HomeMy WebLinkAboutSmart Growth America - Made in Place Small Scale Manufacturing Neighborhood RevitalizationMade in PLACE
Small-scale manufacturing and neighborhood revitalization
About this report
Technological and economic changes have created new opportunities in small-scale manufacturing and the
“maker” economy, presenting a chance for communities to make progress on several important economic
development issues. Small-scale manufacturing can grow local entrepreneurship and small business, develop or
enhance new and existing economic sectors, and revitalize downtowns and business districts. Using tools and
case studies, this whitepaper builds the case for why economic development practitioners should be thinking
about working with small-scale manufacturers, how to grow the sector, and the particular synergies that are
created when locating these businesses in downtowns and mixed use centers.
This report is produced as part of a broader technical assistance program which includes the provision of direct
assistance to communities. Funded by the U.S. Economic Development Administration, and conducted in
partnership with Recast City, the assistance guides communities in reviewing existing policies and programs that
support local producers to grow their businesses in target neighborhoods. Specifically, the selected communities
received a community assessment, during which the project team conducted fieldwork in the local subject area,
held in-depth interviews with small-scale manufacturers, and led discussions to coordinate efforts with local
stakeholder groups. The four communities that received technical assistance are:
• Knoxville, Tennessee
• Lowell, Massachusetts
• Twin Falls, Idaho
• Youngstown, Ohio
The overall goal of this initiative is to help communities grow their small-scale manufacturing and help their
community revitalization efforts. It takes explicit advantage of the fact that small-scale manufacturing can help
downtown revitalization and in turn, small-scale manufacturing can benefit from and thrive in downtown locations.
This whitepaper brings together lessons from the technical assistance cities and lessons from around the country
and identifies four actions to put these ideas into practice in your community.
Table of contents Introduction 3
How do small-scale manufacturing, downtowns and neighborhood centers support each other? 4
The benefits of small-scale manufacturing in neighborhood centers 4
What kind of spaces does small-scale manufacturing need? 9
How can your community encourage and grow small-scale manufacturing? 14 1. Find, connect and support small scale manufacturers 14 2. Identify funding sources 16 3. Encourage small, light industrial space in local developments 18 4. Create cross-sector partnerships 19
Conclusion 20
Acknowledgements 21
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Made In Place: Small-Scale Manufacturing and Neighborhood Revitalization
Introduction
Throughout the 19th century, small-scale manufacturing grew in cities, towns and villages all around the
United States. For these businesses, location and resources mattered: power sources, natural resources,
and access to markets and people. These local assets created a manufacturing environment that was human
in scale, and integrated into the fabric of their communities.
In the 20th century manufacturing transformed into a predominantly large-scale enterprise and moved out of
neighborhoods and downtowns. Large-scale manufacturing became an incompatible use for neighborhoods
and downtown areas due to its large physical scale, noise, significant freight requirements, and pollution.
These factors ensured manufacturing’s separation from neighborhoods and commercial centers into
standalone facilities or industrial parks. This change also created high barriers to entry in the manufacturing
sector because production only occurred in high-cost, large scale plants and produced thousands of units at
a time.
Now, recent technological and economic shifts—such as access to online marketplaces, the ability to
process sales on mobile devices, and affordable access to tools for smaller production runs—have lowered
those barriers. These trends are changing what is possible in manufacturing, and point the 21st century
economy back to this new old trend: small-scale manufacturing.
This new face of manufacturing allows many more people to produce and sell their own goods: costs of
production are lower, tools are more accessible, space needs are smaller, production runs can be small and
on-demand, and sales can start overnight. And similar to 19th century manufacturing, these entrepreneurs
often benefit from being embedded in downtowns and neighborhood centers—and these areas also stand to
benefit greatly from their presence there. Production is compatible with neighborhood uses, is interesting to
see, and fits into small spaces. For communities, this presents a dual opportunity to simultaneously grow this
business sector and contribute to neighborhood revitalization efforts.
Many local economic development strategies include support for growing and launching small businesses
such as retail shops and professional services. However, small-scale manufacturing is often overlooked by
local economic development practitioners—but can be an important piece of any economic development
strategy and downtown redevelopment initiative. Similarly, the typical practice of mixed-use development
includes retail, office, and residential to promote downtown revitalization, but rarely considers small
production businesses as a complementary use. Plans often expel industrial uses outside of downtowns to
suburban auto-oriented industrial parks.
But there are examples from around the country that are now turning this notion on its head, demonstrating
that manufacturing businesses are not only thriving as a result of being on main street and in mixed-use
districts, but are contributing to the character, appeal, and success of walkable neighborhoods.
