascinating to me how much the group has gelled very quickly, do things together, spontaneously, gather in the green for happy hour and all that.

Eve: [00:38:29] It’s almost like co-housing, but not quite.

Jim: [00:38:31] It is, yeah. Without the kind of somewhat cultish idea that at least co-housing makes people think of. I know it’s not that there is a thing, but it is. Or we call it intentional.

Eve: [00:38:46] Yeah. So, is it too early to tell what has worked well and what hasn’t?

Jim: [00:38:53] I mean, definitely some good lessons. I mean, the thing that I missed on that was I call it barbecues, trash and dogs. So, one of the things was keeping things very open and kind of granular. But in the end, we had to add a lot more fencing than I originally would have thought, because at the end of the day, people have small dogs, they don’t want their dogs running away. So there had to be fences around that. What do you do with the trash when this is a layout where every square inch mattered and we kind of missed that. And then the other thing is like, what do people do with their barbecues? You know, it’s like, don’t really want to put them on the porch and risk, you know, creating a fire under the roof. So anyways, there are a couple of little things like that. I think the green, the scale of the spaces is really good. We spend a lot of time like how big is too big? How small is too small? And I really feel like we nailed that really, really well. The subordinated cars, I think people again that don’t really fret over having to carry the groceries love the fact that the cars are out of you.

Jim: [00:39:58] My marketing line was you sit on your front porch, and you look at the green, not your neighbor’s driveway. And, you know, so it’s a very different kind of visual experience. So, the other thing that we kind of, we were trying to be very egalitarian, so the green faces the street, and it faces the river across the way, which had been neglected for years. And so, we spent a lot of money to clean up the river and make it part of the amenity. And now one of the challenges we had was everybody in the neighborhood thinking it was their park. So, coming in and having picnics or bringing their dogs in, but not being responsible for them and stuff like that. So, we had to figure out some fairly low key ways to say this is a private, this is people’s private front yards. You wouldn’t walk. You don’t want people walking in your front yard, you know, be respectful.

Eve: [00:40:45] It’s a wonderful story. So, let me ask you, what was your life before small scale? What did you do?

Jim: [00:40:53] You know, it was almost the antithesis of it. It was big. And when I, I don’t know if you saw my TED talk, but the TED talk was I spent my life doing big projects. I mean, literally around the globe, 25,000 acres in the desert of Nevada, Australia, 3000 acres, 10,000 homes. And I was into community design. Two things were happening. I noticed in every one of those projects, after hours, wherever I was, I went to the cool little nitty gritty alleys and spaces and kind of emerging areas, and that’s where I wanted to hang out was probably the most inspired. And then I would come back to these big master planned projects, and I’d say, how do we get that kind of level of what’s now called tactical urbanism, but place and grit and you know, often talk about we’ve gone from greenfield to grit as kind of the cool thing now, and it’s like, how do you create that? And I would work with these big developers, but they, yeah, they couldn’t rationalize it. Their funders didn’t get it, it never met. And so, I finally got to the point where it’s like, I believe in this. I’ve seen it, I need to try and do it. And my sister once said to me, like, why are you doing this now at your age? And I’m like, well, because if I get to your age and I haven’t done it, I’m going to be really mad at myself. So, I kind of went all in and you know, I mean, it’s the classic entrepreneur story. Second mortgage on the house, couldn’t find financing so went in all myself and you know the story, jury’s still out, but it’s been enormously fulfilling personally and to see the reaction and all the things as you said people tell you that won’t work and then you do it and they’re like, oh my god, why don’t we have more of this? This is so great.

Eve: [00:42:42] I can see you having a lot of fun, it’s inspiring for me. But I have to ask you a question now. This is like loaded. So, in amongst all of that you do, all these community projects, you know about equity crowdfunding, you know that it’s gradually taking its place in the capital stack, although most people still don’t know it. Do you think there’s a role in building communities using that tool?

Jim: [00:43:10] Oh, absolutely. I had no doubt. I think it has not found its stride yet. But I think we’re getting to, there’s enough consistency, coalescing in the conversation that people want something different. They realize, you know, California, the state legislature, there’s been a lot of pretty significant changes to help facilitate different and break through the NIMBYism and the barriers. And I think people are starting to recognize that unless they put their money where their mouth is, they’re not going to get different. And, you know, that’s not going to be everywhere. But I mean, where we are, again, we’re a fairly well-to-do community. I have a couple of partners who’ve invested in River House and yes, they wanted a return. Yes, they wanted to make sure they weren’t going to lose their money, but they were equally interested in doing something to demonstrate another way to do what we were getting and be a part of that change. And I think people want to do that and they’d like to be able to access that in a way that it’s not a $200,000 commitment. It’s Yeah, I’ll put 1000 and I’ll put in 2000. And we hear those stories a lot through the forums, the people who’ve done well, a lot of the times, entrepreneurs, they’re at a point in their life where they’ve done well, they’re well off, and they’re like, you know, I want to I want to help somebody else have the ride that I did. I want to support somebody. I like their energy. I like what they’re doing. I want to help. So, we need vehicles to do that. And I think, yeah, actually you were in Seattle when we did that panel with Kevin Cavenaugh, Lorenzo. And I don’t if you remember the guy who…

Eve: [00:44:51] Oh, yeah, I’ll never forget because Kevin, no one knew if he was going to actually show up.

Jim: [00:44:55] Yeah, yeah. Well, and then he had 80 slides and I said, you only have 10 minutes, don’t worry. And he was like, awesome. But at the, after that panel, the guy that stood up and said, raise his hand and gets up, and he said, look, I am from the institutional capital markets. I absolutely love what you’re doing. I believe so much in this. You do not want to talk to me because we will never get this. And so, there’s a lot of people saying, oh, we need to get the institutional capital. They’re never going to get it. And so, we need another vehicle and the crowdfunding and the people that care. But we do need to get along with giving people the vehicle to invest in their communities and take part in this. They also need to just become more educated about the relationship between the risks they create in the difficulties of approvals, of getting things done, and then how secure their investment is.

Eve: [00:45:44] Yeah, I mean, I think that’s the most difficult thing about this is with crowdfunding, you’re letting in a sea, 97% of the adult population who never had the ability to invest before. So, you have to educate them on the risks of investing, what it means to invest, the role they’ll play, and also real estate. How do you invest in real estate? It’s not a widget. It’s a different form of investment. I think the educational piece is definitely lagging. Okay, one more question for you, and that is you must have something else up your sleeve. What’s next for you?

Jim: [00:46:20] Oh yeah. Well really trying to say formalize the forums, they’ve been a work in progress. But I really want to see those continue to grow because they built so much momentum. And my dream is a really big kind of national seminal conference on small scale development. That’s 200 people in the coolest city that’s all around small you know, toying around with the idea Savannah, and really brings together, because there’s a lot of people working in this space and what’s already a fragmented business is further fragmented by everybody having their own little megaphone and not coming together.

Jim: [00:46:58] So that’s one thing. The other thing that I’m working on is a program called Small Coach. And a big part of my journey over the last six years has been participating in an entrepreneur’s coaching program called Strategic Coach. And it’s been really, really helpful in terms of not only tools around business and realizing your goals, but also balancing your life. But the one thing that I miss is it’s kind of industry agnostic. So, I’m trying to develop a curriculum for real estate entrepreneurs that is not just like raising money and getting through construction and entitlements and all that kind of stuff. But also, how do you manage your life? How do you set your goals? How do you embrace the fact that you’re an entrepreneur and make the most of it and really celebrate that? So, that’s hopefully we’ll launch here in the next the next couple of months. I’m hoping to get it off the ground in September.

Eve: [00:47:52] Well, this has been delightful. We should have really done two podcasts. I’m sure there’s a lot more to talk about.

Jim: [00:47:58] I told you I talk a lot.

Eve: [00:47:59] But we’re going to talk more offline. And thank you very, very much for joining me.

Jim: [00:48:04] Yeah, thanks for the opportunity. I hope to see you in Nashville in November.

Eve: [00:48:08] Definitely will. I’m going to make it happen.

Jim: [00:48:10] Very good.

Eve: [00:48:17] Jim Heid has found his tribe. Slowly but surely, he is bringing together like-minded thinkers with his forums, his book and his real estate projects. His path from big to small is inspirational.

Eve: [00:48:39] You can find out more about this episode or others you might have missed on the show notes page at our website RethinkRealEstateForGood.co. There’s lots to listen to there. A special thanks to David Allardice for his excellent editing of this podcast and original music, and thanks to you for spending your time with me today. We’ll talk again soon, but for now, this is Eve Picker signing off to go make some change.

Image courtesy of Jim Heid

New markets for main street.

May 11, 2022

NuMarket was born out of the pandemic. Ross Chanowski founded the social crowdfunding platform in 2020 because he felt there wasn’t a way for communities to purposefully support the survival and growth of their local businesses. In an interview with The Boston Globe, Ross said that he wanted to develop a way for customers to meaningfully support the businesses they love while, yes, getting something in return.

On NuMarket, main street businesses raise funds for a variety of reasons like renovations, expansion, a popup, a new product line or even a second location. But instead of going to a bank to get a loan, they go to their customers, raising funds through contributions made in an online campaign on NuMarket. The payoff for each contributor is 120% of their money back in credits that can be used at that business. Contributors receive a bonus from the businesses they support, and those businesses get much-needed funds from the customers who love them! To date, NuMarket has helped 23 small businesses raise funds through successful campaigns with more coming. The amounts raised vary, but the largest (and first) raise was completed by Mamalehs, an iconic delicatessen in Cambridge, that raised over $185k to open a second location. Prior to launching NuMarket, Ross was living in the UK, completing his Master’s degree work in social innovation at the LSE. While there he found time to co-found Jungle, a collective of creative thinkers, designers and strategists growing companies with social impact, working to build product ideas with intrinsic impact. Their current project is Jungle Brew – cold brew coffee designed for socially impactful behavior. Past engagements for Ross include Allen & Gerritsen and Draftfcb and an internship with former House representative Barney Frank. Ross is currently an advisor at the Kenarava Group in Kenya, “a progressive company offering climate-smart agribusiness solutions for a healthier, sustainable future.”

Read the podcast transcript here

Eve Picker: [00:00:12] Hi there. Thanks for joining me on Rethink Real Estate. For Good. I’m Eve Picker and I’m on a mission to make real estate work for everyone. I love real estate. Real estate makes places good or bad, rich or poor, beautiful or not. In this show, I’m interviewing the disruptors, those creative thinkers and doers that are shrugging off the status quo, in order to build better for everyone. If you haven’t already, check out all of my podcasts at our website RethinkRealEstateForGood.co, or you can find them at your favorite podcast station. You’ll find lots worth listening to, I’m sure.

