This is the third installment in Neighborhood Notes’ series on indie business collaboration through space sharing.
There’s something exceptional happening in the old Pacific Hardware and Steel building on NW Nicolai Street.
More than a century after its construction, Portland-based producers of distinctive, period-specific lighting fixtures and furnishings, Schoolhouse Electric, took up residence in the massive, four-story red brick warehouse, inviting a few friends to help them fill the 103,172-square-foot building.
The old edifice adjacent to the railroad tracks has housed many businesses over the years, but following a comprehensive 2009 renovation, Schoolhouse Electric purchased the property, dubbed it the Schoolhouse Factory, and has since ushered in the most dynamic period in the history of the nationally recognized historic locale.
Founder and owner Brian Faherty has carefully constructed an environment in hopes of making his on-the-edge-of-town, industrial location “a destination.”
To do so, Faherty invited other local, independently owned businesses to share the space, leveraging their audience, products and services to create a collaborative work environment that provides an exceptional experience for customers and collaborators alike.
Leveraging Audience
As Faherty envisioned his future company headquarters, he knew he wanted a coffee shop on-site, not only to create an ambiance and service his own employees, but also to draw customers to the slightly out-of-the-way destination.
Din Johnson, the owner and head roaster at Ristretto Roasters, was attracted to not only the space but also what he calls "the last industrial frontier" and a neighborhood full of artists.
But being an industrial frontier, Faherty understood that the location was not a high foot traffic area, like Ristretto’s other locations. With his collaborative vision in mind, and against the advice of one of his financial advisers, Faherty proposed to Johnson that rent would be free.
"We were looking to leverage his audience as well by putting us in the same building,” Faherty explains. “What we were going to get out of the deal in return for not charging rent was, potentially, customers and just people who were going to come into the space."
Faherty recognized that, aside from setting up shop in a somewhat idle area, Johnson also invested six figures in the build out of the corner coffee shop.
As it stands now, the nascent partnership is still an experiment and the situation may change depending on the results. Faherty alludes to the fact that Schoolhouse will probably charge for utilities in the future, "but in the beginning, we're not charging any rent and we're not charging any utilities because we want to give them a chance to get in and get the word out to their audience, and our audience, that they're here," he justifies.
Leveraging Products and Services
Ristretto provides “more of a social draw,” according to Johnson, but the Schoolhouse Factory is also home to independent designers like Anna Mara, whose floral arrangements spruce up the modern-industrial interior, and Reed LaPlant, who creates handcrafted furniture in his rear workshop.
In fact, LaPlant built the tables in the Ristretto cafe and does all the woodwork for Schoolhouse. Again, Faherty doesn’t charge him rent, and in return, LaPlant is able to charge Schoolhouse less for the casework and small-batch production of tables that he does for the showroom "because we're cutting down on his overhead," Faherty says.
Faherty has directly observed how giving a small business an opportunity can enable it to flourish, which is what he witnessed when he offered Mara the physical retail presence that she desired, free of charge.
“I think she had five weddings last year; so far she has 15 as a result of being over here,” Faherty says.
For Mara, she is excited for the opportunity to “succeed together. It feels wonderful to have such strong local support,” she says.
"I don't charge her anything, but we have fresh flowers in our space," Faherty says matter-of-factly. "It's an experiment. Is that going to work? I don't know, time will tell."
The most visible collaboration in the building is between Egg Press, led by owner and letterpress expert Tess Darrow, and Schoolhouse as the two have teamed up to produce a line of handcrafted designs for sheets, lamp shades, pillows, upholstery, dish towels and more, which are sold exclusively by Schoolhouse Electric.
Again, Faherty explains that Egg Press, which resides on third floor above Schoolhouse Electric’s showroom, didn’t pay rent for the first year "because they put some of their own improvements into the space."
“The rent that they are paying is pretty inexpensive because there's a lot of, again, collaboration with textiles and other things that they do for us," Faherty says. "The money that they are paying is really more going towards utilities and maintaining the building as opposed to some sort of profit center."
Providing An Exceptional Experience For Customers and Collaborators
The energy inside the Schoolhouse Factory is great, and Johnson believes this intangible can take business to another level.
"That's the idea here in this building: It's people that are doing and creating stuff locally," he says, while generating a good, cohesive experience for the customers.
"What we're getting is the cross-pollination of business—creating this little community that's able to bring in customers that have different needs," Faherty says.
The rent-free policy may “increase the odds of this quirky location working” for everyone involved, Faherty says. And Schoolhouse is able to afford this experimentation because, “I bought building for a good price, and we have fixed taxes because it's historic property,” Faherty continues.
“With this business, I wasn't looking at this building as a financial instrument, where I could monetize space, I was looking at it more from the standpoint of... synergistically, how could we bring the right group of people together,” Faherty explains. “And furthermore, almost in an experimental form, just see how we could coexist here and benefit and graft off of each other without this being monetized—there are other exchanges. There are other considerations but it isn't necessarily money. That can be difficult for a lot of people [to grasp]."
Yet, through a belief in collaboration and confidence in one another, Faherty and his collaborators have established an imaginative model that looks to create a sustainable, cooperative business community within the old brick warehouse.
