As boomer owners prepare to sell, a push for workers to buy

 

Your company’s next owner could be sitting in a cubicle down the hall, assembling parts on a factory floor or laboring on a construction site down the street. That, at least, is the hope of a burgeoning movement concerned about what will happen to the thousands of small and mid-sized businesses owned by baby boomers in Central Pennsylvania.

Most, if not all, of those owners will be looking to sell their companies over the next few years.

While many will turn to family members, industry peers or even private equity firms, an effort led by a Lancaster-based nonprofit is hoping owners will at least contemplate handing over the reins to employees.

“Widespread ownership transitions in our community offer us an opportunity to harness the moment to retain local jobs, root wealth locally and maintain a vibrant local economy. Employee ownership structures are a powerful way to do this,” said Craig Dalen, director of impact business strategy at Assets, the nonprofit that is leading the charge to spread awareness about employee ownership.

The nonprofit is describing the wave of anticipated sales as a “silver tsunami.”

At stake is the fate of roughly 11,550 businesses employing nearly 135,000 people in Berks, Dauphin, Lancaster, Lebanon and York counties, the areas covered by Assets, according to data the nonprofit gathered from the most recent U.S. Census survey of small-business owners, taken in 2012. The region’s boomer-owned companies represent $30.87 billion in sales and $4.79 billion in payroll.

 

 

 

 

As it looks to put employee ownership on the menu of exit strategies, Assets is collaborating with local lawyers, advisers and business owners, as well as an Oakland-based nonprofit, Project Equity, that is undertaking similar campaigns in other communities around the country.

Employee ownership remains relatively rare. Out of nearly 6 million companies of all sizes nationwide, just under 7,000 are held by employee stock ownership plans, or ESOPs, one of the most common vehicles for selling a business to its workers, according to the National Center for Employee Ownership. Another 1,000 companies operate under other forms of employee ownership, Project Equity estimates.

Employee ownership is not a fit for every business, its advocates acknowledge. And it is not the only way to preserve local control. Passing a business from a parent to a child or children, for example, also keeps wealth and ownership in a community.

But it is better than simply shutting a company down, which is often the path of least resistance, or selling to a third party from outside the community, said the co-founders of Project Equity, Alison Lingane and Hilary Abell

“Typically that means you’re going to lose at least some portion of the jobs in administrative and back-end operations,” said Lingane, noting that a company’s spending and profits also may leave the community after a sale.

Advocates of employee ownership want to ensure departing owners are rewarded fairly for what often represents their life’s work. But they also hope owners will value other factors besides the final sale price.

“The problem is that many advisers are pushing cash and that becomes a proxy for value,” said Ed Renenger, an attorney and ESOP specialist with Reading-based law firm Stevens & Lee. “In our experience if a business owner receives enough cash consideration to take care of their personal, family and charitable needs, it frees them up to think about other value drivers. There are lots of owners that find value in other things, such as legacy, community and employees.”

A sale to employees often entails risk and complications that don’t arise during a sale to a third party, Renenger and other advisers acknowledged. But the complexity ultimately is no greater than it is for a more typical sale.

“The reality is that the transition of a business to a third party, with the exception of an intergenerational transfer, is a very emotional event for the owner,” Renenger said. “It’s a complicated transaction that involves a detailed examination of current operations, current compliance with the law, current financial statements in ways that may feel very intrusive, and a sale to an ESOP is not unique in that.”

The ESOP, however, creates an opportunity to reward employees and preserve a business owner’s legacy, advocates said. And there are tax benefits, Renenger said. For one, an ESOP is considered a retirement plan, so a company that buys stock for its employees via contributions to an ESOP can use pre-tax dollars to do so, just like it would if it were making contributions to an employee’s 401(k) account.

Employee ownership also dovetails with changing expectations for the workplace, said Roger North, president of North Group Consultants Inc., a Lititz-based leadership consulting firm.

After World War II, workplaces followed a command-and-control approach fashioned along military lines, North said. Employees mostly accepted decisions handed down from above.

People entering the workplace today expect to have greater input into decision-making, he said. An ownership stake, whether held by children or employees, can help sharpen that input.

“My observation would be, if you don’t shift to that way of thinking, particularly over the next 10 to 15 years, you’ll likely be behind your competition,” North said.

 

 

It’s a way of thinking that has become ingrained at business software company Cargas Systems Inc. Employees have owned a growing stake in the company since 1998, said founder and CEO Chip Cargas.

