To help entrepreneurs get on their feet, New York City’s Economic Development Corporation plans to open more business incubators like the one at 160 Varick Street in Lower Manhattan. The EDC is looking for commercial landlords willing to donate office space for the incubators.
Industries such as food manufacturing, fashion, Web-based technology and architecture could be served by the new program, the EDC said.
The agency is seeking building owners who can provide 5,000 to 20,000 square feet of office space for free or for no more than $10 a square foot, though landlords demanding higher rents can still submit proposals.
Landlords have until July 29 to respond to a request for expressions of interest issued by the EDC. For property owners, the EDC notes the benefits include cultivating relationships with small businesses who eventually could become market-rate tenants, building good will in the business community and attracting favorable media coverage.
However, lining up landlords may not be a slam dunk. The city and Polytechnic Institute had an agreement with the Moinian Group to open an incubator big enough for 100 people at 90 John Street in the Financial District. But the center, which was supposed to open in April, still hasn’t. The site is “an ideally suited and equipped space,” said Oskar Brecher, development director for the Moinian Group, which owns the building. “Both sides have invested serious time and effort to negotiate a transaction, and we are ready to finalize a deal.”
That location is undecided, said EDC spokesperson Janel Patterson.
Another issue is finding office space in move-in condition.
“Even when space is abundant, built-out space ready for occupancy that doesn’t require a significant investment is not in large supply,” said Carl Weisbrod, president of Trinity Real Estate, which is providing the incubator space at 160 Varick Street for three years.
In addition to making plans for incubators, the EDC has been working with providers of fully furnished temporary office centers to make their spaces more affordable to entrepreneurs. The companies have slashed their rates — some by as much as 50 percent — to attract start-ups. One provider who has worked closely with the EDC on the initiative, Cheni Yerushalmi, thinks it’s unrealistic for the city to expect landlords to donate their offices for incubator programs that tie up the space for years. Most landlords can’t afford to do that, he said.
“For a business person, it’s not attractive,” said Yerushalmi, managing partner and one of the founders of Sunshine Suites, which has shared workspace available at 419 Lafayette Street and 12 Debrosses Street.
Regarding Trinity’s decision to provide incubator space to the city for three years, Yerushalmi said: “Who wants to give up the space for three years unless you’re a company” that can afford to lose the revenue? “To give it away is like throwing in the towel.”