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Made In Place: Small-Scale Manufacturing and Neighborhood Revitalization
How do small-scale manufacturing, downtowns and neighborhood centers support each other?
Small-scale manufacturing is emerging as an innovative strategy in today’s neighborhood revitalization and
economic development toolbox. And, these same businesses are finding that these locations can help
them thrive. How are small-scale manufacturers and makers fitting into these spaces, and how can these
same areas be fertile locations to grow the sector and reap
economic benefits?
Communities that locate these manufacturers within existing
downtowns or walkable retail areas benefit in many ways.
First, small-scale manufacturers can draw foot traffic and
help to fill retail spaces that are difficult to lease or are
vacant. The entrepreneurs that start these businesses quite
often become powerful brand ambassadors for their cities
and towns, highlighting the innovation and benefit of local
production. The small scale-manufacturing sector is integral
in building the small business community. Furthermore the
sector provides an inclusive pathway and an opportunity for
jobs for individuals that may have difficulty finding them in
other sectors.
The benefits of small-scale manufacturing in neighborhood centers
Advancements in industrial technologies make small-scale manufacturing a strong alternative use in
mixed-use corridors and centers. Small-scale manufacturers are cleaner and quieter, and more compact
compared to traditional heavy manufacturing and thus can physically fit and be good neighbors. The small
manufacturers benefit from existing infrastructure investments, access to retail customers, and proximity to
transit, retail, housing, and a robust diversity of businesses and workers. For instance, a small manufacturer
who fills a vacant storefront both attracts neighborhood residents to walk by and see production, and
benefits from any existing foot traffic from other retailers or local transit stops. Additionally, manufacturing
businesses benefit from being near each other. Small manufacturing business owners can help build a
steadier supply of skilled labor, attract more competing suppliers, and encourage knowledge spillover
between firms. This critical mass can only be achieved by allowing firms to locate in close proximity of one
another, and near existing housing and commercial centers.
Small-scale manufacturing is an
umbrella term that refers to all types of
small businesses that produce tangible
goods. This includes textiles, hardware,
woodworking, metalworking, and 3D-
printing. It also includes hardware
prototyping, consumer product design and
prototyping, breweries and distilleries, and
local food production and packaging. The
businesses may be consumer-facing or
provide products to other businesses and
often have 1-30 employees.
(Source: Recast City)
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Made In Place: Small-Scale Manufacturing and Neighborhood Revitalization
Small-scale manufacturers are also drawn to strong, dynamic places. These businesses often market and
brand themselves by using the city, town, neighborhood, or even the building where they produce. Small-
scale manufacturers, like many entrepreneurs, increasingly want to be in downtown or comparable areas
to attract talent. They value quality of place as a critical factor when choosing their location.1 The places
they locate are not accidental—they identify strongly with the communities in which they work, sometimes
developing locally made brand platforms such as Made In Baltimore and Cincinnati Made, becoming strong
ambassadors for a place. Conversely a community’s own brand can benefit when the city or community is
associated with a cool, innovative, or original brand and product.
Creating a foothold for future growth
Communities around the country are changing zoning and city policies to accommodate these businesses
downtown and in commercial centers because they are not only employers, they are destinations in
themselves. Small-scale manufacturers can be among the first businesses in target areas for redevelopment
before it’s feasible for traditional retail to survive. Many of these businesses have more diverse revenue
sources than traditional retailers—including online sales, business to business, or specialty orders. While
most of these businesses are not necessarily dependent on foot traffic to be financially feasible, they can
serve to help draw people to an area. Some small-scale manufacturers, like breweries, can also serve as
stand-alone destinations, drawing an experience-oriented crowd.
Small-scale manufacturers create a unique amenity that can attract people to a new place. In addition
to retail, restaurants, and cultural venues, small-scale manufacturers can give residents and visitors new
reasons to come spend time in a neighborhood. As local products such as food, wood products, and
textiles are made in core neighborhoods for the first time in decades, these businesses are destinations for
customers to see firsthand where their products come from, and add to the connection with customers that
is already driving the buy local movement.
Providing another attractive option to fill retail space
Many cities encourage ground-floor retail through zoning to support active street frontages and promote
human-scale urban design. Yet there is not always adequate demand from existing retailers or service
businesses to support ground floor retail, especially in the initial years of lease up in new development.
