New Jersey Mansion Positioned to Be Model for New Type of Work-Life Development
A developer plans to transform a historic mansion in New Jersey’s largest city into residences for small urban entrepreneurs as well as on-site space for their fledgling businesses, a redevelopment experiment that's sparking interest from cities across the country seeking a different approach to affordable housing and economic revitalization.
Makerhoods, implementing what it calls employee-oriented development, is repurposing a 40-room mansion built in 1888. And on an adjacent lot, it's constructing 66 mixed-income apartments, 10 commercial shops, a shared commercial and demonstration kitchen, a greenhouse and a courtyard event space. So-called micro-entrepreneurs will reside in and operate their businesses from the reimagined property at 601 Dr. Martin Luther King Jr. Boulevard in Newark.
Makerhoods is touting the $30 million project, anchored by the Victorian-era Krueger-Scott Mansion, as unique in the United States at a time when many cities are plagued by a shortage of high-quality affordable housing.
The concept is certainly untested in New Jersey because it is not a traditional coworking space, live-work-play environment or a business incubator. But Avi Telyas, founder and CEO of Makerhoods, said he’s already received inquiries from other U.S. cities about the development. Telyas sees the Newark project as a prototype.
“I wanted to make sure this one works and is on the ground,” he told CoStar News. “And we do also have projects coming up in Paterson [New Jersey], the same model.”
Makerhoods’ main point of distinction is that it will require its tenants to actually reside in the building where they will be running their businesses, mimicking the “live-above-the-store” paradigm, according to Telyas. The owners of businesses in ailing urban areas will get access to affordable housing and have a site for their enterprises, such as light manufacturing. Makerhoods will also provide business-support services for the entrepreneurs at the site.
Telyas, a veteran of Seaview Development, was stymied in his first attempts to create a Makerhoods development in two undisclosed cities, and the effort to get it launched in Newark took five years. At a ground-breaking event Thursday, Telyas credited Newark Mayor Ras Baraka for supporting and driving the project.
Investors got on board after Prudential Financial, which is based in Newark, became involved in Makerhoods, according to Telyas. Now offering financial backing for Makerhoods in addition to Prudential are Wells Fargo, Local Initiatives Support, New Jersey Community Capital, the U.S. Department of Housing and Urban Development, the New Jersey Department of Community Affairs and the city of Newark.
"The capital stack, for those who are interested in that, is pretty phenomenal," a combination of federal, local and private investment, said Allison Ladd, deputy mayor and the city's director of economic and housing development.
“In a first in the nation, our project combines affordable living with affordable working,” Telyas said at the ground-breaking. “For about $1,800 a month ... you can actually run a small manufacturing company and live right above it. You can make anything your heart desires, the [city] code allows it. Cabinets, eyeglasses, dresses, ceramics, hot sauce, whatever your life’s mission calls for, you can do so in the community of other makers backed by the support of the Makerhoods team, who will help you with accounting, marketing, online, all the expertise necessary to run your business.”
The centerpiece of Makerhoods Newark is the Krueger-Scott Mansion, which is listed on the State and National Register of Historic Places. In its new incarnation it will have coworking space, private offices and community-convening spaces. The vacant, blighted red brick building, with its distinctive turrets, is now surrounded by a barbed-wire fence and is an eyesore.
The mansion was built in the late 1890s by Gottfried Krueger, the founder of Newark's Gottfried Krueger Brewing Co. In 1958 Louise Scott, Newark's first Black millionaire, acquired it. She had made her fortune after coming north, from South Carolina and then poor, and launching a beauty business. Scott operated the Scott College of Beauty Culture out of the first floor of the mansion, while keeping the upper levels as her private residence. When she died, the mansion’s ownership passed to the city of Newark.
Baraka lauded Scott for her accomplishments as a Black entrepreneur “who made it in the middle of Jim Crow.” The mayor also applauded Makerhoods’ mission, “this idea of empowering local people to live in the spaces that they work in, to develop entrepreneurs from the ground up, to create working spaces for them.”
Adjacent to the mansion, the new building Makerhoods is constructing will include 66 mixed-income one-, two- and three-bedroom apartments, with 35% of them designated affordable, as well as the 10 commercial shops, which are about 600 square feet each.
The development is expected to be completed in late 2021. Organizers will be accepting applications for 16 “makers” for apartment and commercial space.
Makerhoods, which plans to relocate its headquarters to the repurposed mansion, said it is attempting to address several problems that Black entrepreneurs face. New York City released a survey this summer where Black business owners said their major problems included a lack of access to capital, shortage of experience and resources, difficulty finding customers and not having affordable workspace.
