Affordable manufacturing space is a driver for equitable economic development
Shortly after the COVID-19 lockdown hit Pittsburgh, local backpack company Day Owl switched from making backpacks to making face shields. The company did this in its 6,000 square foot lightweight manufacturing space inside 7800 Susquehanna Street, a hub for manufacturing, manufacturers, small businesses, nonprofits and training. professional.
As Day Owl shifted its operations, they also drew on the resources of the 7800 Susquehanna. Bridgeway Capital, the non-profit organization that owns and operates the building, connected Day Owl with engineers, laser cutters and die cutters, creating 17 jobs. “In one month, we were making two to five thousand face shields per week, for the next three months,” says Sam Klein, Day Owl’s COO.
This is the kind of collaboration Bridgeway Capital envisioned when it opened 7800 Susquehanna Street in 2014, not only as an affordable manufacturing space, but also as a community asset for tenants and the surrounding neighborhood of Homewood. Since opening, the building has reached 100% of its capacity with 23 tenants – none of whom lost their lease during the pandemic – with companies creating 97 full-time jobs.
The building is an example of how urban manufacturing can be an engine for equitable economic development, according to a report from the Urban Manufacturing Alliance. The report, which offers policy recommendations to the federal government to support urban manufacturing, highlights the need to modernize industrial real estate and create community assets, while outlining the challenges facing current mission-driven developers in the city. transformation of industrial real estate for marginalized communities.
For Bridgeway Capital, a Pittsburgh-area nonprofit financial and community development institution founded in 1990, its first foray into industrial real estate had a real impact. The project, according to Development Director Dawn Seckler, “was a very big change for Bridgeway, and a big change.” This resulted in building the internal capacity of the organization as well as the transformation of a once vacant warehouse in the low income neighborhood of Homewood.
As the owner, Bridgeway has selected tenants in the building interested in creating jobs for Homewood residents. The Trade Institute of Pittsburgh, for example, trains people returning from the criminal justice system in skilled trades such as masonry, carpentry and welding; five program graduates have found full-time employment with 7,800 tenants in Susquehanna.
To help seedmaking and other small businesses within the larger Homewood community, Bridgeway opened the Sarah B. Campbell Enterprise Center on the ground floor in 2019. During the pandemic, the nonprofit organization Profit has arranged meetings there to help neighborhood businesses navigate relief funds and PPP loans.
Bridgeway has also worked with its tenants to make sure no one loses their lease due to COVID-19, helping develop payment plans and directing them to emergency loans. “As the owner, we never tried to be punitive,” Seckler says. “Because Bridgeway is the parent organization behind this, we have enough capital to be able to be flexible like that. ”
Seckler notes that the 7800 Susquehanna would not have been possible without significant financial support, including an investment in the New Market Tax Credit and grants from the Richard King Mellon Foundation and the Pennsylvania First state program. As the Urban Manufacturing Alliance report notes, mission-driven developers require significant initial capital to transform industrial real estate to meet current manufacturing needs.
To this end, the report also highlights the Nonprofit Industrial Developers Fund launched by the Economic Development Corporation of New York City in 2017 to “help preserve and develop our industrial ecosystem and the jobs of quality it creates ”.
“Simply put, we couldn’t develop industrial real estate without a massive subsidy,” says Leah Archibald, executive director of Evergreen Exchange, an industrial business support organization that received money from the fund to redevelop the 500 Stagg Street, an industrial building in Brooklyn. The organization competes with a variety of buyers, from nightclub owners to large businesses in need of warehouse space, to real estate.
Evergreen Exchange had hopes for 500 Stagg Street similar to those Bridgeway Capital had for 7800 Susquehanna: transforming a warehouse into an affordable and flexible space for small manufacturers and providing them with commercial and technical support.
But COVID-19 has delayed the city’s $ 4.8 million grant, which still has not arrived. Evergreen Exchange handled the resulting complications, including increased insurance costs. “This is our fifth building, it’s not like we’ve never done this before,” says Archibald, “But there was a lot that we didn’t know. For newbie developers to benefit from this, they – and we – just need a lot more tips and advice. ”
Evergreen Exchange, like Bridgeway, has shifted into high gear to support its business community during COVID-19. In a typical year, the organization helps about a dozen businesses get financing; last year, Evergreen helped 280 businesses. These types of mission-driven organizations are essential to any city’s manufacturing ecosystem, the Urban Manufacturing Alliance believes, but they receive limited federal support.
“Federal and state governments must put in place an infrastructure of grants, tax incentives and expertise to support nonprofit industrial development, as they have done for affordable housing over the past 30 years.” , indicates the report. “In high-market cities, they can protect manufacturing jobs from displacement; in low-market towns, acquisition by a community organization can both prime the pump for private investment while providing space for local jobs and businesses.
Archibald and Seckler both spoke about the importance of an affordable manufacturing space, and the types of well-paying jobs that space supports, for the communities they serve. “It’s excellent economic development,” as Archibald puts it. “Not only do businesses get below market rent and a pretty cool landlord, we take all the profits and turn them into services for other businesses in the area.”
This article is part of “Centering Equity in Urban Manufacturing”, a collection of stories on the intersection of racial equity, manufacturing and community development, as these issues are linked to access to capital, development of labor, land use and the cultivation of healthy manufacturing ecosystems. This journalism is produced with the support of the Urban manufacturing alliance, which published a policy recommendations report titled “Focus federal industrial policy on racial justice and community development. “You can find the webinar we produced for this series here.
Emily Nonko is a Brooklyn, New York-based reporter who writes about real estate, architecture, urban planning, and design. His work has appeared in the Wall Street Journal, New York Magazine, Curbed, and other publications.