Startups : Development News

Currently, the most profitable trend for developers is to convert Philadelphia's former industrial behemoths into residential properties. But Shift Capital leaders Brian Murray and Matthew Grande say they're resisting the advice of most brokers with their massive MaKen Studios project on I Street in Kensington. 

"The first thing this area needs is jobs," not more housing, insisted Grande, Shift’s Chief Operating Officer, during an early August presentation to local organizations including Generocity, Campus Philly, Urban Affairs Coalition, PIDC and Flying Kite.

Shift Capital, "a real estate impact group" focused on urban revitalization through "shifts in environmental, social, and economic viability," is finally ready to "start talking to the greater Philadelphia community about what we’re doing," added Founder and Principal Brian Murray.

With a poverty rate nearing 60 percent and a lack of anchor institutions -- such as universities and hospitals -- Kensington relies on the innovation and collaboration of smaller groups like Impact Services CDC and New Kensington CDC.

In Shift’s upcoming MaKen Studios, former industrial space will be available for rent to interdisciplinary artists, small businesses and manufacturers. The project includes two massive buildings in Kensington’s Harrowgate neighborhood at 3525 and 3401 I Street.

Shift purchased the building at 3525 -- dubbed "MaKen North" (home of Jomar Textiles, Inc. until 2010) -- in December 2013 and "MaKen South," the building at 3401 (which includes 8000 square feet of space for the operations and distributions of Snap Kitchen) in February of 2013. The latter building includes 25,000 square feet of south-facing open space, perfect for events overlooking the city.

The former Jomar building will house Shift Capital’s new offices (currently the company operates out of a space on Castor Avenue just south of the Erie-Torresdale stop on the Market-Frankford Line). Prospective tenants already on the docket include a woodworker, a metalworker, a photographer and a small-batch manufacturer. Grande estimates that renovations will be completed in November

Lease terms for the spaces will be flexible, he says -- they could span anywhere from one to ten years. Some makers and companies tour the half-finished spaces and want to sign on right away; others feel that they’d be ready within a few years.

Grande and Murray hope that MaKen Studios will be the perfect spot for a wide range of makers and small businesses, creating much-needed local jobs and taking advantage of the neighborhood’s accessibility to Center City: under twenty minutes on the Market-Frankford Line, and even closer to Fishtown and Northern Liberties.

Writer: Alaina Mabaso
Sources: Brian Murray and Matthew Grande, Shift Capital

In autumn 2014, the former Pearl Arts & Crafts building on South Street got new life as a dance and fitness complex, but the venture was short-lived. Now, a co-working space focused on young and growing companies is set to open in May.

Joynture Work Habitat, which operates under the umbrella of software design and development company EWS, already has one location on Wall Street in New York City; it will open another in Lahore, Pakistan this year.

EWS Vice President of Business Development and Joynture co-founder Kyle Riggle says the company has been looking to expand to Philly for the last year.

"The reason we’re interested in Philly is just because the tech scene here is really starting to come alive," says Riggle. "I think that’s kind of the market we like to go after."

The hunt for a space began in Center City and then moved to Old City without turning up the right spot in terms of size, price, lease length and "a landlord willing to work with the type of business that we want to run," explains Riggle. "That’s not easy to find."

A Northern California native who came to the East Coast to attend Columbia University, Riggle lived in New York City for the past six years before buying a house in Philly’s Point Breeze neighborhood. He was strolling South Street one day late last year with his brother when he saw a sign in the Pearl building window. He met with the owner the next day for a tour.

"It had a lot of character and a lot of potential," he recalls. "Right when I saw it, I knew I could do something cool with it if I could make the numbers work."

The lease for Joynture’s new Philly location was finalized last December.

With the support of EWS, members will have access to a host of technical resources: membership benefits include big discounts from Amazon Web Services, Zipcar, UPS, B & H, and more.

The space will be a mix of private offices available for rent and co-working space. There will be an event area on the first floor and offices on the second. The 9,000-square-foot third floor can be tailored for multiple tenants looking for anything from 500 to 2,000 square feet. Startups interested in getting into the new Joynture space can e-mail [email protected] to get the ball rolling.