Eve: [00:01:04] Ross Chanowski wanted to help when the pandemic hit, so he founded the social crowdfunding platform NuMarket as a way for communities to purposefully support the survival and growth of their local businesses. He wanted to develop a way for customers to meaningfully support the businesses they love while yes, getting something in return. Ross has put his background in marketing and a master’s in social innovation and entrepreneurship from the London School of Economics and Political Science to good use. Numarket helps Main Street businesses raise funds in a compelling way. Make a contribution to a business you love now, and you’ll get goods and services back with a 20% bonus, ten bagels become 12 in your tummy, all the while supporting the bagel shop you love. It’s a lovely story about a lovely business. Please listen in to hear more. If you’d like to join me in my quest to rethink real estate, there are two simple things you can do: share this podcast and go to rethinkrealestateforgood.co where you can subscribe to be the first to hear about my podcasts, blog posts and other goodies.

Eve: [00:02:42] Hi, Ross.

Ross Chanowski: [00:02:44] Eve, it is great to see you and hear you.

Eve: [00:02:48] I’m really happy to talk to you today. And, you know, Numarkets is one of my favorite companies. I’m really excited to talk to you. So let’s talk about Numarket. NuMarket, I think, is a pandemic, baby, right?

Ross: [00:02:59] It is, yeah.

Eve: [00:03:01] When did you found it and why? And how?

Ross: [00:03:05] As we all have found, pandemic time feels like a very odd construct. So thinking about two years of being in it, I’m still not quite sure when it started. Now we got going, we launched into the world in February of 2021, and the impetus and the idea and research behind New Market, I think had been happening for years before that and a lot of interesting in different ways. But when the pandemic hit, there was a clear insight that everyday customers of businesses and people in communities desperately wanted to do something positive for the places that that they love and that they need. And we were all struggling to find ways to do that. We were hashtagging on Instagram. We were tipping our delivery drivers and bartenders on the way out. We were buying gift cards, kind of doing anything we could, but it definitely didn’t feel like we were giving the kind of support that we could. And on the flip side, businesses were finding it incredibly difficult to get financing at the time to survive. But for decades before that, to to thrive and to open. And so there was something of matching those two up, this desire to support and be a critical part of independent businesses and businesses that couldn’t find avenues to financing that worked for them. So that’s where NuMarket came from. And what we do is we create crowdfunding campaigns for those businesses to raise money from their customers and community. But the contributors to those campaigns, they get more back than what they put in, 20% more, actually, as credits to use towards the business over time. So, it’s not a donation. You’re getting a lot more back than what you put in and you get to use it towards the business in the months that follow, in the years that follow. So, it generates this really interesting economic engine around these important and critical independent businesses all around us.

Eve: [00:05:23] Interesting. So, I’m having a thought. Could Small Change run a campaign on NuMarkets and offer people some investment coupon for future use?

Ross: [00:05:37] You know, I know we’re recording and if there are any regulators listening, we have to check that out first.

Eve: [00:05:43] No, this is, well, what’s interesting and this was going to be my next question. So NuMarkets doesn’t fall under any securities law, does it?

Ross: [00:05:52] Right. So, we’re issuing promotional credits. That’s kind of what our model entails. You are not receiving back cash. It is not a security. It is in the promotional credit category where you’re getting that 20% back as essentially a voucher to use towards goods and services, not that different from a gift card. And we’re very clear about that with everyone involved in knowing that there are some risks involved. But you’re getting this great chance to support a business. And unlike some donation-based platforms, where your money is going towards incredible causes, this is going towards businesses, for profit businesses like restaurants, yoga studios, online platforms, things like that.

Eve: [00:06:44] Right. I don’t think it would break any securities law, but we’ll talk about that later.

Ross: [00:06:50] I didn’t realize this was going to be a whiteboarding session.

Eve: [00:06:53] No, I mean, it really just occurred to me. My favorite Korean restaurant right next door, if they came to you and they did a campaign and I, what do you call it, make a donation. It’s not really a donation. Yeah, a contribution. It’s a contribution. So, it’s some way between investment and donation. So, make a contribution. Then thereafter, I could buy their bibimbap for 20% less.

Ross: [00:07:19] Exactly. Yeah. And you could buy their bibimbap, you could buy drinks, you could get anything that’s in there. Goods and services that they’re offering, which is one of the things we found has been a really big value add, where contributors get to use it, how they’d like to. And for businesses, they get to do exactly what they do best, which is just run their business. You don’t need to change your offering. You don’t need to offer any special packages or anything like that.

Eve: [00:07:47] So what do these businesses I mean, what do these businesses generally raise money for?

Ross: [00:07:54] Yeah. It’s we find a really big mix of things, new locations, new product lines, being able to move from, let’s say, a brick-and-mortar model to a nationwide or worldwide delivery service or the opposite. We find a lot of delivery, whether it be home delivery locally or nationally, moving into more of a permanent space. A lot of pop ups that are turning into brick and mortars. So, we’re at this point where some really amazing, vibrant and oftentimes funky businesses get to fund their dreams and get that validation that those dreams are real from their funders who turn into their best customers.

Eve: [00:08:45] That’s pretty cool. So, walk me through how a campaign works.

Ross: [00:08:50] Yeah. Campaigns, they last for 30 days, and you get a unique URL and campaign page designed with content that shows sort of who you are as the business owners, what your business is, and really gets to the soul of why you’re doing what you do. And anyone with access to a credit card can contribute during that 30-day period. You can gift contributions if you’d like to, to others, which we find a lot. You can leave testimonials that really show how much a lot of these great independent businesses are loved. So, it’s really special there. And then after the campaigns end, what we do is we handle all of the credit distribution, and we start doing that one month after the campaign ends. And that one difference for us of how our credits work is that we break them up monthly. So, we’ll start sending you your credits just one month after the campaign ends super quickly. And we do that monthly for six months. The way that math works out is, let’s say you contribute $100 to Eve’s Cafe. You would get back a total of $120 in credits, and you’d get $20 worth of credits every month.

Eve: [00:10:09] Okay. And this is to make sure that the funds are raised to spread out for the business as well.

Ross: [00:10:19] Exactly, yeah. And what we found happens quite often is you’ll have $20 worth of credits in month one and you’ll go in and you’ll spend those 20 credits and spend above them. So, there’s this really great engine around supporting independent businesses in a really, really strong way, not just as funders, but as your most loyal customers.

Eve: [00:10:43] How did you come up with that formula?

Ross: [00:10:46] Just trying to understand, I think, and talking with a lot of business owners and understanding the problems that are that are facing them and just taking a human first approach of, you know, just talk to us. Tell us what’s going on. Tell us why when you look for institutional funding, it’s difficult. Tell us why when you might find that funding, it’s difficult for you. And then, and then iterating. You know, our model wasn’t always exactly like this. We have great feedback loop and we’re super close with our customers and have a willingness to make those changes when we see that they’re needed.

Eve: [00:11:28] Interesting. Okay. So, I have to ask then, what percentage of your customers are not white male?

Ross: [00:11:38] Yeah, we don’t sort of publish exact data, but it’s a vast, vast majority.

Eve: [00:11:45] So often they fit into that minority or woman-owned business category that we all know does very poorly in the fundraising world.

Ross: [00:11:56] Yes. Yeah. The statistics on that are shocking.

Eve: [00:12:01] They’re really shocking. I think something like 2% for women owned businesses it’s ridiculous.

Ross: [00:12:07] Yeah, we’re very excited about the opportunity that we have in front of us to try to change that. And we’re at this point way above a majority of the businesses being led and managed by women and people of color.

Eve: [00:12:23] So what’s their average amount raised for businesses that you’ve helped so far? And how many have listed campaigns with you?

Ross: [00:12:31] Yeah, we’re up over 30 right now in the past year and at a pretty solid growth rate, which is exciting but also daunting, as you know. Yeah. And the average contribution amount, which I think is one piece of of data that is that’s pretty important for us, is around $150 per person. So, and that’s kind of the spot that we like to be in, which is no matter if you’re putting in $10 or 10,000, what you’re getting back is going to be the same. You’re getting that 20% back. And so we’ve found all different types of people from all different income levels who are able to participate and get that 20%.

Eve: [00:13:19] It must also depend on the business what value $150 has. Like it’s going to be different for bake shop than for something that sells more expensive goods, right?

Ross: [00:13:31] Yeah. Yeah, we found some really interesting, I think at this point slightly anecdotal, data on that of how do contributions change based on your average cost of goods. What’s been really interesting for us is the success of recurring purchase models. So, things like subscriptions, we’ve had some everything from farm delivery boxes to dumpling delivery and those have done incredibly well. I think there’s something to the idea that you know, as a customer that you’re going to be either going in or getting delivered something every week, every month. So, it makes a lot of sense to support and get 20% more.

Eve: [00:14:19] Interesting. Okay, let’s talk about geography. Where where do you do this right now?

Ross: [00:14:23] Yeah, we just kind of moved into Nationwide in the US. So, we started off in Boston in New England with a really, really great community of customers. And we, just this month, started launching campaigns that are across the country. What’s been really interesting, given what’s going on in the world right now, is that where you’re based has taken on an entirely new meaning on both sides of the platform. So, for contributors, people are living all over the place. Maybe you’re spending three months out of the year in New York, three months out of the year in Albuquerque, three months out of the year and in Indonesia. And for businesses, it’s a little bit of the same. You might be based in Los Angeles, but most of your customers are in Miami or in Topeka or wherever it may be.

Eve: [00:15:14] Interesting. So, do you find people contributing who are not customers or might be new customers for these businesses? I suppose the question is, is there crossover between campaigns? Are you building your own contributor base? Yeah.

Ross: [00:15:31] There is, yes. And we’re still early on. And I think that number will, we hope, grow. But we have found a really strong amount of repeat contributors, whether that’s our doing or the fact that there are just some really great businesses in similar communities, it doesn’t really matter to us. We’re just excited that people want to see this model grow and they want to see great independent businesses grow. We’re just there as the tool to make that happen.

Eve: [00:16:03] You said you’ve gone national. Where have you had campaigns?

Ross: [00:16:08] We’ve had some in California. We’ve had some in Florida. We’ve had a lot in New England, Connecticut, Boston, up in Maine, expansion into Maine, I should say. And in the next few weeks, we’re going to have a little bit more dotting across the country.

