Urban Land Magazine: Incubating an International Marketplace
Author: Will Macht
Posted: November 23, 2015

Read the original story:

One might not expect to find an indoor, year-round international marketplace in Boise, Idaho. Even less likely would be one four miles (6.4 km) southwest of downtown on a commercial strip in an area where more than 43 percent of the population is below the poverty level and 66 percent have not graduated from high school. Nor would one expect to find one privately developed project that attracted the interest of the Project for Public Spaces, a New York City–based nonprofit organization founded to expand the work of urbanist William H. Whyte to foster lively urban places.

But Lori Porreca, a sociologist, landscape architect, and urban planner, and Miguel Gaddi, an Argentinian architect and urban designer who had practiced in Argentina and worked for the international architecture and engineering firm HDR in the United States, ignored conventional wisdom and saw a different side to an unusual location. After an extensive search in surrounding communities, they found a 2.25-acre site (0.9 ha), with a vacant building damaged by fire, making it affordable to buy from a seller, who financed a third of the cost.

The site had been the Crestlin Plaza retail strip center, which had been vacant for about four years since the fire. It is at the intersection of two busy streets, Curtis and Franklin roads, where about 30,000 cars pass daily, and between Interstates 84 and 184.

The local population had grown by 12 percent in the previous decade, making it one of the most densely populated parts of the city. The area attracts a substantial immigrant population to its more affordable housing, is four blocks from the city’s largest and most diverse high school, and is located ten blocks from a major medical center employer.

Porreca and Gaddi noted that between 1990 and 2011, more than 11,000 refugees had settled in Boise. Among those settling in Idaho in 2011, the top five countries of origin were Bhutan, Burma, Iraq, Congo, and Afghanistan, according to the Idaho Office for Refugees. Instability in those countries and elsewhere has intensified refugee resettlement since then.

Although the marketplace is outside downtown, it is only a 15-minute bicycle ride away and a ten-minute ride from Boise State University. (Lori Porreca)

“Many very talented people were cleaning rooms, driving cabs, and working at fast-food places,” Gaddi says. Many of the new immigrants had run small businesses or had been trained chefs, fashion designers, and artists in their native countries, and many more were seeking to start new businesses.

Porreca and Gaddi, who had lived and worked in many places in the world, had shopped at the indigenous marketplaces in those countries and hoped to create one in this country. They were living in Boise—she working as an urban planner for the Federal Highway Administration and he as an urban designer for HDR—and were motivated to become active social entrepreneurs.

Rather than simply plan and design urban places, they determined that the only way to emulate those marketplaces was to incubate one. This marketplace would channel the inherent skills and dedication of the local people to provide a new service to members of the wider community, who would be attracted by independent international restaurants and cafés that provide unusual foods, groceries, spices, coffees, teas, and brews—as well as handcrafted items made by the proprietors.

Porreca and Gaddi knew that the key to supporting such entrepreneurs was to create a space that was affordable as well as lively. “Profit is the basis of business,” says Gaddi. “We were not interested in starting a welfare model. The tenants are doing this to make money.”

Upfront capital costs for entrepreneurs at the marketplace, named Boise International Market (BIM), are about one-quarter of those for independent spaces in the Boise area and require about half the monthly rent, Gaddi says. But just as important as rental affordability was the targeted search Porreca and Gaddi undertook to find the right operators, as well as the technical assistance the pair provided in planning, design, marketing, programming, development support, permitting, and licensing. They visited refugee resettlement agencies, churches, ethnic community centers, government agencies, nongovernmental organizations, and neighborhood associations, meeting with more than 150 families and individuals to select potential tenants they thought were capable of running businesses that would attract a cross segment of the local population.

The first phase of what they created in the rehabilitated burned-out building is a collection of 29 stalls and shops located in a total of 12,000 square feet (1,100 sq m) of space. Among the businesses is a restaurant serving Ethiopian and Eritrean cuisine started by refugees Kibrom Milash and his wife, Tirhas Hailu. Another is a restaurant serving Middle Eastern food, started by Salam Bunyan, a native of Baghdad, who had worked as a skilled chef for about 15 years in several countries before coming to the United States. Porreca said Bunyan, like many others, had lacked the capital to start a restaurant and the know-how necessary to navigate the U.S. regulatory and financial systems.

Another business is a fashion shop styling and selling women’s and children’s clothing in brightly colored African fabrics, as well as bags, bracelets, and earrings. Veronique Yenga, who runs the shop with her daughter Rita, had been a model in Switzerland before starting a successful home-based clothing design and production business in her native Congo. They became refugees as a result of war there and resettled in Boise.

The developers were able to fit 29 tenants into 9,000 square feet (836 sq m) and reserve 3,000 square feet (279 sq m) for community space. While competitively affordable for tenants, the small sizes yield attractive rents for the developers. (Miguel Gaddi)

Other tenants include a Bhutanese-Nepali grocery started by Nepali refugees; an African market run by a Somali refugee; a tea shop and brewery operated by a retired Specialty Tea Institute executive; a Colombian restaurant; a coffee house specializing in Turkish, Lebanese, Egyptian, and other coffees; a Mexican shaved ice and ice cream maker; a barbecued pulled pork and ribs restaurant run by a Boise military veteran trained in the North Carolina specialty; a meat and sausage market operated by a native Nigerian; a market selling vegetables grown by a Somali refugee; an Eritrean-Ethiopian grain and spice market run by a refugee couple from Eritrea; a health and beauty shop of natural and medicinal products owned by a Mexican native; a shop run by Sudanese single mother Khamisa Fadul offering Nubian and Sudanese baskets, jewelry, footwear, and African clothing; and an Arabic women’s clothing store and a belly dancing school run by a couple of professional dancers.

