Retail Incubator Eyed For Downtown

from TCBN March 2023

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By Beth Milligan

At a recent board meeting, Traverse City Downtown Development Authority (DDA) board members expressed support for a project to create a retail incubator downtown.

The DDA has already set aside $50,000 in TIF 97 funds for the project, in addition to receiving an $80,000 USDA grant. Jean Derenzy, CEO of the DDA, has since secured a location for the retail incubator, partnering with Tim Pulliam and Steve Morse to lease nearly 2,000 square feet of space at 116 Cass Street (the southern part of the building that houses North Bar TC and The Pub on the corner of Cass and Front streets).

According to The Ticker, under the agreement, the DDA would contribute $83,500 to a buildout of the space, including adding windows and door access along Cass Street, public restrooms, and interior renovations to accommodate 8-10 start-up businesses in retail stalls. The DDA would have a 10-year lease on the space – with the option to renew or opt out after five years – and would pay a monthly rent of just over $3,500. That rental cost would be split among the incubator tenants based on their square footage. The combination of TIF 97 and USDA funding will cover the buildout and operational costs for up to two years, after which point Derenzy believed the incubator would be self-sustaining. However, she said a second round of USDA grant funding could also be available to further support the project.

Derenzy said incubator tenants would likely be all retail – not food or other services – and would be allowed to stay up to 18 months, having access to mentorship and support through organizations like Traverse Connect, Venture North, and SCORE. The goal would be to get entrepreneurs to a successful enough place where they could then expand to a brickand-mortar location. Derenzy said that location didn’t just have to be downtown, but anywhere in the Traverse City area.

DDA board members expressed enthusiasm for the high-traffic location for the incubator, but asked to first tour the space before committing to the lease. Several board members also said they wanted to make sure the DDA had a firm management plan in place for the incubator, such as contracting with a company that could oversee the tenants and day-to-day operations.

The lease contract is expected to return for approval at an upcoming DDA board meeting with a management plan attached. Downtown merchants who sit on the DDA board were optimistic about its potential, with Red Ginger co-owner Pam Marsh saying she loved “the whole concept” and McMillen’s Custom Framing owner Todd McMillen calling it a “wonderful opportunity for entrepreneurship.”