Eve: [00:16:26] Okay. None in Pittsburgh yet, right?

Ross: [00:16:29] Not until you help us out Eve. That’s what we need.

Eve: [00:16:31] I’m going to help you out, I’m going to help you out!

Ross: [00:16:33] You’ve got to spread the word.

Eve: [00:16:35] I think it’s a really great idea. So, do you think this model might become mainstream?

Ross: [00:16:40] We’re pretty confident that it will if we do our job well. I think that’s kind of the feeling that we all have right now, which is if we can continue to spread the word about it and make it known to more independent business owners that this is an option and that there is great support and there’s a way to engage your community of customers, we do think it can go mainstream. I guess it depends on your definition of mainstream. We’re not focused on world domination as a tech platform. I think we’re focused on being an option for every independent business that wants that option. Yeah.

Eve: [00:17:20] What’s your revenue stream? How do you get paid?

Ross: [00:17:23] Yeah, it’s pretty simple. We take a percentage of the funds that are raised in the campaigns. We have no subscription fees, no upfront fees. So, the only time businesses see us in their accounts is when we send them their funds at the end of the campaign.

Eve: [00:17:40] Shifting gears a little, you know, I looked at your background, which is very interesting, and community and social impact are clearly a really big theme in your life. There must have been a story. There’s got to be a journey that led you to NuMarkets, and I’d love to hear it.

Ross: [00:17:57] Yeah. Eve, if you recall to how we met, one of the big themes of that accelerator was Origin story. And unfortunately, there’s no great origin story. It’s, I guess, the seeds of how NuMarket came about in my background, were doing work and research that took me to some places all over the world and getting to see how different financial models work, how different businesses engaged in commerce and getting a lot of exposure to just difference.

Eve: [00:18:38] But to be fair, you’ve got a masters in entrepreneurship and social impact. So, you you’ve had a path towards this, right?

Ross: [00:18:46] Sure. Yeah, absolutely. And I think what that sort of academic piece of my life did was to really frame around the idea of understanding the problem from a very human lens. So instead of taking an idea and overlaying it onto people, it’s let yourself understand the challenges and day to day problems that are facing real communities and try to design ideas and business models and products against that. I can remember being in very specific instances and looking at the way that people have funded independent businesses all over the world, the ways that they’ve been able to create financial inclusion and just being so interested and impressed and engaged by those experiences that in some odd way Eve, leads to you running down the stairs one day and saying, Oh, I think I think now it makes sense. I think now NuMarket is ready. I think we’ve got the model.

Eve: [00:19:56] Right, I get it. But there’s another company that you’re involved in that intrigues me and I’ve just got to hear about, and that’s called Jungle. Tell me about that.

Ross: [00:20:05] Yeah, so Jungle started off sort of consulting and working with other corporates on how to increase their community impact through their revenue models. And in a strange twist and turn of events, it ended up being a coffee company that I started a few years ago, a handful of years ago now, with the idea that coffee is the most ubiquitous and habitual product that probably exists in the world where I’m holding one right now, we all…

Eve: [00:20:40] Here’s mine.

Ross: [00:20:40] I shouldn’t say we all. There’s yours. Exactly. It’s something that many people across the world really understand and purchase, and it affects over 25 million people across the supply chain. So, ended up starting a cold brew coffee company in in London a handful of years ago and a very different, of course, business model to what NuMarket is. But I think a lot of the partners and customers that we had are the same people and same type of people that we’re supporting at NuMarket now, owners of coffee shops, owners of bakeries, restaurants. We just launched a campaign for a coffee producer in Lawrence, Massachusetts, and it’s pretty cool to see, see some of the same challenges that we were facing in the coffee world and be able to support people doing it themselves now through NuMarket.

Eve: [00:21:38] Very cool. You’ve developed a thesis which is really fascinating. What do you think needs to be fixed in the world of small business? I know that’s a really big question, but I’m asking it anyway.

Ross: [00:21:50] Yeah, well, you know, there is, there’s no doubt that there’s power in commerce and who holds the purse strings. And I think the thing that we’re focused on from a systemic change perspective is allowing everyday customers to be the arbiters of the success of these businesses. So, if you’re the ultimate end user, you’re the person who’s buying the product. If we allow those same people to decide who gets the funding to start and grow, I think we’ll see a big, big change towards businesses that are important, that are independent, that are really, really doing great things for their communities, as opposed to businesses that have one very clear single bottom line, which is how fast can we grow? How quickly can we increase our margins as opposed to can we make people’s lives better and also make money at the same time?

Eve: [00:22:46] So if you were going to leave your mark on the world, what would that look like? How would you like to leave your mark on the world?

Ross: [00:22:54] Eve, that is such a big question.

Eve: [00:22:57] It is! But you’re pretty close, I think, you know.

Ross: [00:23:01] Yeah, not even.

Eve: [00:23:03] Okay, I didn’t ask. What would your gravestone say?

Ross: [00:23:09] Oh, that’s a good one, too. Well. You know, I think it would just be. You know Eve, I don’t know and I’m going to be honest, I think we’re supposed to answer these questions with authority and strong character and all of that in these types of settings. But I think it’s okay to not know and to still be figuring that out. And right now, I think what I want my mark to be today, it’s just to have done worthwhile work.

Eve: [00:23:46] I’m pretty much in the same place. She led a good life. She was a decent person. That’d be pretty good. Yeah.

Ross: [00:23:53] And had a few good cups of coffee. Right, right. And a few bad ones too.

Eve: [00:23:58] Okay. So, I have to ask, ‘cause you sound pretty prolific there, what’s next for you? Like, are you focused solely on growing this business or is there something else you’re cooking up?

Ross: [00:24:10] I think I’m very laser focused on growing NuMarket in a way that is positive on a lot of levels. But I think there are lots of challenges and opportunities to solve those challenges out there. And I hope that whether it’s through NuMarket or through other efforts, that I and our team can start to tackle those and find some great momentum towards this idea of mutual value models. How can everyone involved in the equation of commerce or economies put something in and get more out from doing so? So, we’ll see where that takes us and we’ll see whether that’s tomorrow or ten years from now or ten weeks from now.

Eve: [00:25:01] Well, it’s fascinating. And I have one final question, if I find a business for you in Pittsburgh, will you come?

Ross: [00:25:08] Absolutely. I’ll come tomorrow. Let’s have some Korean food. Let’s have some good coffee.

Eve: [00:25:14] It’s a deal.

Ross: [00:25:16] We should hang up and stop recording now so we can start, we can start creating spots

Eve: [00:25:20] Okay. Thanks very much for joining me.

Ross: [00:25:24] Thank you, Eve. It was a pleasure.

Eve: [00:25:35] Ross Chanowski is passionate about building businesses that are needed and that make a difference. It looks like NuMarket is well on its way to making a mark.

Eve: [00:25:56] You can find out more about this episode or others you might have missed on the show notes page at our website RethinkRealEstateForGood.co. There’s lots to listen to there. A special thanks to David Allardice for his excellent editing of this podcast and original music, and thanks to you for spending your time with me today. We’ll talk again soon, but for now, this is Eve Picker signing off to go make some change.

Image courtesy of Ross Chanowski

Skylight studios.

April 13, 2022

Stephanie Blake is the CEO of Skylight Studios and an historian at heart. That’s what she studied at Yale, much to her parents’ dismay. They didn’t understand how she could leverage history into a career. But she has. In a big way. Skylight Studios has built a business on taking short-term leases on large, derelict buildings to transform them into venues, often for fashion shows, art shows and corporate brand events.

They revel in enormously gorgeous and gritty vacant buildings. The sort of buildings that most people can’t reimagine to have any useful life today. 19th century post offices, millions of square feet of vacant commercial space and empty industrial buildings that all have a story to tell. Skylight Studios finds good use for those spaces, turning them into a branding campaign for their next act. What began as a small business creating temporary popups in unused spaces, has become a big one – with a non-traditional portfolio of venues, where temporary can mean a decade. For Stephanie there is always a story that will pave the way from old to new. She calls it “intentional short-term real estate opportunities … reimagining the industry in the way coworking companies changed the way we use office space.”

The company was founded by Jennifer Blumin, in 2008 (during the recession, by the way). But when she unexpectedly died in 2017, Stephanie was then the company’s president, and she had to step up in a big way under difficult circumstances.

Today, Skylight has assembled a set of remarkable venue spaces in New York City, San Francisco, Los Angeles, and coming soon, in Chicago and Ontario. From Art Deco to Modern Warehouse to Powerplant Industrial. Today, Skylight works directly with major development firms like Vornado Realty Trust, Brookfield, L&L Holding and Atlas Capital Group, taking their unused or underused real estate and offering it to brands and studios for immersive experiences. It’s not just high-profile events, but also smaller economic development projects such the “Love, Bleecker” project, a retail activation project that Skylight did with Brookfield Properties, which drew shoppers via curated stores and events. Stephanie has also talked about the possibility of adaptive reuse in office space, something that has barely been touched. A fascinating way to approach marketing, Skylight projects not only benefit real estate owners who have vacant buildings, but it can draw attention to neglected architecture, neighborhoods, and local businesses.

Read the podcast transcript here

Eve Picker: [00:00:05] Hi there. Thanks for joining me on Rethink Real Estate. For Good. I’m Eve Picker and I’m on a mission to make real estate work for everyone. I love real estate. Real estate makes places good or bad, rich or poor, beautiful or not. In this show, I’m interviewing the disruptors, those creative thinkers and doers that are shrugging off the status quo, in order to build better for everyone. If you haven’t already, check out all of my podcasts at our website RethinkRealEstateForGood.co, or you can find them at your favorite podcast station. You’ll find lots worth listening to, I’m sure.

Eve: [00:00:59] Stephanie Blake is an historian at heart. That’s what she studied at Yale, much to her parents’ dismay. They didn’t understand how she could leverage history into a career, but she has in a big way. Stephanie leads a company that revels in enormously gorgeous and gritty, vacant buildings, the sort of buildings that most people can’t re-imagine to have any useful life today. 19th century post offices, millions of square feet of vacant commercial space and empty industrial buildings that all have a story to tell. Skylight Studios finds good use for those spaces, turning them into a branding campaign for their next act. What began as a small business creating temporary pop ups in unused spaces has become a very big one, with a non-traditional portfolio of venues where temporary can mean a decade. For Stephanie, there is always a story that will pave the way from old to new. You’ll want to hear more. If you’d like to join me in my quest to rethink real estate, there are two simple things you can do, share this podcast and go to rethinkrealestateforgood.co where you can subscribe to be the first to hear about my podcast, blog posts and other goodies.

