The Krueger-Scott Mansion in Newark, New Jersey, has a history of immigrant and African-American entrepreneurship. The 40-room home was built in 1888 for German immigrant Gottfried Krueger, who made his fortune brewing beer. In 1958, Louise Scott purchased it to run a beauty school on the lower floors, while living in the rooms above. She is thought to be the first female African-American millionaire in New Jersey.
When Scott died in 1982, the imposing mansion passed to the city and it fell into significant disuse and disrepair. That is, until this September, when Newark Mayor Ras Baraka led a groundbreaking to transform the property into an innovative economic and housing development designed to give Newark entrepreneurs with limited resources access to affordable housing, office space and business support.
When the mansion re-opens in 2021 it will be known as a Makerhood, a term coined by Avi Telyas, an immigrant entrepreneur and real estate developer. Telyas worked five years with the city to refine a housing and economic development model he believes can scale to other cities.
“The way we plan and build our cities — the very urban fabric and built environment we have — poses too much of a challenge for a lot of folks, just renting a small space is very prohibitive,” Telyas says. “I thought about re-creating the Lower East Side we once had, a ‘living above the store’ model in which more people could try entrepreneurship if the barriers were lowered.”
Telyas presented his vision of “employment-oriented development” (a play off transit-oriented development) in a 2015 TedXJerseyCity talk. His idea was a development holding both affordable housing and affordable office and light manufacturing space, alongside support and resources for inhabitants to grow their business. The plan was to pilot the model in Jersey City, but after holdups he turned his attention to Newark.
The idea had early support of Aisha Glover, at the time president and chief executive 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 proposal “reminded me of some of the businesses at the Brooklyn Navy Yard, that small-batch, artisanal vibe,” she says. “But I think there are a lot of misconceptions as to what that means as far as access to Black and Brown people and quality jobs.”
The goal in Newark was to support lower-income minority makers and small business owners through the Makerhood model. The Krueger-Scott Mansion felt like the perfect fit, Glover says: “The legacy of Black entrepreneurship was alive and well in that building.”
In 2015, the city signed a redevelopment agreement with Telyas. He then worked with city officials on a complicated funding, zoning and approvals process that spanned five years before the deal closed this year. “When we were doing our closing calls with various investors and lenders, there were 31 lawyers on the call,” he notes. “That’s how complex it is to develop a unique project in the urban center.”
The funding model — which took up 60 pages of spreadsheets — included money from Local Investment in Support of Communities, the United States Department of Housing and Urban Development, New Jersey Community Capital, Wells Fargo Bank, Prudential Life Insurance Company, the city of Newark and Telyas himself. It utilized New Markets Tax Credits “to bridge the funding gap,” according to Telyas.
Zoning posed another challenge. Telyas proposed a unique zoning model, called “Makers Zoning,” ultimately adopted by the city. It allowed residential apartments to exist atop light manufacturing space. He included a requirement that people leasing the office and manufacturing space must live in the building. “It’s the most controversial part of this zoning,” he notes, “But I didn’t want some rich person, living in a high-wealth zip code, coming into Newark every day and extracting that income back to their community.”
Gallery: Makerhoods renderings
Telyas started a second company, Makerhoods Inc., which he self-funds, to support the existing maker community in Newark and provide future support to the makers selected to live and work in the mansion. (The company also launched a digital Makerhoods Market platform for Newark business owners in the midst of COVID-19.) “We recognize that cheap space is not enough,” he says. “You really need to help people with their business.”
SaVonne Anderson, founder of Aya Paper Co., tapped into Makerhoods for consultation on her business goals, accounting and tracking sales. (She’s uncertain if she will apply for an apartment and workspace with Makerhoods.) “We had our first meeting when I was planning to leave my job to do this full-time,” Anderson says. “They were supportive in preparing me before I left and helping me sustain the business since I have.”
Anderson stresses that Newark’s creative community was flourishing long before the arrival of Makerhoods — but she appreciates the company creating new frameworks for local entrepreneurs to connect. She adds there’s demand for affordable housing and office space, especially in proximity to one another. “With gentrification, a lot of times the place you work is not the place you can afford to live,” she says.
Telyas views this community-building work as crucial to the Makerhood development — and as a way to identify potential future tenants. This month Makerhoods Newark released applicant criteria for the 16 makers who will receive an apartment, commercial space and business support starting at $1,800 per month, depending on income and apartment size.
The overall development, which includes restoration of the mansion and new construction of residential and commercial space, includes 66 mixed-income apartments, 10 commercial shops, a shared commercial and demonstration kitchen, greenhouse and courtyard event space. The kitchen will accommodate an additional six “makers,” according to Telyas.
The Makers Zoning has been adopted in Patterson, New Jersey, where Telyas hopes to open a second development. His hope for expansion is to partner with other real estate developers who can replicate the same model in their local market. “We bring our Maker development to the table and we have a scalable, national solution,” he says.