The Krueger-Scott mansion in Newark, New Jersey has a long history of immigrant and African American entrepreneurship. The house with 40 rooms was built in 1888 for the German immigrant Gottfried Krueger, who made his fortune brewing beer. In 1958, Louise Scott bought it to run a beauty school on the lower floors while living in the rooms above. She is considered the first African American millionaire in New Jersey.
When Scott died in 1982, the imposing mansion overran town and fell in significant non-use and dilapidation. Until that September, when Newark Mayor Ras Baraka took a groundbreaking move to transform the property into an innovative commercial and housing development that would provide Newark entrepreneurs with limited resources with access to affordable housing, office space and business support.
When the mansion reopens in 2021, it will be listed as a Makerhood, a term coined by Avi Telyas, a migrant entrepreneur and real estate developer. Telyas worked with the city for five years to refine a model for housing and economic development that he believes can be carried over to other cities.
“The way we plan and build our cities – the very urban fabric and built environment we have – is too much of a challenge for many people. Renting just a small space is very unaffordable,” says Telyas. “I was thinking about re-creating the Lower East Side that we once had, a model that lives above the store and where more people could try entrepreneurship if the barriers were lowered.”
Telyas presented its vision of “employment-oriented development” (a play-off for transit-oriented development) in a TedXJerseyCity interview in 2015. His idea was a development that offers affordable living space as well as affordable office and light-weight manufacturing space as well as support and resources for residents to expand their business. The plan was to pilot the model in Jersey City, but after raids, he turned to Newark.
The idea received early support from Aisha Glover, then President and CEO of the Newark Community Economic Development Corporation. She previously worked for the Brooklyn Navy Yard, which provides flexible space for small, artisanal businesses. The Makerhood suggestion “reminded me of some of the stores in the Brooklyn Navy Yard, that artisanal atmosphere in small quantities,” she says. “But I think there is a lot of misunderstanding about what this means for access to black and brown people and for quality jobs.”
The goal in Newark was to support low-income minority makers and small business owners through the Makerhood Model. The Krueger-Scott mansion seemed a perfect fit, says Glover: “The legacy of black entrepreneurship was alive and well in this building.”
In 2015 the city signed a redevelopment agreement with Telyas. He then worked with city officials on a complicated funding, zoning, and approval process that spanned five years before the deal was closed that year. “When we had our closing talks with various investors and lenders, we were talking to 31 lawyers,” he notes. “That’s how complex it is to develop a unique project in the city center.”
The funding model, which comprised 60 pages of spreadsheet, included funds from local investments in support of communities, the United States Department of Housing and Urban Development, New Jersey Community Capital, Wells Fargo Bank, Prudential Life Insurance Company, and the City of Newark and Telyas herself. According to Telyas, new market tax credits were used to “fill the funding gap”.
Zoning was another challenge. Telyas proposed a unique zoning model called Makers Zoning, which was ultimately adopted by the city. It made residential apartments possible on light production areas. It included the requirement that people renting the office and production space must live in the building. “It’s the most controversial part of this zoning,” he notes. “But I didn’t want a rich person living in a high net worth zip code to come to Newark every day and pull that income back into their community.”
Telyas started a second company, Makerhoods Inc., which he self-financed to support the existing maker community in Newark and to continue to support the makers chosen to live and work in the mansion. (The company also launched a digital Makerhood’s Market platform for Newark business owners amid COVID-19.) “We realize that cheap space is not enough,” he says. “You really have to help people with their business.”
SaVonne Anderson, founder of Aya Paper Co. has reached out to Makerhoods for advice on their business goals, bookkeeping, and sales tracking. (She’s not sure if she’s going to apply to Makerhoods for an apartment and a job.) “We had our first meeting when I was planning to leave my job to do this full-time,” says Anderson. “They helped me prepare before I left and helped me keep business going since I got it.”
Anderson points out that Newark’s creative community thrived long before Makerhoods arrived – but she appreciates that the company created a new environment for local entrepreneurs to socialize. She adds that there is a demand for affordable housing and office space, especially in close proximity to each other. “With gentrification, often the place you work is not the place you can afford to live,” she says.
Telyas sees this community building work as critical to the development of Makerhood – and as a way to identify potential future tenants. Makerhoods Newark this month published application criteria for the 16 manufacturers who will receive an apartment, commercial space and business support from USD 1,800 per month, depending on income and apartment size.
The overall development, which includes the restoration of the manor house and the construction of new residential and commercial space, includes 66 apartments with mixed income, 10 commercial businesses, a common commercial and demonstration kitchen, a greenhouse and event rooms in the courtyard. According to Telyas, the kitchen will accommodate another six “makers”.
Makers Zoning was launched in Patterson, New Jersey, where Telyas is hoping to open a second development. His hope for expansion is to partner with other real estate developers who can recreate the same model in their local market. “We bring our maker development to the table and have a scalable national solution,” he says.
Emily Nonko is a Brooklyn, New York-based reporter who writes on real estate, architecture, urban development, and design. Her work has been published in the Wall Street Journal, New York Magazine, Curbed, and other publications.