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Free rent incentive for new businesses is changing the future of downtowns

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Posted at 1:28 PM, Nov 01, 2022
and last updated 2022-11-01 16:42:12-04

DENVER, Colo. — In any downtown, it’s easy to see the changes that have resulted from the pandemic. But in downtown Denver, those empty storefronts are becoming new chances.

When you walk into Tea with Tae, a new business in the heart of the city, you are immediately transported to different countries through the aromas and the flavors of their teas.

"This was a once-in-a-lifetime opportunity, I guess, to be able to get the space in such a prime location too," said Taelor O'Dorisio, the CEO of Tea with Tae.

While they are taking customers to other parts of the world, they didn't land on their feet in Denver on their own. Kourtny Garrett is the president and CEO of the Downtown Denver Partnership, an organization working with the city and county, along with properties to bring new businesses to empty storefronts.

"As we look at the future, we are really looking to jumpstart local business, to support our entrepreneurs, and to re-enliven the ground floor and the things that people love about being in a downtown area," Garrett said. "The uniqueness of our program is that A, we are going out and recruiting local entrepreneurs, B, were involving the city and county of Denver that's helping with a lot of the funding, and then were also bringing those landlords to the table with sophisticated leases that guarantee these spaces for these tenants for a certain amount of time."

Each business is getting at least three months of free rent in a prime location storefront. That's in addition to a stipend for things like marketing and design. Director of Economic Development Sarah Wiebenson says we are seeing this across the country, and so to stay relevant, this is the time to help new businesses make those changes.

"I think retail is a very interesting industry because it reflects consumer behavior. So, as consumer behavior changes, retail districts really need to update themselves and think about what will capture people's imagination," Wiebenson said. "It's bringing life back to vacant spaces that were just standing empty for in some cases two years or more."

Tea with Tae is a great example of what can happen across the country. As a new business that started in April of 2020, primarily online, wholesale and direct-to-consumer, they hadn't imagined a brick-and-mortar for quite some time.

"It was something that we were like, 'Oh my goodness. This would be so cool for the business to have a physical location one day,' but that was in my mind five years at least down the road," O'Dorisio said.

Popup Denver sped up that process with subsidized rent, reduced startup costs, and permitting paperwork and access. Those with the partnership say they are creating a handbook for other cities to follow but what’s most important for them to note, are the partnerships between the city and the properties.

"We started the program with five spaces and had over 150 applicants. So, the appetite is there. We just need to build the ecosystems and the support to be able to grow those local businesses," Garrett said.

They are about to embark on phase two and with knowledge of how successful this can be, they want to be a model for other American cities.

"We have the funding to double the program so we will have 10 pop-ups," Wiebenson said. "We really want to bring those lessons to other communities."

They are giving new entrepreneurs a runway to long-term lease-paying success.