Eve: [00:02:34] Hi, Stephanie. Thanks so much for joining me today.

Stephanie Blake: [00:02:37] Thanks so much for having me.

Eve: [00:02:39] So, you run a really fascinating and innovative company known for creating intentional short term real estate opportunities. Do you want to tell us what Skylight Studios is all about?

Stephanie: [00:02:53] Yeah, you know, Skylight Studios, we consider ourselves to be a creative place making and non-traditional venue development and management firm. And I think the two businesses are really linked because about a decade ago we started, really longer now, during the 2008 recession to sort of identify creative use for underutilized buildings. And I think by bringing in really interesting events and experiences with some of the most creative brands at the time, organically, we created a sense of place and identity for these buildings that jump started development investment. And we’ve seen that only continue in terms of the way the built environment just can’t keep up with how human behavior and the sort of cycles of.

Eve: [00:03:45] And viruses, right?

Stephanie: [00:03:47] Viruses, yeah. Exactly. Yes.

Eve: [00:03:52] How does it work? How does the business work?

Stephanie: [00:03:55] We were founded in New York City specifically because in sort of an urban environment. And back in 2008, there were so many incredible buildings that were sort of either historic or purpose built that didn’t have a use in sort of at that time, and so we really focused on adaptive reuse and looking at buildings and seeing why are they vacant, how are they so underutilized, and how do we partner with the owners of those buildings to both generate revenue but also create activity that enhances the community and provides a canvas for potential future tenants. So, I think that’s really mainly it’s a function of partnerships with the owners of buildings, often historic and underutilized buildings and Skylight having a vision around what makes the bones of a creative canvas. And then, throughout the year, as we’ve seen starting back in 2008, with fashion being sort of at its height in New York, seeing some of the creatives like a Ralph Lauren or a Chanel or any of these guys who are setting the tone for interesting experiences, who also appreciated history and architecture and something that others might see as just a dilapidated warehouse and celebrating that and putting investment against these ephemeral experiences, and from that they would set the tone and media and tech would follow and they would want to also create experiences. So, from that, we feel like we’ve created the sort of luxury shared economy where for a building that is interesting and an interesting canvas, you can achieve market rent or greater by putting together the best of industries in an environment that isn’t set up for necessarily even having all the power and the restrooms and the things you would imagine you need in a traditional venue.

Eve: [00:05:53] So how big are the buildings or the spaces that you tackle? Is there any typical?

Stephanie: [00:05:58] Yeah. You know, I think for us we do look at larger spaces, but I think it’s not a typical venue because we’ll do it in part. The High Line was an amazing project for us working on still today with four Freedom Park, the Louis Kahn Design Park on Roosevelt Island. It’s really about, we often talk about the third place. So, yes, it usually is 10,000 square feet or greater just because the types of events and the creativity and the experience of a space for us, be it for filming content or events, does require a bit of scale. We are looking for high ceiling heights, which is the interesting part about when we say adaptive reuse. These purpose-built buildings, whether it’s power plants or warehouses or post offices or printing presses, they’re meant for production, and the ceiling height and the materials used allow for both a sense of strength and of soulfulness, but also just purely from production, if you’re doing something in a temporary way, you want to create an incredible experience and it helps to have scale to do that.

Eve: [00:07:12] Let me back up a bit. So, these are short term events and do you pick spaces and find partners to activate them with or do you find spaces and talk to the landlords about the potential or do people with vacant buildings come to you or all of the above?

Stephanie: [00:07:30] Yeah, that’s all of the above for us. While our events are short term, our engagement is not short term, even if it might be an interim use. Often it might be five years, seven years with a lot of these projects that are stalled and looking to be jumpstarted through creative activation and revenue and to gain interest. So, Moynihan Station is a great example of that. Thinking about the middle of New York City and Midtown, the post office that was the sister building to the original Penn Station was vacant for 30 years and counting. A significant portion, probably 10% of it was still an active post office. There were leaks in the ceiling, there were cobwebs and pigeons all over the building and it’s 2 million square feet that’s just vacant.

Eve: [00:08:19] Wow.

Stephanie: [00:08:20] And you needed $10 million to even begin to make it into something that a standard tenant would take on. The carrying costs were significant and we walked in and we lit up and it was the skylights and the nature of the sort of black resin floor where 80% of the mail would come across from Europe and it was black so that you could see the mail that would fall on the floor and you had these catwalks before there were security systems where people would sit up in these catwalks and this 60 foot ceiling and look and watch people sorting the mail to make sure that no one was stealing anything and it was being done the way that is expected. And to have that and recognize the creatives we work with, we move New York Fashion Week from Lincoln Center there because the designers that want to create these experiences that feel otherworldly, they really appreciate the history and also the nature of what that building was. Buildings aren’t built that way anymore. And so, for us, you know, we came in, we created a short term event venue, but it was over the course of five years and counting. And to this day, they credit Skylight moving New York Fashion Week, bringing through the Anna Wintours, doing things with, you know, Hermes and the Whitney Museum and Edible Schoolyard and all of these things just to bring an audience and exposure. And also, you know, we generated over $17 million and so for Vornado and related to them come in and see the investment and for them to restore the skylights in a way that originally, they thought they were going to just rebuild. It was just a very interesting arc to then also, as Vornado’s doing this $3 billion redevelopment Skylight has come back in, Vornado tapped us to think about how can we continue now that they actually have redeveloped and are launching? We have two venues that will be operating and we’re also the partner to think about interesting programming to help keep that redevelopment vibrant and the future of work and sort of what that can be to Midtown requires more than just the materials and an incredible architect to design spaces. You need that heartbeat of what actually keeps these spaces active and interesting and engaging.

Eve: [00:10:40] It sounds like your role is unexpectedly become historic renovation advocate as well.

Stephanie: [00:10:48] Yeah, I like that term. We often consider what we do to be urban archaeology because I think we’re sort of seeing these buildings, understanding how they were built, how incredible the bones are and the stories of why and how they were built and what they meant to the city and bringing them back into today’s context and through.

Eve: [00:11:12] Fascinating.

Stephanie: [00:11:13] Yeah, I think we have a real a deep appreciation for history.

Eve: [00:11:17] It sounds like it’s so just run through for me. What type of vacant spaces do you tackle? Like, how big is the range?

Stephanie: [00:11:24] Yeah. It ranges from, you know, 10,000 square feet to millions of square feet, I think, at this point we have a 32 acre district that we work with in downtown L.A. Obviously, the post office Moynihan was 2 million square feet and counting. Thinking about some of the parks that were brought into, I think that, you know, we’re working with Ford on the revitalization of Michigan, Central and Detroit. I think that a lot of these projects I think what I was starting to say earlier around the third place, you know, especially coming out of COVID, we’re very aware of the first place being your home, the second place being where you go to work and these third places are not defined for us as a culture, as a society. And I think they can be parks; they could be libraries maybe once upon a time they were the mall. And I think it fuses sort of entertainment with community and art and culture and music and the different things that bring us together. And I think more than ever, a lot of developers, landlords, cities are focused on how do you make sense of this third place? What does that mean for vacant retail, for the future of malls, for even the way people are questioning office and how and why and when we come together? And so, I think a lot of what Skylight looks at and the reason I think our spaces have gotten bigger and even more interesting is because it is what is the third place when you have a district, how do you think about the negative space, the walkways, the common areas, the outdoor environment that might be the quad between your retail. So, I think we like to think of what we do as not just being confined to a specific building or 10,000 square feet, but truly how do we think about the sort of master operations of a district or a neighborhood? And how do we connect the public space to the private space, to the retailers, to the SMB in a way that can be fused through intentional programming and experiences?

Eve: [00:13:28] So you really are urban design strategists. That’s really what it sounds like. How do you interconnect everything in the environment?

Eve: [00:13:35] I think we work with a lot of experts in different fields and whether they are urban planners or economists or the bid or the Economic Development Corporation or architects. And I think a lot of these experts help inform our activation strategy where we see so much value and bringing expertise to the table. But ultimately, I think what we’ve organically evolved into is to your point, that of these urban planning sort of activators, if you will, because I think that as we’ve seen between technology, these viruses, all the things in which has just sort of sped up the world and how we interact and our expectation of space and environment, the built world just can’t keep up. And so a lot of the experts and a lot of the things that are static and built can’t keep up. And so I do think our role is to think about how everything from in real estate, where everything has been about these traditional asset classes and these types of uses. And then when you think about on the flip side, the idea of urban planning and it’s meant to be built in a sustainable way and last for decades, but our behavior is changing quickly. So, I think it’s Skylights role to interpret and take in information and allow for a program that helps adapt and change and that that really is events and experiences in a way that maybe even five years or ten years ago, events were seen as a very superficial thing. But now I think it’s truly a fundamental part of our society and the development of the built environment.

Eve: [00:15:19] So the big question I have is, is does the ultimate post-event goal differ for your clients or you? I mean, do you have different end goals in mind?

Stephanie: [00:15:30] I think we do. But I think ultimately there is this concept of all ships rise with the rising tide and the idea of even there is a disconnect between a landlord’s goals and the retailer who or the tenant who’s filling their space but if you’re choosing to be in a space because of the neighborhood, because of the architecture, because of the design, because of the demographic that’s there, it works. And I think we’ve seen more and more a lot of brands and activations be a way that creates community. The goal for product driven brands is to create loyalty from their customers and I think honestly, a big part of Skylight has been finding that common ground between the city officials, planning, the police department, the fire department, the landlord and the brands. And I think there’s common ground to be found because when you create a great experience, it helps everyone. And I think there’s a pressure on brands more than ever to have a mission to do good in the world, and I think that falls very nicely in line with generating community and thinking about a neighborhood and that the experience is not just slapping up your logo and showing your new shoes, it’s the story. And that’s the stuff that resonates with people and humanity generally. And I think the storytelling through events is something that you can find the right thread and it can be very powerful to identify that common ground in terms of how are you playing a role in revitalizing this neighborhood and establishing community, and where does your brand story fit into that?

Eve: [00:17:07] So do you think your model can help to rescue the central business district, which is facing an existential crisis right now? Like we’re thinking about entire places, not just buildings, right, that are looking pretty vacant and have to really think about how to reinvent themselves.