Writer: Alaina Mabaso
Source: Kyle Riggle, Joynture Work Habitat
 

Energy-saving systems in large commercial buildings are already commonplace -- albeit expensive to install -- and many single-family homes have power-conserving programmable thermostats. But according to StratIS CEO Felicite Moorman, over 90 percent of homeowners who install those thermostats don’t maximize their savings by actually programming them. 

The East Falls-based StratIS was founded in 2013 as an offshoot of BuLogics, which Moorman also helms. With a focus on multi-family buildings, hotels and campus residences, the energy-saving software company wants to take the intimidation out of programming a greener, more cost-effective usage schedule, and put an easy version of the technology in the hands of owners, managers and their tenants.

“In the last four months, we’ve installed [in] 40,000 apartments," says Moorman; this includes clients in 40 states. The company’s largest single deployment to date is 65,000 wireless devices in 2,700 rooms in Las Vegas’s Wynn Hotel and Casino.

"[It's] an energy efficiency, energy management and energy control app that was specifically created for multi-family and campus communities," she explains. That means a range of wireless devices connected to things like lamps, thermostats, HVAC systems and even door locks that property owners, managers, and residents can control with a simple app.

In the case of individual apartments, renters can use the StratIS technology to customize their at-home power needs. This can be done either on a timed schedule through the app (with residents programming reduced power usage during office hours, for example), or the app can connect to a door lock device which activates a power-down mode synced to the moment a resident steps out the door. You'll never leave a light on again.

Meanwhile, property managers can remotely power up or down any individual unit in the building, as in the case of empty units or an apartment they’re getting ready to show.

Hotel, campus, and multi-family complex owners and managers pay as little as $100 for the installation of a StratIS-enabled thermostat, with a fee of $1 per month per device (this flexible in the case of low-income housing due to the company’s social and environmental mission).

Moorman says the "future-proofed" StratIS system -- meaning the hardware can be easily updated as technology changes or advances -- can save users up to 20 percent on their energy bills. That’s a big selling point since many leases include electricity costs in a flat rental payment.  

Writer: Alaina Mabaso
Source: Felicite Moorman, StratIS

The University City Science Center has embarked on a major expansion that, over the next 10 to 15 years, will add 10 new buildings, remap West Philadelphia and create what Science Center President Stephen S. Tang calls a "community of ingenuity where bright minds can flourish and thrive."
 
The recently announced uCity Square will be a vast mixed-use development featuring residential, lab and office buildings, maker space, retail offerings and green space. The so-called "Innovation District," surrounded by universities, research institutions, hospitals and a concentration of highly skilled workers, will be a magnet for thinkers and doers.
 
Dignitaries including Mayor Michael Nutter gathered last week on the roof of a Market Street parking garage overlooking what was once University City High School. The now-cleared, 14-acre site is at the heart of uCity Square, which will ultimately range roughly from Ludlow Street (just south of Market) north to Lancaster and Powelton Avenues and from 34th to 38th streets.
 
A partnership between the Science Center and Wexford Science + Technology, the megadevelopment will add 10 new buildings totaling four million square feet to the Science Center’s existing 17 buildings, bringing the campus to a total of 6.5 million square feet. The parking garage where the announcement was made, 3665 Market, will be replaced with a new lab and low-rise residential building.
 
The new project will also redraw the map of University City by reintroducing the original street grid. Notably, the long missing-in-action 37th Street will be reinstated from Market to Lancaster and several east-west streets will also be brought back. The idea is to provide easy pedestrian access between communities such as Powelton Village and Mantua to the Science Center and University of Pennsylvania, and from Drexel University to the east. On a larger scale, the new complex will also leverage the continuing westward movement of the city’s commercial heart beyond Center City.
 
"Today, uCity Square is home to the Science Center, our programs, and our vast ecosystem of scientists, entrepreneurs and innovators," enthuses Tang. "Tomorrow, uCity Square will be a true mixed-use community comprised of office and lab space for companies of all sizes, while adding more amenities and services for residents and neighbors to the mix, such as shopping, dining and housing. It will also be a linchpin that connects the neighborhoods to our north and west to the rest of University City."

Writer: Elise Vider
Source: University City Science Center

 

In April, High Point Wholesale, a new branch of Mt. Airy's beloved High Point Café, officially cut the ribbon on its repurposed early-20th-century space at 6700 Germantown Avenue. The building was once home to Mt. Airy's original post office.
 