Cargas now owns about 40 percent of the company. About 70 of the firm’s 100 employees hold the remaining 60 percent. Employees have two opportunities a year to buy at least $600 worth of stock. Shareholders help elect the company’s board, but all employees have access to the company’s financial performance and profit-sharing bonuses and other perks.

Cargas may no longer be the majority owner. But, he said, he feels he has a more engaged workforce and a sustainable company where people want to work. They pitch in when times are hard and celebrate when times are good.

“When we started employee ownership, I was 100 percent owner of a small pie,” he said. “Today I’m the 40 percent owner of a much larger pie and 40 percent of that much larger pie dwarfs the 100 percent of the smaller pie.”

The pie, he said, would not have grown as large without the effort and engagement of employee-owners. “Yes, we have a hierarchical organizational structure with titles and whatnot, but the way we operate is so collaborative,” he said.

And Cargas doesn’t have to fret about what will happen to the company when he retires. The succession is already under way, allowing employees to focus on customers.

“We don’t need to be worried about shocks to the system from huge ownership changes,” Cargas said.

 

As they move ahead, Assets and Project Equity plan to do more than raise awareness. Their goal eventually is to conduct feasibility studies for companies interested in employee ownership and to work with them to make it happen. Details are still being worked out, Dalen said.

Project Equity already has undertaken several transitions in the San Francisco area and has been developing studies for companies in western North Carolina, where it is working with a local partner called Industrial Commons, Lingane and Abell said.

The chief risks for retiring business owners include ensuring employees are prepared to become owners, both mentally and financially.

“Most small businesses are looking to rely on key employees who have management potential, who can keep the ship sailing and keep things going,” said Peter Kraybill, an attorney and leader of the corporate practice group at Lancaster County law firm Gibbel Kraybill & Hess LLP.

The key employees also need money to pay for the business. It typically involves a combination of debt and a promise to pay the selling owner over time as the buying employees acquire ever-greater chunks of the company, Kraybill said.

Among the risks is less-than-complete payment to the seller, especially if the new owners stumble during the transition, Kraybill said. The new owners may not buy in at the original rate preferred by the seller, or they may not earn the full confidence of customers.

“It’s quite a bit to navigate for an owner,” Kraybill said. “There are a lot of nervous-making moments.”

But, he said, there is a risk when a business is sold to an outside party. A third party could require payments over time instead of in a lump sum, and it may run the company very differently.

“That’s also a risk to a departing owner who very often, particularly for small businesses, has built this as their life work,” Kraybill said.

Increased scrutiny seen to benefit B Corps

Members of the coLAB team, from left Kate Gallagher, Courtney Rinden, Caitlyn Bordon and Bree Gillespie hosted a celebration Nov. 29 to commemorate the company’s certification as a B Corporation. Based at Lancaster coworking space the Candy Factory, coLAB is a consulting firm that helps nonprofits. – (Photo / Amy Spangler)

The owners of The Stroopie Co. didn’t need a label to let customers know they wanted to make more than profits and cookies. But they decided to pursue one anyway.

The business, which bakes and sells crispy Pennsylvania Dutch cinnamon cookies, was founded in 2008 with a mission of providing employment to refugee women. Jennie Groff and her husband, Jonathan, doubled down on that cause when they assumed ownership of the business in 2010, even taking the top prize in The Great Social Enterprise Pitch, a local competition for socially responsible businesses.

The Groffs decided to take the company’s mission one step further by becoming a certified Benefit Corporation. The certification, also known as B Corp certification, comes from B Lab, a Philadelphia-area nonprofit that combs through companies’ operations for evidence of socially and environmentally responsible business practices.

The Stroopie Co. is now one of 56 Pennsylvania businesses to boast B Corp certification. The Groffs see the recognition as a formalization of their for-profit company’s commitment to a cause.

The certification, though, exists outside of any legislative framework and carries no direct legal or financial benefits. And business owners that opt to pursue it have to pay fees based on the size of their company and, in many cases, commit dozens of hours to the application and documentation process. They must also adopt enough B Lab-approved procedures — like offering employees paid time off for volunteering or creating written policies for prioritizing local vendors — to receive the requisite 80 of 200 possible points on B Lab’s assessment.

The commitment needed to pass muster with B Lab — on top of the fact that certification carries no promise of financial benefits — might be why The Stroopie Co. is one of only four midstate businesses that can boast a B Lab seal of approval. Other companies have gained certification over the years but were not recertified, another level of scrutiny to which B Corps have to commit every several years.

