Incubators see an emerging market

SPRINGBOARD: From left: Brothers Brian, Daniel, Jay and Kevin Murphy are converting the former Providence headquarters of Home Loan Investment Bank into a startup hub. Fledgling companies will begin on the third floor and move up if they are successful. / PBN PHOTO/BRIAN MCDONALD
SPRINGBOARD: From left: Brothers Brian, Daniel, Jay and Kevin Murphy are converting the former Providence headquarters of Home Loan Investment Bank into a startup hub. Fledgling companies will begin on the third floor and move up if they are successful. / PBN PHOTO/BRIAN MCDONALD

To fill empty space in a sluggish office market, some Rhode Island property owners have decided to help grow the new corporate tenants of the future.
They’re building new or renovated incubator spaces, small, flexibly arranged offices catering to startups, entrepreneurs and anyone desperate to get out of the home office and coffee shop.
One recent example is on Weybosset Street in downtown Providence, where the Murphy family, owners of Home Loan Investment Bank, have decided to convert their old company headquarters into a startup hub.
“We decided to take an ‘if you build it they will come’ mentality,” said Kevin Murphy, a corporate lawyer who will be starting his own practice in the building and one of four brothers involved in the incubator project. “We wanted to make sure we were ready when the economy turned around.”
The upper floors of the three-story, turn-of-the-century building at 244 Weybosset, which was home to Home Loan Investment Bank offices from 1984 to 1995, had become difficult to fill since the recession.
The family rebuffed a proposal to convert the building into apartments, but did not have a tenant for the upper floors since U.S. Air Force recruiters left in 2010.
After kicking around the idea of renovating the building to fit multiple smaller tenants for several years, the Murphys decided to do it last year after discussions at The Rhode Island Foundation’s “Make It Happen” forum about fixing the state economy.
“I finance small businesses, so I am in contact with entrepreneurs and a lot of them said they were looking for space, but they only needed a room,” said Daniel Murphy, vice president of sales and marketing at Ocean Capital, the commercial lending arm of Home Loan Investment Bank.
“We wanted to create a space where like-minded individuals would come to work,” Daniel Murphy said.
When the renovations are finished – expected at some point this month – the incubator will open as the Hatch Entrepreneurial Center with 6,000 square feet of space and access to mentors in areas including accounting, finance, law and marketing.
The incubator will feature a range of space options, from a single desk to multiroom suites and offer entrepreneurs the flexibility to rent for days or for months. Rent will be determined on a kind of sliding scale depending on exactly how much space a startup needs, how many people will use it and how long they need it.
The third floor will feature the smallest offices, a shared open room with a “sea of desks” and a coffee-area meeting space. The second floor has larger offices and a traditional conference room.
The idea is that startups will begin on the third floor and, if they are successful, move downstairs to a larger space.
While rents in the incubator are intended to cover only the costs of running it, the Murphys will provide for-profit seed capital for those startups who can take advantage of it.
Before it closed last year, Providence’s only incubator was the Brown University-sponsored Rhode Island Center for Innovation and Entrepreneurship in Davol Square.
The successor to RICIE, which opened in August, is the Founders League, a joint venture of Brown, the University of Rhode Island, Greater Providence Chamber of Commerce and startup-accelerator Betaspring.
Founders League has 9,000 square feet of incubator space in 95 Chestnut St., the home of Betaspring and a few blocks away from Weybosset Street in Providence’s former Jewelry District.
Founders League is currently home to 30 startups and 50 people, but there is still plenty of space available on three floors of 95 Chestnut, said Betaspring chief of staff Melissa Withers.
Last week, Kahn, Litwin, Renza & Co. Ltd. announced the opening of the KLR Emerging Business Center in dedicated space in the firm’s Providence offices on North Main Street.
The accounting and business-consulting firm, which also has offices in Newport and Massachusetts, said 10-12 startups and emerging businesses will be selected from applications to move into the center, which has full office space, accounting, technology and recruiting services, as well as a media room for presentations and meetings.
Outside Providence, construction of a new incubator space is 75 percent complete at the Quonset Business Park in North Kingstown.
The Quonset space, also 9,000 square feet, will resemble conventional office space. It will feature 33 one-room offices and two larger 2,500-square-foot suites. Quonset Development Corporation Executive Director Steven King said the space, which will have a common receptionist, kitchen, cafeteria and conference area, is targeted toward everything from startups to traveling salesmen, lawyers and accountants.
The Quonset building is on track to open in June and is already 60 percent leased, King said.
New co-working space called The Hive opens June 1 at the Lafayette Mill Complex in North Kingstown.
“As far as I know this is the first co-working space in southern Rhode Island,” said Tuni Scharter, who has collaborated to launch the project with Web developer Larry Zevon, who will continue to run Zevon Media from an office he already has in the mill complex.
“The economy has forced people who may have been working out of their homes out of their comfort zones, and they’re showing up more at networking events,” Scharter said. “We hope it will create synergy. That’s why we called it The Hive – it’s about cross-pollinating businesses.”
The four offices at The Hive each rent for $265 a month. So far, two of the four offices are leased.
General workspace goes for $20 a day, $65 a week or $225 a month. The conference room can be rented for $10 an hour.
Neil Amper, vice president of commercial brokerage Capstone Properties in Providence, said there have always been small office spaces available in scattered locations, but often potential tenants never found them.
The new incubators now attract entrepreneurs with their visibility, social events and potential for networking.
“New England has always been an entrepreneurial community and there probably [would have] been more demand if people knew where to go,” Amper said.
Daniel Murphy said if things go well in Providence, the family would like to open another incubator in Warwick, where Home Loan Investment Bank moved after leaving Weybosset Street.
“We feel we are leading by example and would like to see more of these endeavors create more spaces like this across the state,” Daniel Murphy said. •


PBN staff writer Rhonda Miller contributed to this report.

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