In an attempt to foster a vibrant urban environment, the Milwaukee city zoning codes often require new buildings in the downtown area to have retail space on the first floor. However, that space has been difficult for many building owners to fill, especially since the Great Recession began.
Mandel Group Inc., one of Milwaukee’s biggest developers of condominium and apartment buildings, is offering some of its vacant retail space in the Historic Third Ward at virtually no cost to creative class entrepreneurs.
Plaid Tuba Holdings LLC, an organization founded by artist Reginald Baylor to support himself and other artists in the community, is occupying about 2,000 square feet of space in the Marine Terminal Building at 311 E. Erie St.
Translator LLC, a digital experience agency, is occupying about 1,800 square feet of space in the Gaslight Lofts building at 217 N. Broadway.
Both tenants are leasing the long-vacant spaces for $1 per month.
In addition to Baylor, Plaid Tuba has a graphic designer, a photographer and a leather craftsman. The space provides them with room to work and to exhibit and host shows. The collaboration provides opportunities for the artists to work together and develop ideas to grow their business, Baylor said.
The space provided by Mandel Group is providing a unique opportunity for these artists, said Baylor and Translator partner Mark Fairbanks.
“This is a premier location being right in the heart of the Third Ward that would be prime dollar (to lease),” Baylor said. “It would be almost impossible for a start-up to be able to afford this space without a lot of risk by borrowing a lot of money.”
“I think for a start up it would be extremely difficult (to pay a Third Ward lease), especially in this economy, unless you have some investor backing,” Fairbanks said. “We love (the space). In the Third Ward, there have always been a lot of creative class people working in the area.”
Mandel Group benefits from the arrangement by having highly visible first floor space in its buildings filled with tenants that help make the buildings more attractive to residents and show off the possibilities of the retail space, said chief operating officer Robert Monnat.
“These buildings are long-term assets,” Monnat said. “We need to think long-term. We want the right user. You can only have so many discount hair cutting places and sub shops. In the Third Ward, the right user is the creative class. The Third Ward presents a very unique business opportunity for certain types of people that may not make it elsewhere.”
The buildings are profitable even if the first-floor retail space stays empty, Monnat said. Filling the space is a way to help promote fledgling creative class businesses and to enhance the image of the buildings, he said.
“In an unusual economy, you do unusual things,” Monnat said.
Mandel Group may provide more free space to creative businesses, but will be selective about which businesses and will select tenants that it already has a relationship with, Monnat said. Tenants such as Plaid Tuba and Translator have a lot of potential, and Mandel Group hopes to provide a spark to help them launch their businesses.
“In the creative space, somebody trying to get the business off the ground, the last thing they want to worry about is making a lease payment,” Monnat said. “There is almost a moral obligation to help start-ups and creative people by giving them an opportunity they might not otherwise have. These businesses need a chance. They need time to grow. (Small and start-up businesses) is where jobs are created.”
If the creative tenants become successful, Mandel Group hopes they become full-paying tenants, although they are not obligated to do so.
“It’s not 100 percent altruistic on our part,” Monnat said. “We’re hoping for these people to eventually lease space from us as they prosper and succeed. And we want to attract the right type of people to the buildings.”