Stephanie: [00:17:26] Yes, I do think it’s a big challenge and I think it’s very dependent on the buildings and the way a central business district might be set up for us we’ve had interesting experiences in Chicago with the Board of Trade Building, having these trading floors that are 30, 40 foot ceilings, 30,000 square feet, and when you have that, we could do interesting things, not just trying to repurpose ten foot ceiling height.

Eve: [00:17:57] Right.

Stephanie: [00:17:58] Old eighties offices. I think there’s different ways to think about Skylight being a catalyst for what is the future of some of this vacant office space and how do you still draw people to it? And if there isn’t the triple net ten-year lease, how do you think about why companies are bringing people together and can you create spaces that can be shared and still draw people to that space, which then allows for the other businesses that exist, be it the cobbler or the Sweet Greens or whoever needs to be patronized by the office workers. So, I think there’s some ways we’ve thought about that and depending on the physical bones of the buildings in that area, I think we can play a role in that. I think it’s different than the plight of retail and malls, but I think there’s some similarities there where I think just the expectation in the use of physical space is changing. And I think there’s been an understanding for a very long time that it is traditional, it’s one use, it’s a restaurant, it’s an office space, it’s a brick-and-mortar store that just sells what’s coming out of its inventory there. And I think the world is changing and I think entertainment experience work, all of that in combination with content creation and the digital footprint against the physical is an important formula for central business districts, because I think there’s an inherent challenge. I don’t think they can stay static and just be revitalized with the existing mix of types of businesses, particularly for some of the less interesting central business district where they don’t have a historic, beautiful building or they don’t have the bones, they’re very sort of built for what was meant to be there, which is you have your cubicles, you have your office, you have the smaller retail down below, and I think with that, it’s taking a more holistic view. I think that’s also a big thing we’ve seen that can be a factor is how do the landlords come together? Like what’s the role of the bid? Or does a landlord come in and swoop up a significant portion of real estate so that they have a more cohesive approach to the tenant thing, to the community, to what’s happening there? I think we’ve seen that be a pretty big factor in where even where Skylight can make a difference or not.

Eve: [00:20:24] You were involved in the remaking of Bleecker Street, which sounds really interesting because I think there were financial aspects for how that street came back that also play a really big role. So that that was five blocks, right, a five block street that was in pretty bad shape. What happened there to bring it back?

Stephanie: [00:20:45] Yeah, I think that’s a great jumping off point because it was Brookfield coming in and purchasing a number of those storefronts and providing that sort of overarching opportunity to not just have one storefront but multiple across these few blocks. And I think Bleecker Street was always, in terms of the corridor and the West Village and having this sort of sense of being a charming place where you have discovery and surprise and delight, as it became more successful, and landlords saw they could increase rents and they could take the stores that could pay top dollar and Fifth Avenue and put them there. You know, the community and the neighborhood, it was disconnected with its identity.

Eve: [00:21:32] No more surprise and delight, right?

Stephanie: [00:21:35] No more surprise and delight, exactly. And so, I think as vacancy increased and it was recognized that these stores, even the big box, the one the ones that were very well resourced, it didn’t make sense for them to stay open. It made more sense for them to even hang on to their lease, but not to staff it, which is a crazy challenge. And so I think Brookfield really saw an opportunity as place makers and part of that sort of ethos to shift that and take a chance, and so I think by taking five storefronts and working with a firm like us, it was very much to think about not just filling the stores, but also how do we create sort of a sense of community and programming on that street to bring back the legacy of what Bleecker was to the beatnik poets, to the days of Kerouac, to the music, to all of those pieces. And think about also what is the future of retail and how do you take some of these digitally native brands and give them an opportunity? For Skylight I think we were very thoughtful around even thinking about mentorship. So, the stores that had survived and that were there, why did they survive and how can you create a community and a platform between these digitally native brands and those that had been there that were really based in brick and mortar and have connectivity? And it was successful in that, it became self-sustaining. So, once we connected these different brands with one another, and I think that’s where the special sort of connection happened, was just not only to be thoughtful about who you were trying to place there, but also how did they jive with the existing stores there? And how do you create a program for programming and experiences and activation that allow these brands and companies to get a jump start in terms of seeing how programming on the street and doing things together can actually drive traffic and sales. And then once Skylight, once we set that program, they got it and they were able to continue that level of programming to today, and I think that’s been a huge success for them.

Eve: [00:23:49] It sounds like a really interesting model that might be used in other places. You know, as we see a lot of vacancies in in retail strip districts, main streets.

Stephanie: [00:23:59] Yeah, I think it’s definitely the West Village is a really you know, we had a lot to work with. I think when you think about some of the other districts, I do think community and a platform that really creates a shared sense of responsibility and also a shared customer or shared approach because I think that there does need to be some structure, even though everything can and will and should be hyper localized, I do think there’s a formula around how to give tools and resources to these sort of retail districts and help them move into a space where they can meet the consumers the way that the landscape is changing.

Eve: [00:24:42] So what about big tech? Have you worked with Big Tech at all and what are they trying to accomplish?

Stephanie: [00:24:51] Yeah. I think, you know, we have worked with all of the big tech. And I think it’s really interesting to see their emphasis on short term experiences and being able to sort of experiment and build on proof of concept. I think similarly to how we were just speaking about the built environment not keeping up, I think Big Tech is aware of a lot of what they’re doing digitally, and in the cloud, but I think ultimately they recognize that we’re human beings with bodies and need to also come together around what big tech is doing. And I think whether it’s Netflix, right, they are content platform, at the same time, I think the number of experiences that they’ve launched in person shows the value that they see in creating loyalty and experiences around their shows and connecting fans with one another through physical experiences. I think similarly in the work we’ve done with Meta and with Google and Amazon, events foster these moments that are memorable, that I think as humans, nothing can be replaced with what you experience online, with what you might experience in person, and so I think creating a level of engagement and identity, I think Big Tech is really aware of the importance of events and experiences and the in-person value against the platforms that they’ve created in the digital space.

Eve: [00:26:34] Is there any backlash to brand bankrolled community space and how do you engage a community that’s already there?

Stephanie: [00:26:44] Yeah, I think that’s a great question. I think that ultimately, as I’ve seen, you know, even sitting in my small city that I live in now, I sit on the advisory committee to city council on setting the general plan for the next 20 years, and cities and politics is very, very slow and hard to get things done. I think the beauty of some of these bigger brands with the right intention is that they can be these 21st century patrons of community, of the arts, of these spaces. I think there’s a lot of ways that Skylight has structured things to allow for the sort of VIP, the product launch, but then also community programming and educational programs that come from that. And I think there can be the same level of investment that gets amortized over the course of a couple of weeks, where initially there is this big experience that is for their top clientele or for the creators that are part of their network and all of that. And then to think about that same build and that same experience and how to translate it. I think there’s also a lot of ways that we look at a full calendar year or five years of a project where these brands come in and they are the ones paying and subsidizing for the community driven programs. So, if you’re thinking of a lot of our model at Skylight, is this sort of lower frequency, high caliber where you have maybe 25, 30% of the calendar year filled with the stuff that provides that revenue stream and also provides the investment to then work with the community. And I do think that there is this focus on an overused authenticity or honesty around what you’re doing as a brand and as a developer and there’s so much more of a spotlight, even from the community, to have a voice and what that looks like. And so, I do think generally, yes, gentrification is not going to go at any time, you’re redeveloping, you’re doing something. But I do think there’s a way to be really thoughtful around the brands, what they’re doing, how those dollars get reinvested and creating a place for the community and continuing to work with the existing organizations that have been a part of that community, the artists, the various non-profits that have played a role in whether it’s education, the schools, all of that to integrate in a calendar that does feel like it’s addressing all of the different parts of a community.

Eve: [00:29:18] Little authenticity. So, what’s your story? I mean, how did you get from Yale to here?

Stephanie: [00:29:27] Um, you know, I was a history major, and I think I’ve always had an appreciation. What?

Eve: [00:29:34] Yeah, I said, well, that fits the history, Major.

Stephanie: [00:29:40] It does it. And it’s so interesting because I could have never predicted from being a history major at a liberal arts school that this would become sort of my my path. But I did, and my parents actually, they are they grew up in Jamaica. They’re immigrants who sort of really self-made but felt really strongly that history was not a super useful degree. And when I was graduating and I was offered a job at Google, that was a great opportunity, even though I didn’t understand, I mean, Google explained that they don’t hire people that necessarily have a tech background or know what to do in this sort of framework but they just want smart people who can think, but I think my parents were very surprised and excited that that was a transition from history major. And I think being at Google, it was an incredible environment to learn a lot and to understand the tools that are being used and the sort of digital space and sort of the software and the. For me, it felt so intangible. But to understand how this platform was created around something that I couldn’t touch, see, feel or really understand, and I think I struggled with that, even though I was really grateful and excited to be part of something at a time. You know, this is 2005 where it was changing rapidly, and it did feel like it was truly the pioneering thing that was changing the world and being around other people who were so smart and innovative. But I think I always knew that being in a physical space design, how the built environment really affects your mood, it affects how you connect with people. It’s just end of the day, I just I feel so much that we’re physical beings and the built environment is a really important piece of how we see the world and how we connect with one another and so, it was just an interesting opportunity that a good friend of mine who was at Google said, Hey, I met this woman who’s doing this interesting thing in this warehouse and we were going to do something there for YouTube. At the time, a YouTube had just become a part of Google, and I met with them, and one thing led to another and I helped think about how space and the creative nature of a lot of these companies building things in the cloud and how that revenue stream can really help with the revitalization. And I think that at the time it really wasn’t more than thinking about vacant space and creative experiences and having a revenue stream that could help float these spaces in the interim pay for offset the cost of just the carrying costs. And I think it really evolved into understanding the power of these types of experiences, the way that these big companies thought differently about short- and long-term investment in space and the value of that against saturation of the digital space.

Eve: [00:32:37] That’s interesting.

Stephanie: [00:32:38] And I think today it’s interesting to see it in the way that I can see real estate, almost as in my head. It’s very bizarre, but I do see it almost as like the search function of you have your ads on Google and they enable the search platform. I think there’s a lot of controversy of how much can you tell between ads and the actual search results these days but, I do think there’s a lot of value in thinking about, to your question earlier, how these big companies and brands can affect the quality of the built environment and how they can help fund that shift, and I don’t think that the traditional model of just the landlord tenant relationship across all of these spaces where they are purpose built for one tenant and one use is the future. And so I think it’s interesting to apply some of the ways that I think being at Google in those sort of early days of my career and seeing how they were thinking so differently about this sort of space in the cloud could be applied to the built environment.