While it’s born out of the café -- which celebrates its tenth anniversary this year -- High Point Wholesale isn't a retail or restaurant location. It will house office space, a bakery for High Point's signature treats (including a self-contained gluten-free kitchen), coffee roasting and a shipping operation -- something that wasn't possible in the tiny original space. 

"I created High Point Wholesale as a separate business from the café," explains founder by Meg Hagele, a Mt. Airy native. "We recognized we had to raise money. I couldn’t do it on a wing and a prayer."

An initial round of fundraising from investors netted $365,000, and after searching throughout the northwest neighborhoods for a space, renovations began in winter 2014.

But the road was harder than Hagele and her supporters predicted. The site's first contractor proved incapable of handling the job and securing the necessary permits -- High Point Wholesale seemed destined to fail.

They were "emotionally and financially devastated," recalls Hagele. "It was a dark and hard time to get through...There was a real crisis of conscience. Do we walk away?"

She decided to push forward.

"We were so excited and invested in being on Germantown Avenue and being a part of the revitalization of the Mt. Airy corridor," she explains. Hagele jumped into reworking the numbers, and a new round of fundraising amassed close to $200,000.

"All of our investment is 100 percent from customers of the café," Hagele says proudly.

Early this year, a Kickstarter campaign for smaller-scale and more far-flung supporters added almost $40,000 to that total; the funds will go towards final construction costs.

High Point Wholesale now occupies the building's main floor (3,300 square feet); building owner Mt. Airy USA is on the lower level (1,900 square feet).

The site's second contractor had a creative mind -- the space boasts the original basement beams repurposed as windowsills and a partial wall around the offices, lamps salvaged from a 1950s Cincinnati airport, and natural hewn Lancaster County white oak office desks. A National Endowment for Democracy grant administered through Mt. Airy USA helped outfit the space with a specialized electrical system that’s expensive to install, but will save money and energy on the business' commercial ovens down the line.

An April 11 party in the revamped space was expected to draw about 300 people -- the turnout topped 500.

It told Hagele a lot about how her businesses impact the local community.

"They were invested," she muses, "whether or not they were investors."

Writer: Alaina Mabaso
Source: Meg Hagele, High Point Wholesale  

Temple University alum Ariell Johnson first started to imagine opening her dream business when the independent coffee shop across from her favorite comic book store closed down. That was over a decade ago, before she graduated in 2005 with a degree in accounting.

As a self-described "geeky" woman of color who loves comics, Johnson says she’s a rare breed. She got serious about opening Amalgam Comics & Coffeehouse, her coffee shop/comic book store/community arts hub, in the last few years. She looked in a few different neighborhoods for the perfect spot, including Lancaster Avenue in West Philly and South Philly’s Point Breeze, before finding her 3,000-foot space at the corner of Frankford Avenue and Huntingdon Street.

Frankford's burgeoning arts corridor and mixed neighborhood demographic -- families, single young professionals, recent college grads, artists -- convinced Johnson it was the right place for Amalgam. And among a lot of "fun quirky little shops," tattoo parlors and galleries on the avenue, there still aren't any comic book stores.

"For what I’m doing, I thought it would be a great fit here," she explains.

Amalgam’s future home is a mixed-use building with apartments attached to a commercial space. Johnson says the latter has been standing empty for over ten years. Its history is unclear, but some of the leftover equipment they’ve found, along with an old painting abandoned there, hint that it had another life as an Italian restaurant. 

"We’re in the process of getting renovations done," notes Johnson. "The space is not nearly finished."

To that end, she’s running a crowdfunding campaign through March 3 with a basic goal of raising $5,000 and a dream goal of $30,000, which will help cover renovation of the plumbing, electrical and HVAC systems, as well as installing Amalgam’s coffee bar and kitchen. (If Amalgam can meet that crucial $5,000 goal, it’ll be guaranteed to receive those funds, plus any money raised beyond that.) 

Ultimately, Johnson, a Maryland native who now lives just one street away from her shop, will draw on a range of professional experience to make Amalgam a reality: her business and accounting know-how, a history in retail, and even experience as a barista and self-taught chef. The space will be a haven for comic-book lovers and the wider community, with places for browsing, sipping and snacking as well as conversation, book signings, film screenings and other events.