The expense in time and resources has not dissuaded the Groffs. Nor has it dissuaded a growing number of other business owners, mostly in Lancaster County, from chasing the B Corp label. At least 70 businesses in and around Lancaster have taken an initial assessment this year, with hopes of either becoming fully certified or at least learning some good business practices from the process.

Many feel that adding an additional layer of scrutiny to their practices is simply the right thing to do.

“These businesses we have in our hands are incredible gifts to nurture and use well,” Jennie Groff said. “This is just one more way we can do that.”

Good for business?

Central Pennsylvania’s other three certified B Corps are consulting firms Work Wisdom LLC and coLab Inc., and painting contractor Two Dudes Painting Co. All four companies are based in Lancaster.

Leaders at these businesses said they, like Groff, felt that B Corp certification provided an extra layer of authenticity to social and environmental practices they already had in place.

Two Dudes is the oldest and largest of the midstate’s B Corps, with 53 employees and a history dating back to 1987. Company co-founder Peter Barber started pursuing the B Corp certification around early 2016 before receiving the official approval in September of that year.

The biggest hurdle in the certification proved not to be implementing major policy changes, but rather documenting informal practices and principles that already existed, Barber said. The company, for example, had a general preference for local vendors before starting the certification process, but had no written buy-local strategy. It also tried to save energy where it could, but had never formalized a framework for doing so.

“There’s nobody out there that’s going to tell you their business doesn’t care about the community, they don’t care about their workers. Everybody is going to talk the game that they’re doing that kind of stuff,” Barber said. “How do you create very definitive standards?”

Kate Gallagher, CEO of coLab, and Kedren Crosby, president of Work Wisdom, say they had similar experiences.

Both consulting firms were founded specifically for the purpose of creating positive social impact — coLab through consulting services for nonprofits, and Work Wisdom through consulting services for socially responsible organizations. But putting everything into writing, they said, took time.

Crosby estimates the process took her company about four months from start to finish before it received certification this past March. Gallagher’s firm, which was already legally structured as a benefit corporation at the state level, received its certification this November after several months of trying to find time for the process while juggling all of the other obligations that come with running a business.

That’s not to say they did not have to make any changes. Gallagher, for example, added a money-back guarantee into coLab’s contracts — a big step for a consulting firm that might devote months of services to a single client.

Gallagher, Crosby, Barber and Groff all say the process was worth the effort — and not just for the privilege of putting a B Corp certification logo on their websites.

While Two Dudes cannot attribute any increase in business directly to its B Corp certification, Barber said, the process of taking B Lab’s assessments and learning how to formalize certain business practices likely made the company more efficient.

“Has it gotten us more work? I don’t know,” Barber said. “Has it made us more profitable? It may have.”

B Corp certification also adds a layer of formality to a company’s business practice if it ever needs to bring on new investors or sell to a new owner, Groff said.

On top of that advantage, the label has given Stroopie an avenue through which to share its story with other companies looking to make a positive impact in their communities.

“I kind of have a family of other businesses that are working toward similar things,” Groff said.

Lancaster leads the way

All four of the midstate’s B Corps call Lancaster County home. The Lancaster area, in fact, ranks second in the state for total number of B Corps. Only Philadelphia — which hosts 25 — has more.

The nonprofit ASSETS sits at the hub of much of the county’s B Corp buzz. The Lancaster-based organization, which offers business development programs focused on addressing social disparities, has been educating the businesses with which it works about the certification, encouraging them to at least go through B Lab’s initial impact assessment.

The free assessment is catered to businesses based on factors like size and industry and generally takes between one and three hours to complete, according to B Lab. It gives companies a framework through which they can start thinking about ways to improve their social and environmental impact — even if full certification is not in the cards.

The assessment is also a key tenet of B Lab’s Measure What Matters program, which provides guidelines for organizations like ASSETS that want to help businesses find quantifiable, concrete ways to increase their positive social and environmental impact while increasing profits.

ASSETS hopes to see 10 percent of Lancaster County’s 12,000 to 15,000 businesses take the assessment in the next three to five years, said Craig Dalen, a former B Lab employee who now serves as ASSETS’ director of impact business strategy.

Dalen also hopes to see between 120 and 150 businesses go on to gain full B Corp certification.

It is a lofty goal, but one Dalen feels confident Lancaster County’s businesses will meet. The county already has a strong record of corporate responsibility, he said, as evidenced by companies’ contributions to events like The Extraordinary Give, a countywide effort that raised more than $8 million for local charities in November.

Dalen knows the full certification process can feel daunting, both to small business with few resources to spare and large companies with complicated procedures that might take significant time to change. But he feels confident businesses will rise to the challenge — for the sake of both their communities and their own bottom lines.