To Porreca and Gaddi, entrepreneurs like these are very motivated tenants.

The refugees’ unusual backgrounds and talents attract a wide variety of Boiseans and visitors. With Boise’s population of only 214,000 located in a metro area of about 616,000, the low-density environment encourages most residents to drive. The parking area for the market accommodates more than 130 cars, so the location is more accessible to a broader market than would be a site in downtown Boise, which lacks the high number of young professional residents that sustain marketplaces in many other, more urban locations.

Perhaps counterintuitively, the combination of affordability and accessibility, as well as the unusual tenant mix, means that the marketplace can attract a broader cross section of the metropolitan population, from the ethnic populations of nearby immigrant residents to wealthier customers from the wider area. Although the marketplace is four miles (6.4 km) from downtown, the developers also show it in their marketing materials to be 15 minutes by bicycle from downtown and ten minutes from Boise State University, partially along a greenbelt route.

As social entrepreneurs, Porreca and Gaddi say they have not treated this as just another development project. They knew that in order to achieve the economic sustainability of creating jobs and livelihoods for immigrants in a social gathering place for the community, the marketplace had to be adaptable.

The business model had to be simple as well as affordable for immigrants and others starting new businesses. Gaddi was able to fit the 29 tenants into 9,000 square feet (836 sq m) while reserving 3,000 square feet (279 sq m) for community space.

Porreca and Gaddi charge a flat rent based on the size of the space and infrastructure investment required. Rent for annual contracts is only $295 per month for a ten-foot-square (3 by 3 m) space with an electrical connection. Rent rises to $600 for a ten-by-20-foot (3 by 6 m) space with electrical, water, and sewer connections, and to $975 for 12-by-20-foot (3.7 by 6 m) restaurant spaces that have water, sewer, gas, and electrical connections, plus a grease line and interceptor to keep cooking grease from entering the sewers. While competitively affordable for tenants, the small sizes yield attractive rents for Porreca and Gaddi, ranging from about $36 to $49 per square foot ($387 to $587 per sq m) of rentable space. Gaddi says the marketplace generates positive cash flow, and Porreca notes that potential tenants now contact her.

The pair’s business model for tenant improvements was planned to encourage owners to start small to keep costs low and then scale up. The marketplace provides tenants with heating, ventilation, and air conditioning (HVAC) equipment; three walls; and basic utility hookups, depending on business needs. For the restaurants, the developers also installed ventilation exhaust hoods and fire-suppression systems, a dropped ceiling, lighting, and washable wall surfaces.

But the tenants also need to invest in their success and are responsible for their storefronts, equipment such as refrigerators and stoves, shelving, signs, and any additional services they require, such as point-of-sale systems and electrical and plumbing work specific to their equipment. Gaddi and Porreca earlier considered a community kitchen concept attempted by some public development agencies, but determined that the lack of ownership stakes could lead to what economists call the tragedy of the commons—if everyone is responsible, then no one is responsible.

One important piece of advice Porreca received from other marketplace managers around the world was to articulate in writing all roles and responsibilities for both the businesses and property managers, because managing shared spaces and services at a marketplace can be a source of continual conflict. As a result, the market has clearly stated operating rules and responsibilities, including a rotating schedule to clean common areas and a system of fines for rule violations. For now, the market enforces a noncompetition agreement to ensure that the operations are unique and to foster incubating businesses. As the market expands, one might expect the indigenous competition of a marketplace to enrich the selections offered.

The privately developed marketplace attracted the interest of the Project for Public Spaces, a New York City–based nonprofit organization founded to expand the work of urbanist William H. Whyte to foster lively urban places. (Project for Public Spaces/Phillip Winn)

Many business owners obtained microloans from the MicroEnterprise Training & Assistance (META) program of a Boise-based nonprofit program that receives federal funding from the Federal Office of Refugee Resettlement. META, which provides loans that average about $13,000, had many clients that were interested in starting small retail and food businesses and were looking for affordable space and startup support.

Assistance also came from entities such as the Boise office of the Idaho Small Business Development Center (SBDC), the U.S. Small Business Administration (SBA), and the local SCORE office, previously known as the Service Corps of Retired Executives. The developers also reached out to the Hispanic Chamber of Commerce, the University of Idaho Extension office, and several churches and other religious organizations in the Boise/Treasure Valley area that work with various ethnic communities and with entrepreneurs.

The community space includes a 940-square-foot (87 sq m) stage, bathrooms, indoor and outdoor seating, and event space. Porreca organizes a succession of events, which recently have included an annual Peace Corps Festival, an Idaho state legislative forum, holiday bazaars, business networking events, conference receptions, dance classes, African festivals, Latin dance parties, and regular performances by professional and cultural music and dance groups.

Gaddi and Porreca think they have demonstrated that a privately developed international marketplace can be economically and socially sustainable outside urban cores in even unlikely locations in the vast middle city that surrounds urban hearts. “This project energizes an area that has been neglected,” says Gaddi. Other urban planners, architects, and incipient developers might seek to emulate their model.

William P. Macht is a professor of urban planning and development at the Center for Real Estate at Portland State University in Oregon and a development consultant. (Comments about projects profiled in this column, as well as proposals for future profiles, should be directed to the author at