Johnson will carry industry staples like X-Men and The Flash, but is particularly dedicated to showcasing comics featuring women and people of color after years of being an ardent fan, but rarely seeing anyone who looked like her in the pages she loved.

"Not seeing yourself reflected in different forms of media is damaging," she explains, especially for children. "I want to actively fight against that."

Because of the variables of construction, Johnson says it’s too soon to know an exact date for Amalgam’s grand opening, but she hopes to have it up and running as soon as late spring.

Writer: Alaina Mabaso
Source: Ariell Johnson, Amalgam Comics & Coffeehouse
 

You want to buy a house. Besides your agent and a pre-approval on a mortgage, where do you start? It’s easy to get a comprehensive look at what’s available for sale through multiple listing services (MLS) like Trulia or TREND, filtered by categories such as location, property type and price. But what if you want to rent an apartment?

In Philly, you’re often doomed to crowdsourcing your social networks, hoping a friend of a friend has space to rent, or wading through the swamps of a website like Craigslist, whose listings, once posted, can’t be updated and can get buried in a matter of minutes.

Ishay Grinberg, the founder and CEO of Boston-based Rental Beast, calls the rental status quo in Philly "a nightmare," and he wants to change that. His site is an MLS for rentals, and it’s ready to put about one million listings at prospective renters’ fingertips through its network of hyper-local real estate experts.

"About forty percent of the population rents, and about forty percent of the population will continue to rent," explains Grinberg, acknowledging the boom in home-ownership that peaked in 2005  -- and, well, we all know what happened next.

"Almost everywhere you look if you drive around, you start seeing ‘for rent’ signs," he says of Philly, where a Rental Beast team is already set up in Center City, readying an official launch for early 2015. "There’s plenty of demand to be satisfied."

Rental Beast works for renters as well as landlords and property managers, from those handling just a few properties to those handling thousands. In less than five years, the company has seen huge success in Boston, nabbing 70 percent of the city’s market share. Now its sights are set on Philly, its suburbs and the surrounding area, including central Pennsylvania, and parts of Delaware and New Jersey.

"We’re completely free for landlords of any size to list with us," insists Grinberg.

That free-of-charge model for both landlords and prospective tenants is supported by large brokerages who partner with the company for access to its inventory, and provide a portion of the broker fee when a property is leased through the site.

But the service isn’t just about aggregating and maintaining the most up-to-date, customizable info from landlords, managers, brokers, neighborhood experts and wider market data. Users also have access to tools for everything from proper pricing to drawing up the lease to finding contractors for when there’s quick turnover on a unit.

"When small landlords have a unit turn over, they don’t have an armada of maintenance people like the large managers do," explains Grinberg. For jobs like cleaning, sanding or painting, Rental Beast maintains a free database of vetted service providers.

Philly’s "good startup community" is part of the reason he’s bringing Rental Beast to the area. With the growing trend of millennials staying in the city to work or launch their own ventures after graduation, he insists it’s the perfect time to simplify the rental market.

Writer: Alaina Mabaso
Source: Ishay Grinberg
 

Most of us can use a computer application -- from Facebook, to an insurance exchange to a data store for a research project -- without thinking about the servers where all that information actually lives. Right now, all of the U.S.’s advanced data centers (ADCs) operate from Florida or locations in the Southwest. Keystone NAP wants to change all that by opening the Northeast’s first ADC in Pennsylvania's own Fairless Hills.

Currently, the major metros in the Northeast -- New York, Boston, Philadelphia -- have what Keystone NAP founder and CEO Peter Ritz calls "plain old data centers," which were adequate as recently as the 1990s, but in today’s web-scale world can't cut it.

"In the last two years, we have created more data, more bits of data…than all the time before that," explains Ritz. He compares today’s old data centers to telephone landlines: adequate for doing business ten or fifteen years ago, but rapidly growing obsolete.

The servers at those centers don’t have the capacity and scalability that today’s up-and-coming tech giants (and local mid-sized businesses) need, and with a single connection to a traditional power grid, they’re vulnerable.

Remember Hurricane Sandy?