B Corp versus benefit corporation

Not all B Lab-certified B Corps are legally structured as benefit corporations, and not all benefit corporations are B Lab-certified B Corps.

Business owners can structure their companies as benefit corporations or benefit LLCs under Pennsylvania law, in much the same way that they can choose to be S corps, C corps, sole proprietorships or any other kind of business.

Legally defined benefit corporations must submit annual reports to shareholders outlining the ways in which they contributed to the public good. These reports are also shared with the state, making them a matter of public record.

The benefit corporation structure is available only at the state level, and only in certain states. Companies registered as benefit corporations in their home states have to register under different business structures — like LLCs or C corps — at the federal level.

B Lab’s B Corp certification, on the other hand, is a label that has no ties to a business’s legal structure. It is similar to the LEED certification for environmentally friendly buildings in that it is connected not to legal requirements but rather the standards of a non-governmental nonprofit.

B Lab strongly encourages its certified B Corps that are not structured as benefit corporations to pursue becoming one in states that offer the option to do so.

Lancaster B Corps

The Stroopie Co.
Description: Cookie maker with an emphasis on hiring refugees
Number of employees: Seven
Founded: 2008
B Lab-certified: May 2016

Two Dudes Painting Co.
Description: Commercial and residential painting company
Number of employees: 53
Founded: 1987
B Lab-certified: September 2016

Work Wisdom LLC
Description: Consulting firm with a focus on workplace culture
Number of employees: Zero (Six consultants provide services as independent contractors)
Founded: 2015
B Lab-certified: March 2017

coLab Inc.
Description: Consulting firm with a focus on nonprofits
Number of employees: Four
Founded: 2014
B Lab-certified: November 2017

For more information

Business owners can take B Lab’s free impact assessment test at bimpactassessment.net/assets. Creating an account on the site will also put the test taker in touch with ASSETS, which can answer further questions.

ASSETS is also hosting a series of seminars over the next several months focused on socially responsible business practices. More information is available at assetspa.org.

ASSETS works primarily with companies in Lancaster County but is also able to provide guidance and resources to businesses in other parts of the midstate.

Building Equity in Response to Racism

At ASSETS, we have a vision of an equitable, ethical and prosperous community.

Our goals include working toward parity in business ownership for people of color, who are significantly underrepresented in Lancaster’s economy and would need to start more than 1,000 businesses to reach parity. We also know this disparity is systemic in nature – people of color have less personal wealth and access to capital, creating significant disadvantages when starting and growing a business. This systemic inequality informs our programs, our investments and our work at ASSETS every day.

So when white supremacy reared its head in Virginia a few days ago, it hits squarely against our mission. In the spirit of building a more equitable, ethical and prosperous community, we think there is so much more we can do here, and across the country.

If you want to join us in building an equitable economy, one easy step is to support local businesses owned by people of color. We have a directory that allows you to search for businesses owned by people of color, women and social enterprises so you can be intentional with your purchasing. This by no means discredits businesses owned by white people – it just names the inequity and some of the root causes of it, and seeks to repair it through intentional investment. We work with entrepreneurs – people of color, refugees, white folks – who are seeking to use their business for as much good as they can, including hiring people with barriers to employment, improving employment practices and reducing their environmental impact. The opportunities for us to do better – no matter our background – are endless!

So while we denounce white supremacy and racist acts, we know that standing up for a diverse community requires more than words – we need to work together to support these diverse businesses so our economy can better reflect our community.

-Tina Campbell and Jonathan Coleman, Co-Executive Directors

Lancaster Works at ASSETS: Transforming Communities One Good Job at a Time

Since our founding in 1993, ASSETS has supported hundreds of entrepreneurs and small business owners by providing access to the resources they need to succeed!  We are excited to announce the addition of another tool to the ASSETS tool-belt—Lancaster Works at ASSETS, LLC.

LANCASTER WORKS is wholly-owned by ASSETS, and is Lancaster County’s first and only full-service pending B Corporation social enterprise employment agency.  Our focus is to provide career placement and wrap-around support services for local residents who might otherwise struggle to find meaningful work that pays a livable wage.  Our services enhance each worker’s ability to succeed in identifying and navigating a path towards their goals!

As valued service providers, employers and contributors to the local economy partnering with Lancaster Works will enable you to more effectively and efficiently meet your organizational goals, as well as the personal goals of the individuals you serve and employ.  Additionally, you will be joining a powerful network that aims to not only to meet, but to exceed the challenge of the Mayor’s Commission to Combat Poverty—to reduce poverty by 50% in Lancaster City.  The Lancaster Works model will prove to be a vital tool in far exceeding that goal.   Replication of the Lancaster Works model will make it a powerful tool in transforming communities throughout the country.

