published Thursday, November 21st, 2013

River City Company's Project Popup pops, then fizzles

While the north end of the City Park building, seen here, is full, a mixture of open and closed businesses occupy the south end of the building in the 800 block of Chestnut Street. The south end of the building was the focus of the River City Co.'s "build a block" initiative, Project Popup.
While the north end of the City Park building, seen here, is full, a mixture of open and closed businesses occupy the south end of the building in the 800 block of Chestnut Street. The south end of the building was the focus of the River City Co.'s "build a block" initiative, Project Popup.
Photo by John Rawlston.

It was a nice idea, it just didn’t work.

That’s what some business owners are saying about Project Popup, a River City Company iniative that offered reduced rents and marketing incentives to move new businesses into the then-empty CitiPark building at 801 Chestnut Street.

About a year after the program started, four of the five original business owners in the program have closed, moved out or sold.

Popup tenant and Tasty Daylight Donuts owner Tony McInnis closed as soon as he could get out of the lease, on Nov. 1. The Chestnut Street shop was his second Chattanooga location, and he lost $30,000 trying to get it off the ground.

“When you’re in a retail food business like we are, you’ve got people, product and place,” he said. “The people are interchangable with my East Brainerd location, the product is exactly the same as my East Brainerd location — where we’re just trying to keep up because business is so good — so by the theory of deduction, it had to be the place.”

McInnis said the block fails to attract enough pedestrian and car traffic to sustain small retail shops for the long term. He discovered that if drivers are going to park and walk downtown, most do it closer to the Tennessee Aquarium and the riverfront. Not many wander much beyond 6th Street, he said.

And while out-of-town convention goers did help boost business when they were in town, it wasn’t enough to turn a profit. Or even break even. Now he’s out of downtown and planning to open a location in Ooltewah.

“[River City’s] whole idea is to pump life into an area that isn’t that good,” McInnis said. “That caused us to take a chance and go into that location. We might have been better off to sit and wait until the right location downtown opened up. We might have had a different outcome.”

He’s not the only small business who struggled to make it work in the program, which gave each business free rent for six months, $3,000 to help cover buildout costs, professional development classes and marketing. Lynda Buckels, owner of O.C. Buckels & Co., moved out of CitiPark in August, and is now planning to reopen the craft shop on the North Shore.

She said the North Shore’s daily car count was three or four times the count on Chestnut Street, yet the rents were comparable.

“I wanted it to work, so much,” she said. “I adore downtown. I shopped downtown as kid and I wanted to be a part of retail downtown. But I have to go where the customers are.”

Original Popup tenant Aaron Welch moved his venture, Iron Gaming, into the Business Development Center and is now expanding. And participant Tom Bleasdale sold his shop, Go Bagel, on Nov. 1 to Chris Sepe, who is revamping the business, expanding the menu and changing the name to The Nooga Noshery.

The only original Popup tenant left standing is Carrie Pendergrass at gift shop Sewn in the Sky. She said she loves the location but isn’t sure whether she’ll be able to stay in CitiPark into next year.

“My thing is just financial,” she said. “It’s not that I don’t believe this location could be good, it’s more me being able to sustain my costs to stay here.”

But while the original tenants are moving out, other retailers are moving in, said Amy Donahue, communication specialist at River City. The Nooga Noshery will be open in the block, a salon has moved in and a regional retailer is interested in another available spot. Downtown restaurant Bleacher Bums is filling the hole left when Tasty Daylight Donuts moved out.

“We would have loved for the donut shop to stay there and stand the test of time,” Donahue said. “But what we want is for our downtown to be animated and filled. Even with the flux of tenants who have been there, [the program] has generally gotten people rethinking that area. Spaces are being filled and retail is still being provided to downtown residents.”

And that, she said, has made the program successsful. The building is no longer sitting vacant. And as the city fills in downtown with new residents, that should help boost sales in the block.

River City is considering launching Project Popup 2.0 with a whole new group of businesses and in another empty block of town, Donahue added. This year, all participants without previous business experience will be required to go through the Co.Lab’s entrepreneurial bootcamp, Co.Starters.

“We hope to plug Project Popup 2.0 into the City Center plan,” she said, referring to River City’s long term plan for development in downtown Chattanooga. “It’s going to be part of a much bigger plan.”

Bleasdale said he’s not sure whether Project Popup was a success or failure.

“It depends on what your metric for success is,” he said. “If you go strickly on economics, you’d say unsuccessful. But if you’re going on the idea that they were trying to reinvigorate that part of town and get people to try something — that brought attention to the block and attracted people who weren’t a part of the program to relocate there. It’s a win for somebody.”

Contact staff writer Shelly Bradbury at 423-757-6525 or sbradbury@timesfreepress.com.

about Shelly Bradbury...

Shelly Bradbury covers police and crime in Chattanooga and Hamilton County for the Times Free Press. She's been with the paper since 2012, working first as an intern and then as a business reporter. She is from Houghton, New York, and graduated from Huntington University in Huntington, Indiana, with a bachelor’s degree in journalism and minor in management. Before moving to Tennessee, Shelly previously interned with The Goshen News, The Sandusky Register and The Mint ...

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