National changes in retail trends are exacerbating retail vacancies. Taken as a whole, the U.S. has more
square feet of retail than demand. Traditional retailers closed hundreds of stores in the last few years, and
analysts believe more will do the same over the next decade.2 Meanwhile, online retailers like Amazon and
other e-commerce platforms show no signs of slowing down.3
This changing retail landscape represents an opportunity for small-scale manufacturing to fill the gap in
mixed-use districts and neighborhood main streets. Small-scale manufacturers are a different tenant type
than traditional retailers or service providers, as hybrid businesses that can simultaneously be producers
and main street retailers. They can thrive in locations that are not prime retail frontage, shapes, or sizes.
A business may sell wholesale online, but can draw attention on a block through a formerly vacant store
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Made In Place: Small-Scale Manufacturing and Neighborhood Revitalization
that now shows machinery and people at work. A collection of businesses can help to attract other retail
investment in an area that has been neglected. In some cases, these businesses become an experience and
destination of their own, anchoring the block or development.
Growing small-scale manufacturing creates a resilient small business environment
Small business is key to not just local economic success, but national prosperity, accounting for two out
of three net new jobs created in the U.S.4 Supporting a diverse variety of small businesses, across industry
sectors, creates jobs for a diverse range of skill sets and wages, and helps buffer local economies from
dramatic fluctuations in any one individual industry. Additionally, small businesses tend to keep money within
local economies longer: local businesses reinvest nearly 50 percent of their revenue in the local community,
versus about 14 percent reinvested from large chains.5 Strategies that seek to grow local economies from
within by nurturing local businesses, often referred to as economic gardening, support local entrepreneurs
to create companies and bring new jobs and business to a region. Nationally, strong regional economies are
correlated with having many small businesses rather than a few large ones.6
Small-scale manufacturing businesses are a key piece of building the local small business sector. According
to data from the Manufacturing Institute, over 75 percent of manufacturing businesses in the U.S. had fewer
than 20 employees in 2014, as illustrated in the graphic below. Communities will benefit from strategies that
include these small manufacturing businesses in local small business programming and placement efforts.
Source: Manufacturing Institute; Bureau of Labor Statistics
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Made In Place: Small-Scale Manufacturing and Neighborhood Revitalization
Building a more inclusive business community
In addition to diversifying a local business ecosystem, small-scale manufacturing firms have the added benefit
of expanding economic opportunity to a diverse range of residents. As a sector, small-scale manufacturing
represents a diverse demographic population. Data show that small-scale manufacturing entrepreneurs come
from a range of ethnic and racial backgrounds, and include men and women. For example, on Etsy, one of
the largest platforms for makers and micro-manufacturers, 87 percent of sellers are women.7 Additionally,
there is a growing trend of entrepreneurialism in immigrant communities: 28.5 percent of new entrepreneurs
in 2014 were immigrants, up from 13.3 percent in 1999.8
Yet the outreach and assistance offered by local government often miss many of these business people.
Additionally, the lack of access to capital sources is a major barrier to minority entrepreneurs. Local
governments are recognizing the importance of bringing resources and assistance to underrepresented
entrepreneurs from diverse cultural and demographic backgrounds, who may not know about programs,
points-of-contact in local government or existing capital programs for small business. With continued public
sector support and strong public-private partnerships, small-scale manufacturing can continue to serve as an
entry point to capitalize on skills in the community, and empower residents to turn their skills into a business.
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Made In Place: Small-Scale Manufacturing and Neighborhood Revitalization
Job accessibility
Small-scale manufacturers also provide jobs with economic mobility across a variety of education levels. On
the whole, the manufacturing industry employs an outsized share of workers without a college education.
Such jobs are accessible to workers who are unable to access, or choose not to pursue, higher education. In
addition, research from the Brookings Institution shows that advanced industries (which is inclusive of small-
scale manufacturing) pay more than retail at every education level.9 In particular, for individuals without a
college degree, manufacturing jobs pay higher wages than other industries when compared to retail, casino,
call center or other service jobs.10 At the same time, new training programs are helping to build the pipeline
of skilled employees who can jump into this field with exposure to different types of small and scalable
production tools. With targeted support, the sector can help interrupt the cycle of poverty many families
and communities face. A national survey of kitchen incubators, for example, revealed that a significant
percentage of their tenants are women (61 percent), an ethnic or racial minority (32 percent), and/or come
from low-income backgrounds (28 percent).11 Even when facilities do not intentionally seek to build wealth in
lower-income communities, they often do so de facto.
Source: U.S. Census, 2016 American Community Survey
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Made In Place: Small-Scale Manufacturing and Neighborhood Revitalization
What kind of spaces does small-scale manufacturing need?
Small manufacturing integrates well with existing community development, but also has some needs specific
to its sector. Economic development staff will need to understand who these businesses are within the local
community in order to support their space and growth needs.