As a social enterprise and pending B Corporation, our “Triple-Bottom-Line” approach will focus not only on Profits, but more importantly on People and Planet.  We are making people a priority and creating a legacy that will benefit present and future generations!

To get involved, contact tyrone@lancaster.works for more information.

 

Lancaster Works at ASSETS, LLC
100 S Queen Street
Lancaster, PA 17603

lancaster.works

Together, we can build an economy that works

Picture a group of 10 Lancaster entrepreneurs starting or growing their businesses. They are a more diverse group than you often see in Lancaster—4 are African American, 3 are white, 2 are Latino and 1 is African. They all have one thing in common: They are entrepreneurs with a dream of improving their lives by starting a business of their own.

You know how risky starting a business can be. Imagine, then, the risk involved in not only being responsible for a loan of your own, but also guaranteeing the loans of 9 other individuals. But that’s what they did. Through ASSETS’ Lending Circle program, entrepreneurs support each other for a full year of business growth. They commit to each other’s success. They improve their credit and access traditional capital. They formalize their businesses and increase their income. They increase the diversity of Lancaster’s economy. And they do it together.

This is the power of ASSETS, which you help to make possible with your financial support.

With your help, ASSETS supports businesses and helps to create thriving wage jobs. Through your generous support, ASSETS helps local businesses be a driving force for good. And it is not just the Lending Circles that are working.

We are:

  • Training social enterprises through the Great Social Enterprise Pitch to hire refugees and people with barriers to employment.
  • Helping women start and grow businesses through the ASSETS Women’s Business Center to achieve parity in business-ownership.
  • Working with existing for-profit companies to Measure What Matters – to consider their social and environmental impact in the community in new ways—through restructuring businesses to offer employee ownership, diversifying leadership and management structures, adding more local women-owned or people-of-color owned businesses to their supply chains, and becoming certified B Corps.

The BBC has called Lancaster “America’s Refugee Capital.” If we can resettle 20x more refugees than any other place in the country, we believe that we can build an economy with the highest rates of women- and people-of-color-owned businesses and the most B Corps per capita. Will you help us work toward this vision?

Together, we can build an economy that works.

Your donation will help us meet our $40,000 fiscal year-end goal and continue to build an economy that works for all. You can give on-line today!

Lancaster City on the Rise

It’s Friday night and the Horse Inn is packed. There’s a wait for a table in the main dining room and the front bar is filled with pairs of diners and drinkers sipping on craft cocktails — perhaps a “Call to Arms” (Rittenhouse rye, Zaya rum, ruby port, boiled cider, pressed lime, Angostura) or a Doctor’s Orders (Market Alley gin, house tonic, basil, cardamom, grapefruit water) — and local craft beer.

It’s a scene that could be replicated in almost any major metropolitan area in the country: buzzing voices, plenty of dapper young urbanites, vintage jukebox, nostalgic bar games and low lighting.

But in other ways, you could be nowhere else but Lancaster City. The menu is rife with products from local farms. This is an eatery just as comfortable serving galumpkis (traditional stuffed cabbage) as it pairing pork shoulder with kimchi fried rice. If you watch long enough, you realize just how many folks seem to know each other. When a young couple gets engaged two tables over, the whole restaurant explodes in applause. The Horse Inn has actually been a drinking establishment since the 1920s, and while the new owners have spruced up the interior — horse stalls from its original use as a hayloft house booths — the space’s essential spirit remains untouched. It’s a classic Lancaster story: taking something old and good, and making it better.

That narrative is being replicated all across this Pennsylvania city. A new generation of locals, transplants and repatriates are transforming this compact burg, shifting the reputation of a metropolis that’s long been in its famous county’s bucolic shadow.

HOMECOMING

Ryan Martin, co-founder of Infantree, a local marketing and branding company, can trace his Lancaster heritage back 13 generations, but that didn’t stop him from moving away after college — first to Philadelphia, then to Harrisburg.

“Growing up in the county — Strasburg, which is southeast of the city — we didn’t have a whole lot of reasons to come downtown, except for Central Market on Saturday mornings,” he recalls. “My grandmother had a stand at Market for 60 years. She sold flowers. My grandfather was a grower. My parents were florists. That was the best part of Lancaster City for me, coming downtown to be part of that community on Saturdays.”

