On Common Ground is a NAR publication devoted to presenting a wide range of views on smart growth, with the goal of encouraging dialog among REALTORS®, elected oﬃcials, and other interested citizens. With an eye towards issues like sustainability and walkability that appeal to modern consumers, it’s an excellent resource for commercial real estate practitioners interested in smart growth and community building. Enjoy this article from a recent issue and view all issues of On Common Ground by visiting www.nar.realtor/publications/on-common-ground.
Alexandra Ferguson, CEO of her eponymous line of custom pillows and décor, started as a small, home-based business. "I first sold my pillows on Etsy, so I'm as homegrown as it gets," says Ferguson. When it was time to expand, Ferguson had a hard time finding an inexpensive, light manufacturing spot in Westchester, New York. "I decided to look in Brooklyn and Queens as the talent I needed could be found in those areas," she says. She ended up moving into a 4,000-square-foot raw industrial loft space in Industry City, an innovation and manufacturing district situated on the waterfront in Sunset Park, Brooklyn.
Industry City is transforming ground floor and lower levels into a pedestrian-friendly series of shops, showrooms, event spaces and courtyards, loosely organized around themes such as food and food production, children and family, and home goods, while providing ample loading docks and service ground for upper floor innovation economy and manufacturing tenants. These mixed-use maker spaces, developing around the United States, are becoming a popular choice for real estate developers hoping to revitalize communities and accommodate small manufacturers.
More and more cities and real estate developers are creating spaces for small-scale manufacturing. Small manufacturers, or makers, in textiles, wood, metal, and electronics need places that are appropriate in scale, which are affordable, and that meet local zoning and building codes. Maker spaces can provide some shared facilities and equipment, as well as mentoring and assistance in running a business.
"We are seeing a resurgence of small, local producers who are harnessing low-cost technology and changing markets to sell hundreds and thousands of locally produced consumer products," says Ilana Preuss, founder of Recast City, a company that brings together small-scale manufacturers and community developers to strengthen neighborhoods, build real estate value, and create more job opportunities for residents.
Documented by Chris Anderson, author of "Makers: ffe New Industrial Revolution," and seen across the country today, these companies are often businesses with fewer than 20 employees and sell both in local markets and globally online. In an interview with Forbes Magazine, Anderson notes, that, "Until a few years ago, you just didn't have access to production. The world is oriented around companies, and manufacturing was expensive and consuming." All of that is changing.
According to its study, "The Federal Role in Supporting Manufacturing," by the Pratt Center for Community Development and Brookings Institute, despite recent recessionary shocks, manufacturing continues to play a central role in the American economy and still serves as a gateway to the middle class for a sizeable segment of the nation's population. Today, says the report, approximately 11.7 million Americans are employed by the country's 300,000 manufacturing firms, and over 7 million additional jobs are supported by manufacturing-related activities, including jobs in transportation, wholesaling, and service industries, such as accounting, consulting, real estate and finance.
The report goes on to say, "Unlike the days when large companies dominated the nation's commodity production, today's manufacturing landscape is largely occupied by decentralized networks of small, specialized firms — many of which are hidden in plain sight in America's urban areas. In fact, in 2007, of the approximately 51,422 manufacturers in the United States employing fewer than 20 people, over a third were located in the nation's 10 largest cities alone. These businesses make an astonishing range of products — from high-tech medical equipment to designer coats, artisanal food products to specialized coatings — and serve a spectrum of customers and markets, including small suppliers, contractors, the consumer public, and large original equipment manufacturers (OEMs)."
"There is a rebirth of modern manufacturing; I call it the innovation economy and that's where the job growth is," says Andrew Kimball, CEO of Industry City. New technology allows people to manufacture in small spaces," he says. "There's a blurring of technology, manufacturing and design. The good news for cities is that these kinds of businesses start small and often grow over time. They employ people who need jobs the most, jobs that are broadly accessible to those with a broad range of educational backgrounds," says Kimball.
That's the case with Ferguson, who has a "one-stop, supere fficient space that includes her office, photo studio space, manufacturing, warehouse and shipping all from one place." In addition, Industry City has efficiencies built in, such as the ability to outsource to other suppliers who are in her same building. Her business grew from one employee to five employees in the short 18 months she's been in Industry City.
This article excerpt appears in the Commercial Connections issue Summer 2016: Building Opportunities, Community & Our Future. It originally appeared in On Common Ground.