Most small-scale manufacturers fall into one of three categories:
Artisan industry
A business using small tools,
light machinery, and hand tools.
These businesses are most
often consumer-facing and sell
through a variety of channels,
including online, at craft fairs
or pop-up markets, and/or in a
small storefront.
Small production
These businesses might provide
contract production services to
other designers and producers
alongside production of their
own items. These businesses
may or may not be interested
in scaling from this size. These
businesses produce goods
for both consumers and other
businesses, and may sell direct
to consumers and/or wholesale.
Small production and scaling
A scalable business with
ownership that wants to grow.
These businesses often work
in textiles, hardware, or food/
beverage, with some or all
production on site. Some of
these businesses may have a
dispersed production model
and use multiple contract
manufacturers for specialized
items.
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Made In Place: Small-Scale Manufacturing and Neighborhood Revitalization
Each category of businesses is often left out of local economic development strategies. These businesses
hire locally, purchase supplies locally, and their owners or employees generally live within the community.
While their space needs vary depending on product and business model, they all benefit from being closer
to existing neighborhood centers and main streets. Additionally, some of the infrastructure small-scale
manufacturers need fit well into community redevelopment projects.
Many local economic development departments provide services to help find space, address moving costs,
and sometimes defray the first few months of rent or a major capital improvement for new local businesses to
help get settled. Local government staff, chambers of commerce and community development corporations
may serve this role. Each should consider how different spaces may be well suited for small-scale
manufacturing businesses, and mesh this sector’s needs into existing planning and economic development
efforts:
Small storefronts for retail and production space
Some consumer-facing producers lease small workshops where the business can sell products and also do
production on site. Many of these micro-retailers produce high value items with small equipment and choose
to locate within neighborhoods. These businesses complement other storefront uses such as retail-only
shops and restaurants, add vibrancy to the street front as people can walk by and watch products being
made, and fill vacant spaces in commercial corridors.
Example: The Art Walk in Washington, D.C. leases micro-retail spaces to local artisan industries.12 The
400-800 square feet spaces provide a low-cost option for businesses that want a storefront for both
production and retail. The development includes apartments above the micro-retail, on a pedestrian walkway
to a subway station. Businesses, such as textile producer Stitch & Rivet, can grow from smaller units to larger
ones as their staff and production needs grow, all while adding energy and foot traffic to the area.
The Art Walk at the Brookland Metro station in Washington, DC. Photo courtesy
of Monroe Street Market. http://www.monroestreetmarket.com/
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Made In Place: Small-Scale Manufacturing and Neighborhood Revitalization
Shared kitchen
Shared commercial-grade kitchens, or kitchen
incubators, rent shared-use food processing and
storage space to multiple food production tenants.
These tenants are in the food processing, catering,
wholesale or food retail sector. Shared kitchens allow
food production businesses (like food trucks, small-
scale catering businesses, or pop-up eateries) to
launch with lower risk, and can significantly reduce
the barrier to entry for low-income business owners.
Expensive food production equipment and facilities are
owned and maintained by the kitchen operator (for-
profit and non-profit) and producers pay a fee to use
the facilities.
These facilities allow food producers to avoid the
heavy costs of a brick and mortar location, to scale up,
and also to comply with health department regulations. Over 50 percent of kitchen incubators are less than
5,000 square feet.13 Some kitchen incubators also offer assistance with business planning, marketing, and
licensing. Many are mission-driven NGOs that promote business ownership in low-income populations.
Example: The Common Wealth Kitchen Incubator in Youngstown, Ohio grew out of a local community
development corporation that previously focused on housing.14 The kitchen incubator is a non-profit and
offers hourly leasing for tenants interested in using food processing and storage equipment. The facility also
has a specialty thermal canning system that attracts users from around the country. The incubator is located
in a 1930’s building on a historic corridor within a residential neighborhood. The facility is clean and quiet, and
is a good neighbor to the apartments on the second floor of the building and the residential neighborhood
around it.
Industrial cowork buildings
Some multi-tenant industrial buildings provide workspace to small producers of varying size on a monthly or
annual lease basis. Unlike usual shared-office or cowork models, these spaces are zoned to allow production
uses. Such buildings are a key part of the local infrastructure for small producers. By offering built-out and
safe space with flexible lease terms, tenants can expand their space along with the growth of their business.
Industrial coworking spaces offer unique amenities like loading docks, freight elevators, and high ceilings to
support small-scale manufacturing. They may also include shared conference rooms, office suites, and other
business services specific to production-based businesses. They are often located near residential areas, on
commercial corridors, or in transition areas between residential and heavier industrial uses.