During those years away, Martin started to hear murmurings of a change happening in his native land. That tight-knit community he recalled from his youth felt like an opportunity. He moved back and eventually teamed up with Ryan Smoker, launching Infantree out of a fourth-floor loft above Prince Street Cafe. The popular coffee shop became both their landlord and their client. The company’s team has since grown from two to 12, serving the growing slate of local retail boutiques, breweries, distilleries, restaurants, city organizations and nonprofits.

Lancaster Central Market

“Over the last 15 or 20 years, but really in the last eight years, we’ve seen a real significant change downtown,” says Martin. “Galleries came in and started a little bit of a groundswell. We saw some refreshed boutiques coming in. The restaurant scene followed quickly on its heels. Businesses actually wanted to move from the suburbs to find locations downtown. With that came micro-industries: distilleries, breweries. All the clients that we serve. It’s been wild to be a part of that.”

Being a local also has its advantages.

“All of the work we’ve done from a branding and marketing perspective has been through word-of-mouth referral,” he continues. “We’ve built a business on this community. I’d say 60 to 70 percent of the work that we do is within a 30-mile radius of our downtown office.”

Last year, Martin and Smoker actually became their our own clients, opening Ellicott & Co., a shop on Market Street selling American-made men’s clothing and accessories. The pair works with local makers — leatherworkers, metalworkers, textile workers — to stock their shelves.

The city is proving to be a fertile place for fledgling companies to find a toe-hold. Technology startups have a host of affordable office space and coworking options to choose from including the ever-expanding Candy Factory (profiled in our first feature on ‘The New Lancaster’) and PubForge. The latter, located above beloved bar and music venue Tellus360, is geared towards technologists: developers, programmers, designers.

One former tenant is Matthew Ranauro of BeneFix, a startup that simplifies the health insurance market for small businesses. He is another repatriate, having moved back to his hometown after stints in New York, San Francisco and Boulder, Colo.

“Being back here, it’s unbelievable,” says Ranauro. “The community is super tight. There’s definitely a lot more tech than when I grew up here. I can’t really ask for a better place, especially in this industry.”

Since last fall, BeneFix has quintupled their client list and, in doing so, outgrew Pubforge. But they didn’t go far, moving into a 2,400 square foot space on S. West End Avenue.

STREET LEVEL

Mayor Rick Gray has witnessed Lancaster City’s evolution firsthand: He’s lived in the same house on Prince Street — what he calls “the best $18,000 he ever spent” — for 44 years.

“During a lot of those years, you’d look outside at 11 p.m. and there was nobody on the street,” he recalls. “Now, if I go outside at 11 p.m. and look up and down Prince Street, there are people on both sides of the street walking. People have come back to the city. I think that’s true of a lot of our cities: I hear it from York, I hear it from Harrisburg, Bethlehem, Easton.”

The mayor credits two specific demographics with repopulating downtown: young people and baby boomers.

When it comes to millennials, “they want to be in the city,” he says. “I grew up with Leave it to Beaver, Father Knows Best — TV shows that represented suburbia as the promised land. My kids grew up with Sex and the City, Seinfeld, Friends. All urban settings. They want walkability. They don’t want car dependency. I can walk to 30 restaurants from my house.”

Meanwhile, many empty nesters are tired of mowing grass. They also want to ditch their cars, especially as they age. Downtown development reflects that demand: apartments and condos are being built that specifically target those 55 and older.

New lofts in Lancaster City

Gray, whose wife is an artist, also credits the vibrant arts scene with downtown’s resurgence.

“We have work by Lancaster artists hanging all over City Hall,” he says. “There have always been a lot of artists here because of the affordability and easy access to the major markets. In the last 10 to 15 years, [we went] from a wholesale market to a retail market. I know locals now that can make a living being an artist, which is a difficult thing to do.”

Jeremiah Linton

After graduation, Linton spent two years in Philadelphia, but Lancaster drew him back.That creative energy translates to craftspeople as well. RudeWood Design‘s Jeremiah Linton grew up in South Jersey. He met his business partner Alex Rudegeair at Thaddeus Stevens College of Technology in Lancaster where they both studied carpentry. These days, the duo does custom woodwork with a focus on commercial restaurant and bar furniture.

“I moved [to Philadelphia], and was networking and working with different people,” he recalls. “When I moved away, I was like, ‘I didn’t make any lasting connections.’ But in the two years I’ve been here, I’ve made a lot of friends, built a lot of relationships. I think the business community in Lancaster is really into helping each other out. When one of us is successful, we can give back to the others in some kind of way.”

