Light manufacturing is breathing new life into a North Nevada Avenue building, transforming it into a hub for like-minded tenants.
“What we will have once we are built out are about eight spaces for smaller manufacturing companies to lease,” said Jen Taylor, who oversees marketing and strategic partnerships for the for-profit development company Milestones for Growth. “The reason for below-market-value rent is because one of the main purposes of this project is to keep manufacturing in Colorado Springs and to grow businesses here.”
Mary and Tony Fagnant, the owners of Colorado Springs-based Qualtek Manufacturing Inc., a metal manufacturing company, are renovating the former SRC Computers location at 4240 N. Nevada Ave. and will lease space to smaller manufacturers. It will be managed by Milestones for Growth, which the Fagnants founded this summer.
“They are not in this to make a bunch of money on this building,” Taylor said. “A typical developer would want to buy the building and get as much revenue out of it as possible, but they are not doing that — this is their give-back.”
The building is about 36,000 square feet. Approximately 17,000 square feet will serve as the rental space for manufacturers, as well as retail and community event space. Qualtek and a distillery currently occupy the back of the building.
The first phase of the project includes interior renovation of the leased, retail and community event space and is expected to be completed in about nine months, Taylor said.
“In the middle of the space, we will have what we call our collaborative corridor, which will be a kind of cool break room space,” she said. “There also will be a shared meeting space that’s on a raised mezzanine.”
The project is being designed by Springs-based architects, HB&A.
“We’ve come a long way since we started all this in July in determining our programing and getting this beautiful building designed,” Taylor said. “We’ve had all the community leadership come in and learn about the facility, and we have really honed it down to a project that’s about growing manufacturing.”
The plan for the retail space is a coffee shop-type business that also serves beer and wine.
“Something that will draw in our community — not just the manufacturers — but also students from UCCS, people on this North Nevada corridor,” Taylor said. “That will bring in extra revenue for us.”
Additionally, the community event space, which has an attached warming kitchen area, will be available for rent.
“Say the Business Journal wants to have a luncheon or a reception or any kind of gathering, we will have the perfect space for that once we are built out,” Taylor said. “With those other sources of revenue, we are able to keep the rents low so that the tenants can focus on growing their businesses and hiring more people and not how they are going to make their rent next month.”
The building is part of the Economic Opportunity Zone on North Nevada Avenue, Taylor said.
“We hope to be the northernmost project that helps spur on development going south towards the National Cybersecurity Center,” she said. “We hope that this gains a lot of attention and we get some investments from the Opportunity Zone.”
Desired tenants are light manufacturers that are hitting a “milestone in their growth” and need to transition into a bigger space, Taylor said.
“We aren’t looking for new startups,” she said. “These are companies who have products, processes and customers, but they don’t have enough critical mass to have their own building yet.”
Though still in the design phase of the project, MFG’s building already has its first tenant — MotoMinded.
The custom motorcycle parts store is owned by Chris Vestal, who founded the Makerspace on the old Gazette newspaper campus on Pikes Peak Avenue in downtown.
“MotoMinded outgrew the Makerspace both in our space needs and our equipment needs,” he said. “We were hogging machines and things like that so it was time to move on.”
When looking for a new space, Vestal said someone told him about the MFG project.
“They have the right amount of space for the next growth level for a small manufacturer from a shared space or co-working environment,” he said. “This is the next step before you go off and buy your own building — a milestone.”
Taylor said the company didn’t intend to allow renters until the redesign was finished but is willing to work with interested parties.
“If someone was absolutely dying for space right now, we would let them come in and build out a temporary space as long as they are OK with having to move around during construction,” she said. “There have been several small manufacturers that have come through to look at the space, and people seem to really like the concept.”
Vestal said it’s difficult to find clean warehouse space available in the Springs.
“We are competing with marijuana grow spaces,” he said.
The overall vacancy rate for industrial properties in the region fell from 9.7 percent at the end of 2016 to 9.4 percent in 2017, according to a report released last year by Colorado Springs-based real estate firm Quantum Commercial Group.
“These vacancy rates, however, do not reflect the strength of the market for industrial spaces 10,000 square feet and less, where we are seeing the vacancy rate dipping slightly below 4 [percent],” the report stated.
Vestal said their MFG space is about 1,500 square feet — the “perfect” size for MotoMinded.
“Renting here, it also allows us to have access to things we wouldn’t be able to afford right now,” he said. “We wouldn’t have a loading dock, conference or break room because there is no reason to budget or pay for that at this point of our growth, so having those shared things is great.”
Another benefit to renting from MFG will be the collaboration Vestal believes will happen between tenants.
“I already am having our neighbors Qualtek do something for me,” he said. “It’s also getting like-minded folks together and the potential of solving each other’s problems is pretty neat. I could see maybe even spinoff companies forming out of it.”
Taylor said MFG wants the project to build a sense of camaraderie around manufacturing and technology in the Springs.
“It’s going to be a place where people can come together and sort of collide with each other in terms of, ‘Who are your customers?’ ‘What is your process?’ or ‘Maybe you have a piece of equipment I can use,’” she said. “It really is a collaborative environment we are creating.”
A stipulation for interested tenants is they must participate in some sort of social give-back themselves, Taylor said.
“It’s going to be part of the application process. ‘What do you do to give back to your community?’ And we don’t mean just giving a bunch of money somewhere,” she said. “You have to do something meaningful that is going to help our community grow, prosper and bring people together.”
For example, Vestal started teaching people about 3D printers after noticing a need for instruction in the Springs, he said, adding the social element also played into his decision to rent from MFG.
MFG is not an accelerator for startups nor does it provide counseling or business advice, Taylor said.
“We are just providing the space and the cool stuff that goes along with it,” she said. “A lot of the infrastructure for manufacturing has left Colorado Springs. The jobs have left Colorado Springs, and we are trying to bring it all back.
“We want to see a resurgence of manufacturing in Colorado Springs because the backbone of a community is what’s made there.”