Food being prepared inside the Common Wealth Kitchen Incubator
in Youngstown, OH.
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Made In Place: Small-Scale Manufacturing and Neighborhood Revitalization
Example: The Western Ave Lofts and Studios in Lowell, Massachusetts used an artist district zoning overlay
to accommodate live-work space for over 300 small-scale manufacturers and artists in a historic fabric mill
building.15 The mill has five floors of flexible use space where jewelry makers, textile production, soap makers,
a local brewery/tap room and a mix of other businesses produce goods. This built-out space is essential for
the city to retain these businesses and jobs within the community.
Makerspaces
Makerspaces offer a range of production and fabrication tools to
work in wood, metal, textiles, electronics, 3D printing, and more for
a membership or class fee. Makerspaces may focus on attracting
the existing hobbyists in a community, provide tools and space for
workforce training, or grow in response to a burgeoning artisan business
community that needs access to more tools at a lower cost. Business
models vary greatly in size and user type. Some makerspaces are large,
for-profit ventures and others are community-based and fit into libraries
and community centers. Users of makerspaces could be complete
beginners to 3D printing, and others might be professional woodworkers
who are looking to grow their business. In many cases, a makerspace
can become a neighborhood focal point and community gathering space
for youth and adults.
Example: Knox Makers, in Knoxville, Tennessee is a non-profit
makerspace that provides equipment and tools to members for a small
fee.16 It provides tools to work with wood, metal, electronics, 3D printing,
textiles, leather and laser cutting to its members. The space also hosts
discussions and events on maker techniques and technology. Its goal is to be a community gathering place
for engineers, entrepreneurs and hobbyists.
Incubator or co-op for industry-specific businesses
Some small-scale manufacturers graduate from a makerspace or a startup program and need a specialized
place to produce a product at larger quantity. Accelerators and incubators are a key piece of the
infrastructure to support them. They may offer production advice and business counseling in a specialized
sector, similar to other incubators. They may also provide access to industrial-grade production equipment
that allows these businesses to scale more rapidly and stay local. These facilities help to lower the cost and
risk to scale, and offer expertise to increase the likelihood of success.
Example: Peabody Heights Brewery in Baltimore, Maryland is a facility that works with independently owned
brewers to help them brew, bottle, label, and scale up their business.17 Brewers may have outgrown their
garages or other smaller scale brewing facilities. The co-op has a master brewer with experience in large-
scale brewing operations. The facility, a former soda bottling plant, has industrial grade equipment, delivery
service, and charges contract brewers a fee per barrel of beer they produce. While the 50,000 square foot
facility is the size of a standard industrial production facility, it fits well into the neighborhood and features a
taproom that hosts events for neighbors and visitors.
A 3D printer in the Knox Makers space,
assembled inside of an old vending machine
case.
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Made In Place: Small-Scale Manufacturing and Neighborhood Revitalization
Mixed-use production space
Small-scale manufacturing businesses often scale from micro-retail or coworking space to their own facilities.
Such businesses often mix well with other uses such as educational institutions and offices, or serve as a
strong neighbor in retail districts. Businesses assume their own risk to lease space, renovate and operate as
they grow.
Example: Shinola in Detroit, Michigan is housed in the same building as the College for Creative Studies.18
The design work, watch and watchband fabrication, and headquarters all operate in this shared use building.
Shinola’s work is complementary to the College’s and they partner on student design workshops. The
business helps bring more jobs to the neighborhood while also supporting the neighboring educational
institution.
A group touring the watch-making floor at Shinola in Detroit, located in the same building as the College for Creative Studies. Flickr photo by
the Center for Positive Organizations. https://www.flickr.com/photos/positiveorgs/22911094602/
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Made In Place: Small-Scale Manufacturing and Neighborhood Revitalization
How can your community encourage and grow small-scale manufacturing?
Based on experience with this relatively nascent sector there are four actions that local economic
development agencies, chambers, local governments and others can take:
1. Find, connect, and support small scale manufacturers
2. Identify funding sources
3. Encourage small, light industrial space in local developments
4. Create cross-sector partnerships
1. Find, connect, and support small scale manufacturers
Many jurisdictions do not have a readily accessible list of small-scale manufacturing businesses or know
who owns these enterprises. Economic development practitioners can build a database of small-scale
manufacturing business owners to understand the locations as well as the types and sizes of spaces the
businesses need. Communities will need to invest in purposeful outreach to identify business owners who are
people of color, women, and from local immigrant populations, since these businesses are often not tied into
the existing business networks. Outreach such as this will ensure that small-scale manufacturers know who
to contact for financing, space needs, infrastructure issues, and city permits. Local attention also increases
their likelihood of remaining in the community.
