411 makerspace: giving artists & makers a stake in the Edge

The 411 makerspace: giving artists & makers a stake in the Edge

Placemaking, to the max.

Ideal location 407 - 411 MONROE includes parking / outdoor area, new roof, sprinkler system, easy-ready office for anchor tenant, ample exhibition & event space.

Timing/budget/plan will vary according to assigned property.

The 411 is affordable studio, gallery, creative and makerspace aiming to give artists a stake in the Edge by collectively owning a piece of it. Modeled after the NY Real Estate Investment

Cooperative, the ownership campaign is launched by membership and crowd-sourcing. The project is launched with an arts grant used as seed money with a promised return on investment including increased occupancy, creativity, and community art actions and events.

The business structure is ownership by a 501c3 arts organization OR B-corp (under review & pending consultation) dedicated to maintaining rent stabilized affordable studio, exhibition and creative space for makers and artists of all kinds. Occupancy policies favor diversity of media to maximize inter-disciplinary cross-pollination.

The tenancy is structured “lease-to-own” for the first 5 years, where the organization completes the purchase within the 5 years, securing a stake for artists in the Edge as it moves into an era of increasing development. The 411 is placemaking, to the max.

While researching the results from Memfix, I was stunned by the number of affordable commercial properties for sale or lease in the Edge. Since Memfix, most of those properties are under contract. All the same throughout Collabortory research I was repeatedly reminded of the blight of vacant properties. I investigated multiple properties in the neighborhood, re-imagining how they could be transformed or appropriated artistically. Most conversations with Edge residents led to concerns of maintenance, upkeep, vacancy, & safety. I heard multiple stories of (in some cases extremely) raised rents in the past 6 months, and scarcity of affordable space for creatives (Marshall Arts has a constant waitlist). This proposal responds to those needs, and also addresses the request to encourage pedestrian traffic up Monroe instead of Union. The site has visibility from Union via the rooftop, so an iconic symbol could provide a visual cue to beckon Union walkers to a new destination along their route via Monroe.. During our research I was introduced to the working concept of Caroline Woolard in New York to give artists a stake in the rapidly changing economic landscape. I was inspired. We have watched the market change in Memphis rapidly and dramatically, and the best way to ensure art will exist in an area and continue to benefit an area, is to make a sustainable space for it.

• materials to be used:

Nearly 17,000 sq ft. + outdoor space + an incredible creative team with unbelievable timing. Creative partners include the seed sponsor (Downtown Memphis Commission), the current property owner, anchor tenant occupying the unique Monroe frontage finished office space (2 possibilties already lined up), a strategically balanced board of directors for The 411, and experienced gallery / studio creative power duo Corkey Sinks & Jesse Butcher to run the non- profit studio rental business as well as a curated exchange-focused gallery.

Possible additional partners include an established local arts non-profit, existing local arts cooperative gallery, a computer maker/repair lab and local makers club, innovators, designers, and community builders. 14,000 square feet of space provides for these reduced-cost working offices & studios / maker space and shared use spaces for installation, collaboration, performance & events.

• basic timeline that includes the following; fabrication, installation, duration of work, and de-installation (if applicable).

Grants Awarded October 2015. Use October to establish (LLC) business entity or B corp for master lessor, engage board members & support of contracts, and apply for 501(c)3 status. Finalize negotiations with contracts (property, partners, insurance etc.) before Thanksgiving. Take possession of property by December 1 and prepare for anchor tenant move-in January 1, 2016. [Repairs & Improvements phase 1]. Prepare space for (computer maker/repair) tenant immediately following [Repairs & Improvements phase 2], and begin readying studio and gallery space for occupancy no later than March 1 [Repairs & Improvements phase 3]. A soft launch event in March marks first exhibition and readiness of marketing materials. The art spaces begin to fill while the board shifts attention to the structural shift, membership & crowdsourcing model, with the goal of completing the purchase as Real Estate cooperative or held by the non- profit with 5 years established equity, within the existing lease period.