"People don’t think about it, but what happened there is that people had a single source of connection to the grid in their data center," he says of widespread computer system outages after the storm. "They had to pray and they had to beg to make sure they would get the diesel fuel delivery."

Keystone NAP's ADC will have the data service capacity to house the equivalent of eight Googles. It's special not just because of its location and its data capacity, but because of its innovative approach to power.

"It’s the steel-forging shoulders that we stand on," says Ritz of how the region’s historical infrastructure makes this possible. Instead of a single connection to the power grid, the Keystone NAP facility will operate with the help of five distinct power sources, including gas turbines and a nearby trash-to-steam plant burning refuse from a local landfill.

Ritz describes the individual servers as looking like rectangular pizza boxes, stacked as many as forty high in specialized shelving. It all generates enormous heat: fifty percent of any data center’s energy budget goes to cooling those servers with air or water-based systems.

Because not every business's server has the same energy needs, Keystone NAP is offering a uniquely secure and modular approach to power dubbed KeyBlocks. It’s common for a data center to host multiple entities’ servers, but bringing that eco-friendly customization to the powering of the diverse servers is another thing that sets the facility apart.

Writer: Alaina Mabaso
Source: Peter Ritz, Keystone NAP
 

Temple film school grad Dan Creskoff might be best known for his eighteen-year stint as a manager of two TLA Video locations.

"People would come to TLA and hang out for an hour," he recalls, "and just talk about movies."

Creskoff came to cherish the relationships he formed there.

It wasn’t long after the closing of TLA's brick-and-mortar stores that the cinefile began running into some of his old customers around town. The resulting conversations made Creskoff realize that there was a need for that sort of shared space. With that in mind, he began working on his new business, CineMug.

CineMug, a cafe that will also contain a DVD rental shop and function as quasi-clubhouse for film lovers, is due to open at 1607 S. Broad Street sometime later this fall. The roughly 800-square-foot cafe -- formerly a wireless phone shop turned doctor’s office -- will operate seven days a week. CineMug will also host weekly movie screenings.

Buildout is nearly complete. Creskoff describes the space as "having that living room vibe of hanging out with people you like and talking about things that interest you." Custom reclaimed wood countertops will give the cafe a casual and inviting feel, he adds.

In addition to a carefully curated collection of DVDs that will also be available for online and mobile perusing -- think must-see classics, cult films, documentaries, and plenty of arthouse and indie features -- CineMug will be serving up Fishtown’s ReAnimator Coffee alongside its own housemade chai and iced tea.

Cafe staples like bagels, spreads, pastries and baked goods will also be available, and the full CineMug menu will feature signature dips and sandwiches from South Philly favorite Cosmi's Deli.

Writer: Dan Eldridge
Source: Dan Creskoff, CineMug 
 

On Wednesday, October 15, University City District (UCD) will present its annual State of University City report to a select group of representatives from neighborhood institutions, real estate development groups, small business owners and residents.

In over 70 pages worth of eye-catching charts, graphs and text, the report tells the story of a vibrant and growing submarket that continues to attract a steady stream of educated individuals, innovative startups, creative entrepreneurs and civic-minded businesses.

Some highlights of this year’s report include an explosion of multi-family residential development, an unprecedented 96 percent office occupancy rate, a growing interest in transportation and transit, investment by the University of Pennsylvania in both research facilities and community placemaking destinations, and significant growth in Drexel’s innovation neighborhood near 30th Street Station.

The report also expands on the development plans for the 40th Street Trolley Portal, including the success of UCD fundraising efforts to create a pedestrian-friendly park there.

To create the document, policy and research manager Seth Budick compiles vast amounts of data from UCD’s institutional and business partners, alongside its own in-depth studies and analysis of pedestrian counts, retail occupancy and public space usage.

"What we’re really seeing is a flocking of people and businesses who recognize the value of being close to the density of innovation that’s going on in University City," he explains.

As in previous years, printed reports will be distributed to institutional partners, real estate professionals, local organizations, government representatives and residents, who, according to UCD's Lori Brennan, "use [it] as a recruitment tool for filling office vacancies, and attracting retailers and restaurateurs to open up spaces [in University City]."

The report will be available online on October 16.

Writer: Dan Eldridge
Sources: Seth Budick and Lori Klein Brennan, University City District