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Made In Place: Small-Scale Manufacturing and Neighborhood Revitalization
The community’s economic development team can provide a number of different types of support and
connections:
• Identify local, small production businesses through local fairs, markets, ethnic and religious institutions,
and by hosting informal networking events in target neighborhoods.
• Recruit small-scale manufacturers to target retail locations in the community to support reinvestment
and build up the attraction and energy in an area. Provide matchmaking services for potential tenants
with local developers interested in this sector.
• Connect business owners to resources like commercial shared kitchens or makerspace facilities to
expand their production at low risk.
• Provide small business training and entrepreneurship programs specific to the needs of production
businesses, similar to those provided to other types of local businesses.
• Create a marketing brand for locally made products, with an online directory of participating
manufacturers and products.
• Establish a one-stop shop either within the local government or at a partnering non-profit to ensure that
small producers know where to go for help.
Case study – Knoxville, Tennessee
The Mayor’s Maker Council was formed in
2016, designed to develop a shared vision for
the region’s diverse maker community; raise
awareness of Knoxville’s local maker movement
and associated micro-economies; promote local
goods and services; and address government
policies and regulatory issues that impact
maker businesses. 19 The 15 members of the
Maker Council are appointed by the Mayor, and
represent maker businesses, developers, and
community non-profits in the city. The Mayor
sends a representative to all Council meetings,
and the Council hosts an annual Maker City
Summit to connect with maker business owners
and support their work. The city partners with
the Knoxville Entrepreneur Center and the
Knoxville Urban League to create a one-stop
shop of resources for small manufacturing
business owners, startup trainings, a local
Maker City brand, and to work together to connect with minority and women-owned businesses.20,21
Spaces set aside for particular areas of focus in the Knox Makers space in
Knoxville, TN.
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Made In Place: Small-Scale Manufacturing and Neighborhood Revitalization
2. Identify funding sources
Often local and regional economic development agencies lack funding programs to support small-
scale manufacturing businesses. Lenders, both public and private, may not be familiar with businesses
that manage supply chains and product delivery, or micro-enterprises with small margins. Community
development corporations may not be familiar with how to finance coworking facilities for multiple small
manufacturing businesses.
Local governments can create programs that connect small producers to micro-lending, and invest in
buildings that provide low-cost space for local producers or a product-based incubator or accelerator. Local
and national banks’ small business banking sectors can also be valuable partners. These partners can work
together to create a series of funding programs:
• Create or repurpose a municipal revolving loan program to offer small businesses low-cost loan terms
that they may not receive with a short credit history.
• Leverage federal community development block grants (CDBG) to fill financing gaps in shared
production facilities or startup training programs that benefit under-represented populations.
• Build a network of local banks that are committed to local small business growth and connect
successful small-scale manufacturing businesses to this group.
• Initiate an entrepreneur loan fund targeted to minority- and women-owned production businesses,
potentially in partnership with business training or financial literacy programs where needed.
• Employ U.S. Department of Agriculture programs in small towns to fund food business incubators and
makerspaces. Consider programs such as the Value-Add Producer Grant or other Rural Development
program funding sources.
• Utilize the U.S. Economic Development Administration Public Works and Economic Adjustment
Assistance Program to fund infrastructure improvements, site acquisition, rehabilitation and equipment
for small manufacturing. These funds have been used to fund “Made In” branding programs, business
incubators, and commercial kitchens.
• Provide Tax Increment Financing (TIF) or Payment in Lieu Of Taxes (PILOT) awards for a development’s
commitment to below market lease rates for small manufacturing businesses in target locations.
• Help to connect Community Development Finance Institutions (CDFIs) with small-scale manufacturers.
CDFIs have experience funding unconventional borrowers to help small businesses meet their goals.
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Made In Place: Small-Scale Manufacturing and Neighborhood Revitalization
Case study – Lowell, Massachusetts
While local banks are often interested in funding local small businesses, they are not always able to do so.
