Michael Forsyth is program manager for the Detroit Economic Growth Corp. Below, he writes about Motor City Match, an initiative to pair entrepreneurs with vacant properties and financial capital, which Knight Foundation supports.

How does a city attract businesses and fill vacant buildings at the same time?

It plays matchmaker.

Detroit’s Motor City Match program connects new and expanding businesses with quality real estate opportunities, providing them with funding and tools to fuel the city’s growing entrepreneurial movement. Motor City Match is an initiative of the Detroit Economic Growth Corp. and the city of Detroit, which is supported by Knight Foundation.

Starting a business always has its challenges. Our work with Detroit entrepreneurs has consistently shown two common themes that Motor City Match aims to address.

·       First, entrepreneurs have trouble finding the right space to open their business in Detroit. This issue is largely due to a lack of readily accessible information which is further compounded by disconnected networks of brokers, building owners and businesses.

·       Second, Detroit’s entrepreneurs lack the capital to open their businesses, but they also face additional hurdles due to the poor condition of the building stock in Detroit. In nearly all instances, prospective tenants are expected to invest in renovations. Increased capital requirements for building renovations, plus business startup, combined with the risk and uncertainty of a challenged urban environment, create major barriers to capital access and underwriting for local lenders.

Motor City Match addresses these needs by matching potential tenants with potential property owners. We’ll publish content-rich maps that present real estate opportunities, while helping connect building and business owners. To help fill the financial gap we’ll provide counseling, technical assistance resources and $500,000 in competitive grants per quarter. We’re also teaming with six local lenders to facilitate small business and construction financing.

Scaling a concept and the Berlin connection

This citywide program was preceded by another Detroit Economic Growth Corp. program called REVOLVE Detroit. It has ushered in pop-up businesses, outdoor markets and large-scale art installations in the West Village and Avenue of Fashion neighborhoods in Detroit. Overall, REVOLVE has started 11 permanent businesses, completed 25 pop-ups and 20 art installations over two years. REVOLVE’s model uses a competitive process to find the best ideas for vacant space and then plays matchmaker to make projects a reality.

REVOLVE, and thus Motor City Match, was inspired by my studies of urban innovators and temporary use in Berlin. There are many parallels between the two cities; 10 years after the wall fell, Berlin was nearly bankrupt. While the city had steady investment downtown, its neighborhoods suffered from severe commercial vacancy due to a shrinking population and a changing economy.

Berlin has an ingredient that Detroit has never been short on: creative risk-takers. These creative risk-takers, or “agents” as we called them in Berlin, were short on capital, but not on ideas. To solve the vacancy problem, policymakers encouraged temporary use of vacant space to create opportunities to reimagine its potential. Entrepreneurs transformed vacant spaces into markets, performance venues, gardens and gathering spaces. Open-air, temporary restaurants opened where enterprising chefs could test their cuisine without the cost of building a restaurant and kitchen. Biergartens or “beach bars” took the place of former riverside industrial sites, using profits to help fund site remediation and reintroducing people to a once-forgotten place. Temporary uses allowed for experimentation within a low-cost, low-risk environment, which validated market viability and often led to permanent uses that were an asset to the neighborhoods.

We tested and implemented these practices in Detroit with REVOLVE. Today with Motor City Match, we’ve scaled our investment in entrepreneurship at a critical time in our city’s history. Detroit was built on the enterprising spirit and ingenuity of the industrial revolution. Today, there is a new entrepreneurial revolution in Detroit, and we aim to help aspiring entrepreneurs shape the future of a great American city in the process.

Making the match

The first round of applications for building owners closed on May 1 with applications from more than 150 commercial property owners. These properties total more than 1.7 million square feet of commercial space along some of Detroit’s key corridors, creating opportunities throughout the city.

Once we determine final eligibility and complete property inspections, we will post a map of program-eligible properties and begin the matchmaking. Entrepreneurs may apply for the first round of the program until July 1. There are a few more application periods open for 2015:

• Building Owner Round 2: Aug. 1 to Sept. 1
• Business Owner Round 2: Sept. 1 to Oct. 1
• Business Owner Round 3: Dec. 1 to Jan. 1

Resurgent Detroit

If Detroit’s next great entrepreneur is to come from the neighborhoods, programs that address funding and location issues for highly creative enterprises are critical. Knight Foundation’s three-year pledge to support this program is a testament to the lengths our community partners are willing to go to ensure Detroit entrepreneurs have that opportunity.

We have already seen some great business ideas and met some amazing entrepreneurs, and with the help of Knight Foundation and other funders, we are excited to see their dreams realized.