Eve: [00:33:42] So I’d love to know what services you don’t provide yet that you’re thinking about or how you’d like to grow this company. Because it seems like you must be getting bigger pretty quickly. What are you thinking about? Where else can this go?

Stephanie: [00:33:57] Yeah, I think the primary use of our portfolio these days is twofold. It’s really offering location based, interesting environments for film and content, and that’s often sort of the easiest way to go into. We have this 800-acre active steel manufacturing plant off of Lake Ontario or the power plant sitting on the Pacific Ocean in Redondo Beach. And that’s something that I feel with the amount of dollars and the craze around the white-hot market that is studio, there’s still a significant amount of content and film that’s done outside of the studio. And so, I think identifying these really amazing assets for as film and content locations is something that I think could grow very quickly for us, especially because you can repurpose the workforce. The workforce that was part of the steel manufacturing plant can be the workforce to make this a content environment. And so, I think that’s been really interesting and I think offers up a lot of different environments across the world for Skylight to go into. And I think additionally thinking about this place and Skylight being the operator of the third place, I think there are so many amazing historic buildings and spaces, museums included, who are starting to struggle to come into their identity as the world is changing and technology is changing, and all the immersive experiences are all of the sort of trend. And how can Skylight identify how to increase revenue streams and direct dollars, given that a lot of the biggest brands spending the most money on these creative experiences trust our vision. And so in my ideal world, we would look to identify existing businesses even that we can help amplify and add to not just these sort of underutilized buildings and I think that’s a huge opportunity for expansion for us, is to take some of the trends where we see whether it’s Netflix or Google or these companies creating experiences, how could we layer them into existing business models and existing uses like museums in a way that museums have been so thoughtful and evolving also and doing very creative exhibitions and installations. But I think the dollars I think we could help bring the dollars and connect the dots in a way that hasn’t been done yet.

Eve: [00:36:20] It sounds fabulous. And I thank you very much for joining me. I really enjoyed the conversation.

Stephanie: [00:36:25] Well, thank you so much for having me. It was fun to talk about.

Eve: [00:36:43] Buildings is branding, buildings to tell stories, buildings to make places. Skylight studios take storied and important buildings and reinvents their future quickly while the expensive and permanent redevelopment process churns on in the background.

Eve: [00:37:18] You can find out more about this episode or others you might have missed on the show notes page at our website RethinkRealEstateForGood.co. There’s lots to listen to there. A special thanks to David Allardice for his excellent editing of this podcast and original music, and thanks to you for spending your time with me today. We’ll talk again soon, but for now, this is Eve Picker signing off to go make some change.

Image of Stephanie Blake by Allan Zepeda

Reclaiming your Community.

April 6, 2022

Majora Carter’s career as urban revitalization strategist has spanned environment, economy, social mobility, and real estate development. Her work has won major awards in each sector, including a MacArthur ‘genius’ Grant and Peabody Award winning broadcaster.

Majora’s words — “Nobody should have to move out of their neighborhood to live in a better one” — are inscribed on the walls of the Smithsonian Museum of African American History and Culture. And her new book, called “Reclaiming Your Neighborhood”, the subject of our podcast, takes a next step in her thesis – build where you live, talent will stay and your neighborhood will prosper.

Born and raised in the South Bronx, Majora has long-focused much of her work there, looking always to make positive change for her community, and in doing so, gained both national and international attention. She believes that talent retention may be the key to turning around low-status neighborhoods. And she’s backed that up with her Boogie Down Ground Hip-Hop coffee spot which she owns and operates with her husband in Hunts Point, around the corner from where she grew up.

Majora is also a lecturer at Princeton University’s Keller Center, serves as editor and senior producer at GROUNDTRUTH, a platform for telling stories of people building community power, and she previously served as associate director of The POINT Community Development Corporation. She founded and ran Sustainable South Bronx and co-founded Green for All.

Read the podcast transcript here

Eve Picker: [00:00:07] Hi there. Thanks for joining me on Rethink Real Estate. For Good. I’m Eve Picker and I’m on a mission to make real estate work for everyone. I love real estate. Real estate makes places good or bad, rich or poor, beautiful or not. In this show, I’m interviewing the disruptors, those creative thinkers and doers that are shrugging off the status quo, in order to build better for everyone. If you haven’t already, check out all of my podcasts at our website RethinkRealEstateForGood.co, or you can find them at your favorite podcast station. You’ll find lots worth listening to, I’m sure.

Eve: [00:01:01] My guest today is Majora Carter, my second interview with this powerhouse. Her career as urban revitalization strategist has spanned environment, economy, social mobility and real estate development, and her work has won major awards in each sector, including a MacArthur Genius grant. Majora’s words are inscribed on the walls of the Smithsonian Museum of African American History and Culture: “Nobody should have to move out of their neighborhood to live in a better one.” Her new book called “Reclaiming Your Neighborhood”, the subject of our podcast, takes a next step in her thesis. Build where you live, talent will stay, and your neighborhood will prosper. Look for the book on Amazon, in bookstores or on Majora’s website. There is no way around it. If you are really interested in impact investing, this podcast is a must listen.

Eve: [00:02:19] Hello, Majora. I’m so delighted to have you back on this show.

Majora Carter: [00:02:23] Thanks for having me.

Eve: [00:02:25] It’s been a while, but you’ve just written a book called “Reclaiming Your Community,” and in it you ask how we can address the problem of persistent poverty in low status communities differently. So, I wanted to start by asking you what is a low status community and what does it mean to you?

Majora: [00:02:46] A low status community to me – the way that our company defines it is a place where inequality is assumed by both the people that are in that community and those outside looking in. And so, what that what it looks like and I think that’s easier to describe that way; It’s the kind of places where there are more environmental burdens, where there’s higher rates of poverty, lower educational attainment, the kind of places where you won’t find diverse options for food. Not many great places to invest your money or you’re charged for it, like through check cashing stores or places like that. And it’s just literally the places where inequality is just understood. And so and they look different. They can be inner cities, they could be Native American reservations, they could be the kind of former booming Rust Belt towns that only white people lived in. But the jobs are long gone.

Eve: [00:03:44] This is a really big and hard question. So why is it difficult to improve the status of a low status neighborhood?

Majora: [00:03:52] Well, like a lot of things, it comes down to who benefits from it. And because if you look at those communities, literally billions of dollars are pumped into them through the philanthropic industrial sector and as well as our government. And it looks different, but it comes in the form of whether there are subsidies to build very low-income housing and homeless shelters, whether it’s the multibillion dollar economic engine that’s our pharmaceutical industry that absolutely does profit off of lifestyle related health conditions from diabetes and obesity and heart conditions. And it’s the, you know, the fact that there’s such low educational attainment but really, we’re not investing in public education within those areas either. And so, again, so it’s always like a problem to be solved. Again, folks, there are definitely industries set up to perpetuate that and actually benefit from them, but the people in those communities are not getting any better.

Eve: [00:04:53] So how does the redevelopment industry impact this cycle?

Majora: [00:04:58] Yeah, so like I think there’s an old saying, “all relationships are about real estate” and I believe it’s true in this regard because real estate development can be used as a transformational tool if we use it that way. I mean, think about it. What we’re doing is literally redefining what constitutes what is happening in those areas. So, when you do it by creating really interesting commercial, industrial, residential development. And so, you can tweak the formula and create benefits for the people that are there or not. Right?

Eve: [00:05:32] Right.

Majora: [00:05:32] And so if we’re thinking about development as a transformational tool and if we know that sort of status quo development, which either content to concentrate poverty and everything and all the ills associated with it from low health outcomes, low educational attainment, you know, higher rates of people being incarcerated. If we know that, then what if we designed those places and developed them in ways that actually promoted the opposite?

Eve: [00:06:01] Right.

Majora: [00:06:01] And that’s when we decided to look at a tool. We literally borrowed a page from the business community that looks at if you are an employer, if you own a business and you train, you hire your staff, that’s your talent and you pour resources into them, whether it’s training or benefits or reasons for them to want to stay. You know, you’re not doing it so that your competitor will hire them away. You’re doing it so that your talent sees you as the place to be. But we don’t do that in American low status communities. We don’t treat our communities that way. And so, what we’re trying to do is apply a talent retention approach to real estate development. Like what do folks that are born and raised in those communities, the talented ones, the ones that are either academically or artistically or any kind of talent, the ones that are literally taught to measure success by how far they get away from those communities, what can we do to keep them there? And so, we ask, what are you looking for in the community that you desire? We ask community members in my hometown in the South Bronx, what’s that? In that classic kind of low status community and people of all income levels, they were looking for kind of things that made them feel good about being in their own community, whether it was good places like cafes, restaurants, great parks, places to play and work. Those are the kind of things that they wanted. And so why aren’t we building those things here in our own community? And that is when we realize that that’s the kind of real estate development we wanted to do. And we labeled it a talent retention, real estate development strategy.

Eve: [00:07:47] You talk about real estate development impacting low status neighborhoods in one of two ways, and the first is displacement gentrification, which we touched on, and the second is poverty maintenance. So, tell me about poverty maintenance.

Majora: [00:08:03] Yeah. So, poverty level economic maintenance as we’ve called it, or PLM, which really sounds gross, but because it kind of is, where again, billions pumped into these communities from government and philanthropic sources, but the economic level of the people in that community does not change. So, subsidies that go to low income, quote unquote, affordable housing developers, which is only for very low income housing and even homeless shelters, lots of money in terms of the health clinics and the multinational pharmaceutical industry that are government subsidized and actually do support lifestyle illnesses according to, whether they are diabetes, obesity. But things related to the quality of life that that happen in communities, low status communities and seeing those type of things, even community centers that are that I think are often just there’s like resources that are poured in specifically to support the bright ones in the community. And so those are the ones that measure success by how far they get away. And those type of things literally pull people outside of our own community to seek greener pastures. But again, the people that remain are usually the ones that remain in poverty. And that is the way that those communities are treated.

Eve: [00:09:31] Right.

Majora: [00:09:32] Whether it’s by the philanthropic and our government interest, it’s like we play to that in terms of like creating more low-income housing, more health clinics and opportunities to support people that are chronically suffering from lifestyle health conditions. And through that, we are not seeing the kind of transition from people who are actually creating more healthy opportunities for them, for themselves in those communities. And we’re seeing more and more money pumped into those things. And thus, we’re seeing the concentration of more and more poverty and all the things associated with it, whether it’s low educational attainment, higher rates of folks involved in the justice system, poor health outcomes, and more reasons for more people to want to leave those communities. So again, poverty level, economic maintenance, somebody is doing well, but not the people that are in those communities.