The City of Lowell, MA brought several local banks together to create the Lowell Development & Financial
Corporation (LDFC).22 The structure of the LDFC allows local banks to reduce their risk by pooling funds to
support local businesses, including small-scale manufacturers. Companies are only considered for LDFC
funding once they graduate from the University of Massachusetts Lowell’s iHUB accelerator or the EforAll
small business training program in order to provide the banks with a vetted pool of businesses. 23,24
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Made In Place: Small-Scale Manufacturing and Neighborhood Revitalization
3. Encourage small, light industrial space in local developments
Small-scale manufacturing businesses need affordable space to produce their goods. This often means that
jurisdictions must be proactive to protect existing light industrial space in target locations and to encourage
new small production space in redevelopment and new construction projects. Local land use policy and
financing must support this outcome. Communities will benefit from policies that keep small production within
neighborhoods to retain good middle-income jobs and the vibrancy that comes with this business type.
• Ensure that existing commercial zones and building codes allow artisan manufacturing businesses. Add
an artisan manufacturing definition to the local land-use code if needed.
• Create an incentive in target zoning areas to develop a minimum square footage of ground floor micro-
enterprise space for small manufacturing businesses. For example, an incentive might be to provide a
density bonus in exchange for development of affordable space for production within a new mixed-use
project or reuse of older industrial properties central to the community.
• Develop an overlay zone to protect existing industrial buildings from conversion to other uses, or create
a district designation that both protects these uses and allows for live-work space and some commercial
development.
• Consider zoning that allows office and retail development on vacant industrial properties if new
development includes a minimum square footage of new light industrial development as well.
• Work with private developers to redevelop surplus city-owned properties with a requirement to include a
minimum square footage for small-scale manufacturing businesses.
• Connect community development corporations or private developers to new market tax credits (NMTC),
historic preservation tax credits (HPTC) to reduce the cost of redevelopment for a project.
Case study – The Production, Distribution, and Repair zone in San Francisco, California
The Production, Distribution, and Repair zone allows new office construction in underutilized industrial lots
when new light industrial is built as well.25 The city developed this policy to address the lack of light industrial
properties left in the city, and created a financial incentive for developers to add to the building stock. The first
project using this zoning is 100 Hooper, a partnership between private developer Urban Green Devco and
SFMade’s non-profit real estate development arm, PlaceMade.26,27,28
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Made In Place: Small-Scale Manufacturing and Neighborhood Revitalization
4. Create cross-sector partnerships
For small-scale manufacturing to succeed, partnerships need to be forged throughout the private,
philanthropic, and non-profit sectors. Economic development professionals can convene these stakeholders
and develop goals to support small-scale manufacturing, identify training needs, and bring additional partners
to the table. Anchor institutions, community colleges, local Urban League chapters, workforce development
programs, and cultural and ethnic institutions can all serve key roles in this process.
• Engage local non-profit organizations that work directly with businesses owned by people of color,
women, and local immigrant populations to build an inclusive network and services.
• Build a partnership with anchor institutions that commit to purchasing a minimum percent of supplies or
services from the local small-scale manufacturing community.
• Convene local philanthropy and corporate investors to support makerspaces, apprenticeships, and
workforce training programs with placements in local manufacturing jobs.
• Partner with community colleges to offer vocational training that includes industrial manufacturing tools
as well as entrepreneurship programs for the trades.
• Work with workforce development programs to help small-scale manufacturers find local hires, and
showcase manufacturing employment opportunities through internships, events, and school trips.
Case study – Twin Falls, Idaho
When Chobani announced it would be bringing hundreds of jobs to its $100 million dollar yogurt facility the
College of Southern Idaho’s (CSI) workforce development team sprang into action. The region already had
low unemployment rates and difficulty filling positions in the booming manufacturing and food-processing
sector. To get ahead of the incoming jobs, CSI’s Applied Technology & Innovation Center (ATIC) partnered
with manufacturers to identify and design applied curricula and facilities that would prepare students for
positions in local industries.29 The ATIC is now home to classrooms and labs equipped with state-of-the-art
manufacturing and food processing facilities and provides students with hands-on training with the same
equipment they use on the floor in their future careers.
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Made In Place: Small-Scale Manufacturing and Neighborhood Revitalization
Conclusion
Small-scale manufacturing has emerged as a way to tie opportunity to place, and can fill a key missing piece
in local economic development.
Every place has its own history of skills and capacity. Understanding how to build on that legacy, while
keeping up with a dynamic labor market and a changing built environment, are critical challenges facing
communities in the 21st century. The tools in this paper represent a range of solutions to better integrate
small-scale manufacturing into existing economic growth and revitalization efforts. Communities of diverse
sizes, industries, and market conditions can find success by aligning manufacturing with neighborhood
revitalization—but regardless of context, these efforts will be more successful if they include an explicit and
deliberate focus on including and harnessing the talents of all their residents including communities of color
and different ethnicities who may not be connected to traditional economic development infrastructure.
