“We get them 90% of the way there, much more than if they just had a gray shell,” says developer Cary Lefton, CEO of Agora Realty & Management Inc. He tells GlobeSt.com that the project is part of the company's commitment to socially-responsible investment. “It's a project that's mutually beneficial. We can hopefully get above-market returns while we're creating opportunity for first-time business owners.” The Pacoima intersection targeted for the concept has a traffic count of over 65,000 per day and bus ridership at 42,000 per day.

The first Agora small business incubator, the Plaza del Valle in Panorama City, has been in operation for 10 years and boasts several success stories, Lefton says. He cites Milo's Pet Shop, a store that grew from its original 300-square-feet to over 2500-square feet, and an Italian restaurant opened by former kitchen workers that now has opened a second location. Over 50% of the original tenants at Plaza del Valle are still in operation there, “especially remarkable since we've just gone through a recession period,” he says.

The 250-square-foot spaces in Pacoima are designed for very small restaurants, and have walk-up windows to service customers from nearby bus stops. The overall plan is to have seven restaurants and 14 small shops in the location, with a mix of traditional tenants and start-ups. The site design is flexible and does not have walls, allowing for easy expansion for tenants whose concepts take off.

Entrepreneurs are attracted through signage, direct mailing to Agora's database, and occasional real estate brokers. “But one of the key things which is unique in how we will market this property is that when dealing with mom and pop-type tenants, they are seldom represented by real estate brokers,” Lefton says. “We're taking more of a residential leasing approach. We'll have an on-site office that's open late afternoons and weekends.”

Lefton says the Pacoima project is privately-funded and doesn't involve the government. Although the project is in a community redevelopment zone, it's not large enough to take advantage of tax credits.

Agora hopes to replicate the concept on a much-wider-basis, although Lefton says that the project is “not very institutional. Equity investors tend to be non-institutional, so it's a significant challenge on a wider basis. But what we can show is above-market returns and a sustainable business model.” The plan is to keep the entrepreneurial sites in the Agora portfolio rather than sell them.

Lefton, whose parents ran a mom-and-pop theatre operation, says that the incubator concept is “definitely a feel-good project. Our tenants are very appreciative. There's a pride of ownership which you usually don't see.”

Agora Realty & Management, Inc. was founded in 1986. Its real estate holdings and projects include shopping centers, business parks, mixed-use retail, office buildings and residential condominiums, and single and multifamily dwellings.