Eve: [00:10:27] So, you know, I think actually in the built environment, what you’re talking about is perpetuated by the affordable building types that we see, because you can really drive through a neighborhood and you can see you can point out affordable housing very clearly. And that, I think, is a very visible manifestation of that Poverty Maintenance or PLM, as you called it.

Majora: [00:10:49] Yeah. The architecture of poverty is, you know, you know it when you see it.

Eve: [00:10:55] Yes.

Majora: [00:10:55] It’s kind of like pornography. It’s like you know it when you see it.

Eve: [00:10:59] Yes, it’s true.

Majora: [00:11:01] Yeah, it may look different in a rural or urban or a suburban context, but everybody knows.

Eve: [00:11:07] That’s right. So, you know, you’ve already touched on this, but you write about how third spaces are key to talent retention in low status community economics. And so what is a third space?

Majora: [00:11:21] So, third spaces are these urban planning parlance for places that are neither work nor home. Right? And it’s just this third space where community can happen. And to us, community is not just a place, it’s an activity. Right? It is literally an action verb, but you do need places to do it. And so, if you don’t and so if you’re in general, if you’re in a low status community, the kind of places, the kind of third spaces that are in those communities are generally not the kind of places where people feel like they’re vibrant and they’re working to support the kind of goals and aspirations for their lives. It’s like, I think about some of the places in my neighborhood in the South Bronx where the largest places were communal real estate was either the waiting rooms at health clinics or pharmacies and also community centers where most people do not go and hang out or don’t want to be seen in. Right. Or for long anyway. And it’s just like, you know, in terms of cafes or cool places to hang out, very few. And so that’s when we realize we’re creating this this architecture or the architecture that’s here is literally creating this sort of like talent repulsion experience for people who are feeling like, I know I’ve got something good to offer because I don’t – Low status communities have never had a shortage of amazing people coming from them. Right. But I do have a problem with them staying. I mean, even America loves the Cinderella story of like somebody being born into some kind of hardscrabble community and they have to pull themselves up and then they go out and make something great of themselves. They’re coming from these communities. Why can’t we make something of ourselves here?

Eve: [00:13:13] Yeah.

Majora: [00:13:14] And that’s both the challenge, but also the joy of realizing that it’s not just this thing that this this miracle that needs to happen, it’s something that we can do because we already have the tools and the keys to our own recovery within our own communities.

Eve: [00:13:33] So, you know, I visited you in the Bronx and there’s not a lot of third places there. But you created a coffee shop, and didn’t you tell me that it was voted, what was it voted, number one?

Majora: [00:13:44] We were voted the best cafe in New York in 2021.

Eve: [00:13:49] Can you believe that? That’s awesome.

Majora: [00:13:51] Yes, I can. Yes, I absolutely can. And it’s because we but it was by time out in New York and it was because we were, and yes, we do have great specialty coffee. I’m sorry. Do you hear that.

Eve: [00:14:09] The dog? Yes.

Majora: [00:14:09] Yes, I’m sorry.

Eve: [00:14:10] Everyone will have to deal with the dog on this podcast.

Majora: [00:14:13] I know.

Eve: [00:14:14] Is my life, right?

Majora: [00:14:15] He’s like really upset because my husband just walked out and he’s like, “don’t go” anyway. I’ll Start over. But yes, we were voted best cafe in New York City in 2021 by “Time Out New York magazine.” And I like to think it wasn’t just because we’ve got great coffee and tea and an awesome local craft beer and wine and sangria, but and really awesome community vibes. But it really was the vibes part because what we did was really instil within our community that our cafe was simply a vessel in which to hold all the great hopes and dreams and aspirations of our community and then gave it a platform to show it. We absolutely took advantage of having to do much of our work outdoors because of COVID, and suddenly we became this, this wasn’t just encased within the four walls of our cafe, but we took it outside and people were doing things like open mics and even credit repair workshops and art exhibits, and basically it was just such a liberating way for people to see how beautiful their community was. And because it was literally like spilling out onto the sidewalk for everybody to see. And I feel like that is the reason why we won that award. You know, not, you know, again, we do have really good stuff there, but it was mostly that we created this this environment that allowed people to see how beautiful their community was and participate in it.

Eve: [00:15:54] So you tested this thesis out. Do you know of any people who stayed in the community because of this third place? So, what’s next? How do you – that’s a big block you’re on, by the way. And yes, that’s going to take quite a lot of work to transform into a community asset, shall we say.

Majora: [00:16:12] Yes. Well, you know, you’ve got to start somewhere. I mean, some environmentalists would say, what’s the best time to plant a tree? You know, 20 years ago. What’s the next best time? Today. And so that’s where you start. And you have to start somewhere. And by creating examples and showing them what it does do is give people that are open to it an opportunity to say, well, if they could do something, why can’t I?

Eve: [00:16:37] Yes.

Majora: [00:16:37] And that is exactly what we’ve seen, like our little cafe has, actually, because it’s just allows people to connect together. We’ve seen everything from people being able to buy homes from one another. We’ve seen people start new businesses and locate them within the community. We’ve seen people develop their own capacity to see themselves as a different person, but the same one, but being able to do it within their own community. I’ve been incredibly excited by seeing folks realize that looking around and going, Wait, there’s people like me here. Why do I feel like I need to to escape when I could build something right here? So, yes. And what’s also super exciting is that I’ve also seen folks from around the country intuitively do this. And writing this book was simply a way to help other folks see that this may be mostly my story and how I got to the point where it’s like reclaiming my community was something that I want to see everybody to do because I feel like we have to do something to sort of repair the social fabric of our country. And we should start in the places that are most impacted by some of the specious problems that whether it’s systemic racism and classism have actually created in this country, but really created low status communities that are not helping us as a as a country evolve into the greatness that it could be.

Eve: [00:18:11] So I know you’re also working on a second third space, which I’ve had the good fortune to visit.

Majora: [00:18:16] Yes.

Eve: [00:18:17] A beautiful old railway building. Tell us about that. What’s going on there? It’s not far away. It’s like less than half a block away from your coffee shop, right?

Majora: [00:18:28] My world is really small at this point. I mean, the coffee shop is literally a three-minute walk away. The other project that you’re referring to is even a minute walk away from where I live.

Eve: [00:18:41] Yes, yeah, yeah.

Majora: [00:18:43] It’s a historic rail station designed by Cass Gilbert, America’s first starchitect, as they call them, Cass Gilbert, who designed also the Woolworth Building and the US Supreme Court building. It was quite the dandy in his day in the early part of the 20th century, and so we had this beautiful aesthetic. And so, this old rail station is about 4000 square feet, and so we’re transforming it into an event hall. So, my husband James and I actually literally did the initial demolition ourselves. Fortunately, we got other people to help us to finish it up, and it’s super exciting because the idea that we can take a space and by its nature as an event hall, it’s literally being filled by other people to do all sorts of things. And so we’re hoping to see it used as an amazing music venue, which actually sort of hearkens back to literally right across the street from where the rail station is, used to be a place where vaudeville excuse me, vaudeville, you know, Latin music as well is like it was like a musical and theater place where people would come right across the we want to bring some of that back as well. You know, and it’s also really interesting for me because that rail station is the reason why my family decided to settle there. My father was from down south, a big old black man who was a Pullman porter, and he bought our house for cash because back in the 1940s, there weren’t a whole lot of banks giving money to black men for mortgages. So, he actually won 15,000 in a horse race in California, put it in a satchel, literally cash, put it in a satchel, brought it back to New York. You found an Italian family that would sell to him, and he bought it.

Eve: [00:20:38] Which, in itself, was unusual, right?

Majora: [00:20:41] Literally, yeah. And he didn’t feel comfortable staying in the house for a couple of years, so he just rented it to them because it was the neighborhood was all white, but he bought that house because there was talk that they were going to reactivate that particular rail station and that was actually his line. So he was just like, Oh. Two blocks from my house. That’s what I want!

Eve: [00:21:01] He understood the power of transit, right?

Majora: [00:21:04] Exactly. Unfortunately, they never reopened it for transit, but he did have the conductor to slow down the train so he could hop off and climb out to his house.

Eve: [00:21:12] Oh, that’s great.

Majora: [00:21:13] Yeah, so that was pretty funny.

Eve: [00:21:16] Right? So, you know, I have to go back to the words that you’re quote that’s on the walls of the Smithsonian Museum of African American History and Culture. And you said, “Nobody should have to move out of the neighborhood to live in a better one.” And it really sounds like you just got tired of waiting around for someone to fix yours.

Majora: [00:21:34] Yes. In a nutshell, it was just like, you know, I mean, it was a little deeper than that, actually, because it really did come from this place where, you know, because I was one of those kids who measured success by how far she got away. I was told from very early on that I was a smart kid and that I was going to grow up and be somebody. And of course, I believed that I was just like I was really smart. I was reading when I was three. I was like, I’m getting out of here, especially when my brother was killed. And, you know, and I did watch, you know, because of financial disinvestment. All, so many of the buildings in my neighborhood were burned down. And I watched a lot of it. And there was a there was some trauma associated, I think, with like seeing and feeling these things, experiencing these things. So, yeah, I was like, education’s going to be my ticket out. And it was until I ended up back here only because I was broke and I needed a cheap place to stay when I went to graduate school. And that’s the only reason why I came back. And it did. It felt like such a horrifying defeat to be this kid with like I had a bunch of letters behind my name. I went to good schools, and then all of a sudden, I’m like back home and mommy and daddy’s house in the South Bronx. Hard and, but what was amazing was discovering that that education and distance actually was a blessing because like that’s when I saw when the city and state were building this huge waste facility on our waterfront, and we already handled an enormous amount of it. I was like, Oh my gosh. Like, it’s because we just this is history repeating itself. We are a poor community of color, politically vulnerable, and this is what happens. And all I could think was I mean, first was shame when I understood it and I was like, oh, like I just wanted to run away. And I did. And you know what? No one blamed me. But now I see it like, literally, with like eyes completely wide open, and I wanted to do something about it. And yeah, like, I wanted nice things in my own doggone community. Absolutely. For me and for everybody else.