Finally, while this paper is intended to provide guidelines for local action, the small-scale manufacturing
sector continues to grow. New practices will continue to emerge that can be added to the local toolbox. In
the meantime, communities in the vanguard need to establish a framework that connects manufacturing
opportunities with other local goals and priorities. They will also benefit from collecting data to measure
performance, where possible, to empower their efforts. Continued action can support an environment
conducive to a healthy, independent local manufacturing community.
Notes:
1 https://higherlogicdownload.s3.amazonaws.com/NMSC/14414aa6-cd92-4a60-83bc-d336e4720b8b/UploadedImages/
projects/Excerpted-Resource-Guide-SOW-1216.pdf.
2 https://www.theatlantic.com/business/archive/2017/04/retail-meltdown-of-2017/522384/
3 https://www.census.gov/retail/mrts/www/data/pdf/ec_current.pdf
4 https://fas.org/sgp/crs/misc/R41523.pdf
5 https://www.amiba.net/resources/multiplier-effect/
6 http://journals.sagepub.com/doi/10.1177/0891242411407312
7 http://etsy.me/sellercensus2017.
8 http://www.kauffman.org/what-we-do/resources/entrepreneurship-policy-digest/the-economic-case-for-welcoming-
immigrant-entrepreneurs.
9 https://www.brookings.edu/wp-content/uploads/2015/02/AdvancedIndustry_FinalFeb2lores-1.pdf
10 http://www.esa.doc.gov/reports/manufacturing-great-recession
11 http://www.econsultsolutions.com/wp-content/uploads/2013/08/ESI-SharedKitchenReport_2013.pdf
12 http://www.monroestreetmarket.com/arts/
13 http://www.econsultsolutions.com/report/us-kitchen-incubators-industry-update/?wpdmdl=38523
14 https://www.cwkitchenincubator.org/
15 http://westernavenuestudios.com/
16 https://knoxmakers.org/
17 http://www.peabodyheightsbrewery.com/
18 https://www.shinola.com/
19 http://www.knoxvilletn.gov/government/boards_commissions/mayor_s_maker_council
20 http://knoxec.com/
21 http://www.thekaul.org/
22 http://www.ldfc.org/
23 https://eforall.org/
24 https://www.uml.edu/Innovation-Hub/
25 http://oewd.org/industrial
26 http://www.kilroyrealty.com/property/100-hooper
27 http://www.urbangreen.net/
28 http://placemade.org/
29 http://www.opsisarch.com/blog/project/applied-technology-innovation-center/
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Made In Place: Small-Scale Manufacturing and Neighborhood Revitalization
Acknowledgements
This report was authored by a team of Smart Growth America staff: Alex Hutchinson, Economic Development
Specialist; Andrew Peng, Program Manager; Chris Zimmerman, Vice President for Economic Development;
as well as the founder of Recast City, Ilana Preuss. Thanks also to the additional SGA staff members
who assisted over the course of the project, including Geoff Anderson, President and CEO; Steve Davis,
Communications Director; and Yuri Chang, Deputy Director of Digital Content. All photos are by SGA staff
except where otherwise noted.
We would also like to extend a thank you to the Advisory Panel, who provided resources and editorial
guidance to the project team: Tanu Kumar, Pratt Center for Community Development; Ilyssa Meyer, Etsy; Erik
R. Pages, EntreWorks Consulting; and Lee Wellington, Urban Manufacturing Alliance.
This project was made possible by the generous support of the US Economic Development Administration.
Smart Growth America is the only national organization dedicated to researching, advocating for and
leading coalitions to bring better development to more communities nationwide. From providing more
sidewalks to ensuring more homes are built near public transportation or that productive farms remain a part
of our communities, smart growth helps make sure people across the nation can live in great neighborhoods.
For additional information visit smartgrowthamerica.org.
Recast City is a national consulting firm that works with real estate developers, city and other civic leaders,
and business owners to integrate manufacturing space for small-scale producers into redevelopment
projects. Recast City brings together small-scale manufacturers and community developers to strengthen
our neighborhoods, build value in our real estate, and create more job opportunities for residents. We help
landowners, developers, and city leaders understand this growing business sector and how to incorporate it
into real estate products. We help maker industry entrepreneurs and small manufacturing business owners
get the support and exposure they need. And we help communities create more good paying jobs for our
local residents. Learn more at www.recastcity.com.
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Made In Place: Small-Scale Manufacturing and Neighborhood Revitalization
Smart Growth America1152 15th Street NW Ste. 450Washington, DC 20005
(202) 207-3355www.smartgrowthamerica.org