Repairs & Improvements phase 1: Remove housing surrounding the central sprinkler system to create a unique and dynamic conference room. Any necessary repairs to sheetrock, lighting, floors, paint, internet, phone in office area. Double check security & utility systems.

Repairs & Improvements phase 2: Clear & Build out simple space to spec (500-800 sq ft) for 2nd sublessor (computer maker/repair lab)

Repairs & Improvements phase 3: Upstairs Floor repair, ceiling repair. Winter climate test.

Physical maintenance will be the responsibility of the master lessor (The411,LLC. for example)

BUDGET ESTIMATE:

Artist Fees:

Build the teams & tenants 1000, develop the board 1000, 6 months (PT) production management 6000

$8000

Engineering & Consultant Fees: Structural, mechanical, electrical, etc. as needed to develop proposal.

Business structure consultation 500, Legal 1500 (possibly pro bono)

$2000

Rent-to-own Mortgage Monies towards purchase (SEED MONEY)

4500/month for the first 2 months, 3500 for the following 4 months

$23,000

Necessary Improvements: Structural etc. phase 1: 800, phase 2: 600, phase 3: 8000

$9,400

Staff: 6 months Production team (studio & gallery build out & operations) 2 people

$24,000

Additional anticipated monthly costs (for the first 6 months) Utilities, phone, internet, security

$6,000

The in-case-we-need-to-replace-a-heater contingency: Industrial Space Heater

$4,000

Total Budget: $76,400

Additional Notes on the proposed business model: A five year lease at $4500/month totals $270,000. Ask price is $425K – for this model I set $400K for the purchase price with the negotiation in place for lease-to-own. Seller/owner is open to this discussion. For the sake of this model, owner applies 50% monthly rent payment towards down payment of 20% pp. 80K is 20% of purchase price (pp), increased to $100K as incentive for seller to carry the contract. SO between 18 months and 2 years we have acquired the option to buy, with a much smaller debt / mortgage to support. ($300K)

That’s the premise.

Here is a simplified example of monthly cashflow during rental period & after purchase. Staff costs are under review. It is assumed that staff are also paid by having studio/gallery space, to be calculated and contracted.

out

-4500/mo rent -1000/mo utilities (water, electric, wifi, security) -1500/mo staff support 7000/mo OPERATING COST

in (fluctuates as we tenant, etc) +3000/mo anchor tenant/sublessee +1000/mo 2nd tenant/sublessee +1250/mo +250 (&up)/mo per studio tenant (start with 5) *model will be developed for per square foot pricing +1000/mo front gallery tenant. would require additional improvements.

6250/mo OPERATING INCOME* *subsidized by seed money / GRANT

After 2 years or when ownership is assumed:

out

-500/mo insurance -15/mo sprinkler fee -718/mo taxes [based on current rate: $8616 annually in taxes, likely wrapped into mortgage payments] -2000/mo mortgage on remaining 300K [based on a 30year at 4.5%, which is seriously optimistic] 3233/mo OPERATING COST

in

+3000/mo anchor tenant/sublessee +1000/mo 2nd tenant/sublessee +3500/mo +250 (&up)/mo per studio tenant (now we have 14) +1000/mo front gallery tenant or event rentals 8500/mo OPERATING INCOME

As a non-profit the organization is also eligible for grants as available for additional support or improvements. I think it provides for a business model with a healthy growth / emergency-fund-building margin.

Section 3 : Artist Information

Lead Artists name: r salant Email: robin@rsalant.com Address: 1910 madison avenue #33 memphis tn 38104-2620

Please list the name, email, address and phone number of any additional artists assisting on this project below.

Corkey Sinks corkey.sinks@gmail.com Jesse Butcher jessebutcher@gmail.com

A unique opportunity to manifest a sustainable and diverse creative fulcrum in the Edge.