A downtown program that helps small businesses open brick-and-mortar stores is looking to expand into the office market this fall, a step to help fill empty office spaces in Dayton.
The Downtown Dayton Partnership has operated its pop-up shop program since 2011, during which it has helped retailers launch businesses in downtown stores through collaboration with building owners to offer lower rents and shorter three- to six-month leases.
A total of 26 pop-ups have opened, and 17 stayed open longer than their initial pop-up period, said Jen Cadieux, manager of the pop-up project for the Downtown Dayton Partnership. Thirteen of the shops are still open today, including two in the first round of start-ups, Beaute Box and Peace on Fifth.
Now the partnership will take the same cheaper rent and shorter lease model to fill downtown office space and expand beyond retail businesses into offices.
“Because it has been so successful and we have so much office product available, maybe we can start changing that conversation, that some of these towers are cool spaces and people should and want to open their office business in one of the towers,” Cadieux said.
Dayton's central business district has one of the highest office vacancy rates of the major metros in the country at almost 26 percent, according to a 2018 report by Colliers International. The city traditionally has lost talent to the suburbs as buildings downtown become outdated, and investors are hesitant to renovate spaces because of rising construction costs that would only attract small businesses with relatively few employees.
“Businesses want to move to the urban core because in looking to hire young professionals, that’s where they want to be, that makes a business more attractive,” Cadieux said.
Officials say the pop-up shop program is a win-win-win: business owners get to test their store concepts or expansion into an office without heavy investment, property owners have an avenue to lease unused space that otherwise would secure no income and downtown Dayton becomes more attractive with fewer empty storefronts and office spaces. The goal is for the pop-ups to do so well that they will decide to open a permanent location downtown.
The program accepts applications twice a year, during the spring and the fall. Both of the application periods have been retail-focused to date, and this year the program will shift to retail approvals in the spring and office approvals in the fall.
Each installment has the capacity to launch between one and three new businesses, depending on how many applicants fit the available spaces and are ready to make the move to brick-and-mortar. The office program could have an added benefit of some sort of professional service.
“We know there is some interest because we have had some office users, creative service firms typically, apply and become a pop-up shop. Even though they’re not retail or a restaurant, they want the first-floor exposure,” she said.
Those applicants will be technology and creative service companies “that are ready for some growth, maybe hire a couple of people, not working in their house or in coffee shops or want more of a place where their team can come every day and work,” Cadieux said.
There will likely be more announcements in the next few weeks about applications opening for potential businesses looking to launch office space downtown, she said.
The retail side of the program has utilized more than 25,000 square feet of previously vacant first-floor space and created 43 jobs during the last seven years. Since the program launched, 80,000 square feet of space has been filled collectively downtown.
“It slowly starts to grow, and they see small businesses down here that are successful, and so other people want to be a part of it whether its through the pop-up program or just opening their business downtown,” Cadieux said.
About 15 to 20 potential businesses apply each phase. The newest of the pop-ups, Picture Perfect Paint Parties, opened Aug. 8, and a second hasn’t been announced as leases are negotiated.
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While Picture Perfect Paint Parties signed a longer one-year lease because it already had a clientele, owner Dana Calhoun said she wouldn’t have been as fortunate in opening a physical location without the help of the partnership’s pop-up program. Her 1,700-square-foot space in the Talbott Tower is a lot larger and in a much more convenient location than she could have attained on her own, she said.
“Because of the pop-up program, we kind of feel like they’re big brother,” she said. “They’re walking us through this, and they want to make sure, as much as they can, that the small businesses are successful.”
The program, in which the Downtown Dayton Partnership invests about $5,000 to each year, was created in response to the Greater Downtown Dayton Plan, which put a focus on activating first-floor spaces downtown.
“When you’re walking down the street and you see dark vacant spaces, that just doesn’t feel good, it doesn’t make you want to be around,” Cadieux said.
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