Rudewood is based out of an old printing facility, and they’ve created an impromptu collective, renting extra space to other artisans. Most of the company’s work is local. Very local.

“All of the jobs we’ve done in Lancaster City, we’ll walk there,” he says. “I think we’ve benefited a lot from coming here instead of staying in Philly.”

CITY LIVING

From old manufacturing facilities to heritage homes, there are all sorts of unique spaces on offer in Lancaster City. The built environment — well-lit sidewalks, historic buildings, industrial relics, charming brick rowhomes — can surprise visitors familiar with a Lancaster County brand based on buggies and dairy cows. Notably, the city boasts dozens of old tobacco warehouses that have survived and been converted into work and living spaces.

The Nimblist offices in Lancaster City

“It was the best thing we’ve ever done,” she recalls. “We really wanted [a living space] that would fit into our creative aesthetic as a couple and was more unconventional. We had looked and looked for a warehouse space and found the space that we have now. It has such a creative soul and energy to it. I knew the minute we walked through that building, it was where we were meant to be.”One of those loft-livers is Deborah Barber. An employee at Nimblist (formerly Performance Environment Design Group), Barber moved to the Harrisburg area after college, where she met her husband. Twenty years ago, they moved to Lancaster County and then, seven years after that, into the city.

Until last year, Barber’s work was still in the capital, but she wanted a job closer to home. Nimblist is a perfect example of the kind of mid-sized, creative-economy company that thrives here. The seeds for the enterprise were sown almost 20 years ago by Spike Brandt — who’s local to Lancaster — and L.A.-based Justin Collie. They met as roadies and came up through the lighting and design world. The business, which creates environments for live events, has since grown to about 20 employees. Clients include the NFL, musical acts, the Robin Hood Foundationand the SyFy network. The company is part of a booming event production industrycentered around Lancaster City and nearby Rock Lititz.

Deborah Barber

As Nimblist grows, the staff is evolving.

“When I came in, pretty much everyone was local,” recalls Barber. “Since I’ve been here, we’ve hired and relocated two people from out of state. We have a third person slated to start with us [last] December who is moving from another country. We have a fourth person who we hired as a result of her partner being relocated to TAIT [in Lititz].”

Barber thinks there are still things Lancaster City could do to ease the way for those transplants.

“One thing I’ve noticed and heard from our staff is that we don’t seem to have many realtors who handle the rental market,” she explains. “We’re looking for highly-skilled programmers and lighting designers — it’s a competitive market. It’s not easy to find those people, and when you do find them, I need to be able to tell them there are some cool places for them to live and a range of cool places for them to go out and eat.”

Part of that mission includes dispelling preconceived notions. Fortunately, often all it takes is a visit.

“We rent out one of our rooms on Airbnb,” says Barber. “The people we’ve had stay all say, ‘We had no idea that Lancaster would be like this’ or that ‘you have so many cool places,’ or that ‘living spaces like what you have exist.’ If you want that funky warehouse, there are those spaces. There are condos. There are single-family homes that are gorgeous and historic. And there are really quaint rowhomes that people have taken and redone.”

DINING OUT

If all it takes is exposure to fall in love with Lancaster City, then Susan Louie and her husband Rafael Perez are Exhibit A. Before opening their charming French BYOB Citronnelle, the longtime New York City residents experienced the city via friends who moved south.

Citronnelle in downtown Lancaster

They purchased the property on Orange Street in 2009, moved to Lancaster City permanently in 2012 and opened Citronnelle in 2013. The couple were not experienced restauranteurs: Louie was fashion designer and her husband a chef. They had to learn the business from scratch, and figure out what exactly people wanted to eat in this part of Pennsylvania. The team buys everything locally, mostly from nearby Central Market. Seasonal ingredients go into dishes like grass-fed, pasture-raised New York strip with a mushroom-and-potato roulade or their signature creamy crab croquettes, served on a bed of cucumber salad and topped with yuzu wasabi aioli.“We started visiting them and fell in love with the place,” recalls Louie. “We bought a [weekend] house, but weren’t fully committed yet. We were both still working in New York. Then we saw this building — which was an abandoned print shop — and thought, how about changing our lifestyle?”

“We don’t have shoo-fly pie here,” explains Louie with a laugh. “We don’t have buttered noodles…We see a lot of people who come in here a little trepidatious. They read an ingredient on the menu and aren’t sure what it is. But we’re so happy to explain it to them. We’re not an uptight restaurant. We’re not hoity-toity — we just want to feed people. And if they learn a little something about what they’re eating, it’s great.”

