Makers and small-scale manufacturers can play a key role in revitalizing a city, but there are challenges that must be overcome, according to panelists speaking at the 2018 ULI Spring Meeting in Detroit.

Creating functional spaces for makers requires “patient capital” and landlords willing to see maker space development as a “long-term play,” said Abir Ali, director of design and culture at the Platform, a Detroit-based real estate developer who is also a principal at Ali Sandifer, a handcrafted furniture maker.

It is a myth to say that a glut of space is available in cities like Detroit for young, small-scale manufacturers, according to the panelists in the session, which was moderated by Pamela Lewis, director of the New Economy Initiative (NEI), a group supporting entrepreneurs.

Spring Meeting Resources: Download the presentation

“There are maker spaces, but they are expensive and hard to get to,” said April Jones-Boyle, founder and executive director of the Build Institute, a group focused on providing entrepreneurs with tools, resources, and support.

Brenna Lane, co-owner of Detroit Denim Company, a jeans manufacturing and retail operation, said she spent three years looking for space for her growing business. “Either it was totally done out and $20 a square foot or it was a gray basement and dismal,” Lane said.

Makers, the creators of anything from furniture and art to candles and cookies, require very special spaces if they are to to thrive, the panelists agreed. They tend to be small, often with only two or three employees. More than 60 percent gross less than $50,000 per year and the majority work at other jobs as well, according to a 2018 study by Urban Manufacturers Alliance presented by Lewis.

Space, capital, and talent are the key challenges for makers, the study found. They need flexible spaces, they like to be around other creative types, and they benefit from having room to grow, panelists said.

“The ability to have scalable space is really essential,” Lane said.

But, more than anything, makers require bottom-level rents, especially in the early stages of their endeavors. They do not need amenities or frills. Many spaces are “not suitable for people who need it to be dirt cheap,” Ali noted.

Lane’s company started in a nonprofit facility in Detroit called Ponyride, which was specifically created to help facilitate makers and artists. Rents were often as low as $2 to $3 a square foot ($21.53 to $32.29 per sq m), panelists said.

“Space was cheap enough that we could make mistakes,” Lane said.

Most Detroit building owners will not be interested in rents less than $10 a square foot [$107.64 per sq m], Ali acknowledged. She said there is a need for spaces with rents between $10 and $20 a square foot ($107.64 to $215.28 per sq m), for companies in the “mid-range of growth.” Her company bought Detroit’s historic Fisher Building in 2015 and has been experimenting with different types of spaces for creatives and artists.

“Production spaces, retail spaces, and creative spaces—we’re trying to understand the nuances,” Ali said.

Many building owners lump maker spaces into the same bucket as “lofts for hipsters,” Lane said. “You still need manufacturing space if you’re going to have a diversified economy,” she said.

There is “pent-up demand” for maker spaces, Jones-Boyle said. “Maker needs are different, depending on where they are in the life cycle,” she said. “We’re trying to widen the net and give people the opportunity to find other resources.”

Capital is usually the key missing ingredient for makers, panelists said. “We have to have a layered approach to financing,” Jones-Boyle said. “Sometimes, they only need a few thousand dollars at the very beginning.”

While makers may be creating only a few jobs, small businesses are a cornerstone to a growing economy, providing training and a base for new entrepreneurs, the panelists emphasized. While they are often relegated to industrial zones, makers can play a key role in the live/work/play communities developing in cities around the country.

“These firms are small, but they’re impactful,” Lane said. In the long term, they can help raise values and create the type of neighborhoods that are in demand.

“Let makers do what they do, which is improve spaces,” she said.

Build Institute In Action from Build Institute on Vimeo.