Eve: [00:23:51] Yes. Yeah. I don’t know what to say next because I know how hard it’s been for you. It’s an amazing it’s an amazing journey that you’ve taken. I just want to say that. So, you also talked to me about the Jumpstart program in Philly, which I actually I interviewed Ken Weinstein, who launched the program in our second podcast season. If anyone wants to listen, it’s an amazing program. Tell me about it and why you why you love it so much.

Majora: [00:24:23] Wow. Yes. So, I was actually getting an award in Philadelphia, and it was the Edward Bacon Award who was actually it is Kevin Bacon’s father. And but he was like this amazing urban planner in Philly, and everybody loved him. Yeah.

Eve: [00:24:42] Yeah, yeah.

Majora: [00:24:43] And so I was getting this award and like part of it, and it’s like a really big thing over there. And so, part of it was that I got to hang out with some, some notable people in Philly, and I was like, okay, cool. And I sat in on this roundtable with graduates from this program called Jumpstart Germantown. And they were all, almost all black folks younger than me. And they were all talking about, like, the deals that they were doing. And I was just like. What? This many in a major American city talking about real estate deals and what they’re doing and how they’re doing it. And I was amazed. And so, but Jumpstart Germantown literally was a way to get folks from communities just like mine to be more involved in residential real estate development in Philadelphia, in Germantown. And so, the way that it was done, Ken Weinstein was literally, was getting inundated with, because he’s really a nice affable guy, and folks were just like, how do you do this? And he’s just like, oh, I can tell you. And he’d give them that information, and then he realized this is too much. And then he got his friends like help, created a training that gave people just enough information so that they could actually get out on their own. And then the best thing that he did was create a fund. So, where he gave the first couple of loans to those folks to do their first few deals.

Eve: [00:26:13] I remember him saying he realized that no matter what he taught them, if they couldn’t get the financing, it was useless.

Majora: [00:26:18] Exactly.

Eve: [00:26:19] And they couldn’t get the financing.

Majora: [00:26:20] No, no, no.

Eve: [00:26:22] What a guy. Yeah.

Majora: [00:26:24] So I was just like. Wait. What? And I totally flipped out and actually decided, I mean, I literally went to Philly for the next four weeks to just to take that class. And I’d love at some point to be able to start a project like that here in New York. And I actually encourage everybody to consider it in other places, too. But again, what we saw there was an incredible example. It wasn’t like a non-profit kind of like, “Oh, we’re here to help the poor people.” It was more like, “Nah, we’re going to help you compete” in this capitalist system that we’re in so that you can actually reclaim your own doggone community. And I was blown away.

Eve: [00:27:05] Pretty fabulous. And he’s franchised it, right? So, there have been a number of different neighborhoods and cities that are now have jumpstart programs.

Majora: [00:27:13] Yes, quite a few at this point.

Eve: [00:27:15] If I weren’t so busy, I would start one.

Majora: [00:27:17] I know.

Eve: [00:27:18] Pretty it’s pretty fabulous. But requires a little bit of resources. I want to ask one other big question and that is what does meaningful community engagement look like, especially when it comes to redevelopment of an area? What should it look like?

Majora: [00:27:37] Yeah. For us, meaningful community engagement means that it’s actually driven, at least in part, by listening to what the community’s hopes and dreams and aspirations actually are. And by no means assuming that you know what they are before you start. Because if you do, basically what we’ll do is what we see the non-profit industrial complex and even our government telling us what needs to happen in those communities. And that’s the same kind of status quo development that actually concentrates poverty. And what we did, we literally created surveys and did focus groups, and we even had an advisory board built from very informal leaders within our community that allow folks to give them reasons to think about. Yeah, what does it look like? What does a great community look like for me? And they were really specific about what those things were, and we knew it because they would talk about the things that they would leave the community to experience. And when we realized like honestly, where somebody’s hardest is, where they spend their money, and if you weren’t spending it in your community, what were you spending it on? And could we actually create the same kind of experience in our community that make people that just to give people a second look. And it has been hard because there’s such low expectations applied to low status communities and after a while people even internalize them. And that’s why it’s difficult to do that, which is why I’m so glad that I’ve actually gotten there’s company now. I mean, being the first one in to do something as crazy as like a really high-end specialty coffee shop in a place that hasn’t had anything like that in decades. It was exhausting. But at the same time.

Eve: [00:29:35] You got a lot of pushback early on from the neighbors, right?

Majora: [00:29:38] I got some pushback. I didn’t get a lot. What I got was they were very loud, but I think it was basically rooted in fear.

Eve: [00:29:46] I agree. I was going to say the same thing. I think change is very difficult for most people. And.

Majora: [00:29:52] Yeah.

Eve: [00:29:53] And they’re worried about being left out, you know, and, and they usually are left out, let’s be honest about it. So, you know, that was really why I asked that question. Like, how do we make people feel like part of something?

Majora: [00:30:08] Right, and their people are left out because the folks that are doing most of the development never had any intention of letting them in in the first place. I mean, if you think about the kind of development that happens in poverty level economic maintenance, I mean, there isn’t a place for most of the people in our community to even participate at all. I mean, there’s this thing, like, oh, we do community engagement and outreach, which means you get people together for some kind of little visioning thing and some ridiculous highly paid consultant gets like post-its up on a wall. And then you say, you did it. What did you do? I mean, it’s just like this is ridiculous. The kind of development that happens in low status communities was never intended to include people from those communities, except as recipients of like whatever they’re putting out, which we know concentrates poverty, and everything associated with it.

Eve: [00:31:04] Or gentrified it. Right. But either way, they’re left out. Yeah.

Majora: [00:31:09] Yeah, totally. And so, they know that. And that’s why I’ve been advocating as much as I can and also literally putting myself in that role of developer because I’m like, I’m already trying to create more opportunities for folks like we’ve done revenue shares for the cafe. We, we set it up so that people from our community can actively use it in a way that meets their goals and dreams and aspirations. I do that and I’m not a non-profit of not like I do that on my own. We’re absolutely looking to develop more opportunities for crowdfunding investment projects, for people within our community, for the other projects that we’re doing, because we want them to feel like they actually have an investment in their own community. And the only way to do that –

Eve: [00:32:01] I’ll help you bring them to Small Change. That’d be so cool, I’ll be waiting.

Majora: [00:32:02] I’m pretty, I would love that. I would love that. So, it is different when people do the development from our own communities because we are sensitive to what we haven’t had and what we do need and what our dreams are, because we bothered to ask and I’ve also experienced it, you know, I was that little girl who was just like, there’s nothing in this neighborhood. And it makes me feel like I’ve got a stain attached to me because of the way people think about my community. And, and I don’t want that on anybody. Like, I also don’t want them to feel like they’ve got to leave in order to believe that that they’re of any value.

Eve: [00:32:48] Awesome. So final question. If you were to change one thing about real estate development in the US to make better cities for everyone, what would that be? Maybe that’s unfair, you can say two or three.

Majora: [00:33:04] Yes, I’m going to say a few things. I’m sure. So, oh, gosh. If I could change the way real estate development happens in order to support more people doing it. I mean, I’m not exactly sure how to do this, but I know that the cost of doing it just literally is physically doing it is just so high. And I just wish that the cost of construction could go down. Don’t ask me how to do that.

Eve: [00:33:30] Oh God, yeah, everyone I think wishes that.

Majora: [00:33:33] But it’s just insane. And then sort of like the barriers to entry I wish would be a lot more equitable. I mean, I remember my very first deal where and it was just to do a small rehab know our mortgage broker literally made me write a letter because she looked at me, looked at my community and literally said, you know, I have a story in the book. She was like. Why did you want another house? Or another property? You already have one. And I was like, do?

Eve: [00:34:09] Because this is called wealth creation. This is called Building My Future, right?

Majora: [00:34:14] Yes. And but she, to her, it was just like, why would a black woman want to do that? Especially from a neighborhood like that. And so, she made me write a letter to the underwriters explaining to them that I was a fine, upstanding individual. That does nice things for her community. And I was like, I know she doesn’t ask any white men about this, but you know what? I wrote the letter. So, this was me. And I had great credit, property in mind, a willing seller, a free development loan, already pre-approved. I mean, it was just like and that’s a small example. You know, I hear about them all the time, you know, access to capital, how hard it can be.

Eve: [00:34:58] Yeah. So do I, I think the access to capital is completely inequitable.

Majora: [00:35:02] Yeah, exactly. And those are the main two things. But also, I think the other one is making sure that people in low status communities see themselves as rightful developers of their own community. Because that is one of the hardest things where I think even some of the challengers that I get is more like, who do you think you are? And these are people from communities like mine within the social justice industrial complex who are just like, “You shouldn’t do that.” And it’s just like, why should that? It does like because again, such low expectations of folks in our communities like here, I’m being challenged because I’m actually saying, no, I can do better than what’s actually happening here. Yeah. And I get it coming and going sometimes. But there are more people who see the value of it and who are actually thinking about how they can do it themselves.

Eve: [00:35:59] Well, thank you, Marjora. I love you to death. And I think this is fantastic. And I can’t wait to visit again.

Majora: [00:36:08] I know.

Eve: [00:36:09] Hang out in that coffee shop.

Majora: [00:36:11] Yes. Yes. Oh, my gosh. It’s so super exciting. And wait till you see the rail station within the next few weeks. We’re getting it ready for a pretty big event. Ted X the Bronx is

Eve: [00:36:25] Fabulous!

Majora: [00:36:26] Doing their event there. Yeah,

Eve: [00:36:27] That’s really fabulous.

Majora: [00:36:29] You know, we’re phasing it in.

Eve: [00:36:31] I have to come back again soon.

Majora: [00:36:33] You’re going to love it.

Eve: [00:36:34] Cool. Okay. Bye.

Majora: [00:36:35] Thank you. All right. Take care. Bye bye.

Eve: [00:36:44] That was Majora Carter. I’m repeating myself, but I’m still in awe. Majora is uncompromising about her mission. She lives and works in Hunts Point in the South Bronx, one of America’s lowest status communities, just two blocks from the house she grew up in. When it became clear that no coffee shop operator wanted to operate out of her space in the neighborhood. She created her own business to achieve a goal. Now that is putting your money where your mouth is.

Eve: [00:37:27] You can find out more about this episode or others you might have missed on the show notes page at our website RethinkRealEstateForGood.co. There’s lots to listen to there. A special thanks to David Allardice for his excellent editing of this podcast and original music, and thanks to you for spending your time with me today. We’ll talk again soon, but for now, this is Eve Picker signing off to go make some change.

Image courtesy of Majora Carter

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