Fortunately, a growing number of eateries are catering to the city’s changing palette, whether it’s students looking for fast-casual poke at Chop Sushi or couples nibbling on Neapolitan pizzas at the perennially packed Luca. The restaurant community knows that the city’s growing reputation as a foodie haven benefits them all.

“In New York, there are so many restaurants that you can’t really get to know anybody; they come and go so fast,” says Louie. “We’ve made friends with so many other restauranteurs. They’re so supportive of us, especially because we’re so little and just starting out. There’s a really nice sense of community here.”

Daniel Falcon is another local restauranteur. He came to the area from Puerto Rico 38 years ago when he was two. It is hard to tell the story of Lancaster City’s resurgence without talking about the Latino population which makes up almost 40 percent of the municipality’s 60,000 residents. They are an essential part of the small business community, whether that’s running neighborhood groceries or contributing to the diversity of downtown offerings.

Falcon was always trying to find a way to work from himself, growing a mall kiosk business into four clothing stores before changing course and getting into two of the city’s booming industries: real estate and night life. In September 2014, he opened Lancaster Cigar Bar on King Street. He has since bought up more property in the same building, launching Old San Juan Latin Cuisine and Rum Bar, and is hard at work on another concept across the hall: a neighborhood pub with a Prohibition-era vibe.

Crab croquettes at Citronnelle

“Lancaster has a solid economy, and one way to attract young professionals to your city or town is to give them something to do when they’re done working,” he explains. “I think Lancaster is doing a good job at providing night life. I think we can do better, and we’re on our way there. I think the local government has been pretty supportive of that whole idea.”

Susan Louie and Rafael Perez

“There seems to be more a demand for people wanting to live in the city,” he says. “People are actually selling their homes in the suburbs and moving into the city. Once that started happening, the demand for higher-end rental properties went up. Investors are meeting those demands. I’m in the rental business, so that’s what I’m doing with my units. I’m fixing them up and making them a little nicer, collecting more rent as well.”While the city’s growing population is obviously great for Falcon’s bars and restaurants, it has also impacted his real estate investments.

Nicole Vasquez is another young Puerto Rican entrepreneur. She grew up in Lancaster City, spending most of her childhood on West King Street. From a young age, she loved fashion and dreamed of opening her own clothing boutique. Flash forward to 2012, when she launched That Shuu Girl at the tender age of 25.

“Something I love about downtown Lancaster City is you don’t see any franchises,” she says. “When you go into a small business, you’re pretty much meeting the owner and you feel welcome, you feel comfortable.”

Vasquez credits local groups like the Lancaster City Alliance and ASSETS’ Women’s Business Center with helping her figure out how to run her business and connect with local designers.

Luca in Lancaster City

That reliance on community — both in terms of organized resources and likeminded peers — was something repeated again and again by residents and business owners.

“I have found an absolute love for the community here,” says Martin from Infantree. “If you do right by them, they take really good care of you. We’ve been able to survive because of the whole ‘buy local’ thing. Lancaster has a whole different appreciation for it: People here want to support anything that is authentically Lancaster.”


LEE STABERT is editor-in-chief of Keystone Edge. Tell her your favorite things about Lancaster @stabert.

This is the second installment in a series of stories Keystone Edge will be publishing on the evolving identity of Lancaster (read the first feature here). This content was created in partnership with the Economic Development Company of Lancaster County and partner organizations.

All images by Lee Stabert

Nimble Thimble gets NuLife: Downtown sewing shop opens door to a program for at-risk women

ASSETS client and participant in the 2015 Great Social Enterprise Pitch, NuLife, is making news!


Schirlyn Kamara, left, runs a nonprofit called NuLife that makes and sells recycled fabric products. They are going to take over most of the space occupied by Nimble Thimble, owned by Mort and Ruth Nierenberg, both pictured, and are receiving help from Millersville University students who are remodeling and repurposing the space for a service learning class at MU on Thursday, Feb. 23, 2017. SUZETTE WENGER | LNP Staff Photographer

A couple of months ago, Schirlyn Kamara stopped by the Nimble Thimble sewing shop in downtown Lancaster.

She runs NuLife, a social enterprise that teaches at-risk women to sew. They make items from recycled fabric — clothing, accessories and household goods — to sell online.

Kamara thought Nimble Thimble might have some leftover fabric or other supplies to donate. While there, she got to talking with Mort Nierenberg, who runs the shop at Central Market Mall with his wife, Ruth. The couple are in their late 80s.

“He jangled his keys at me … and said, ‘I think I’ve been waiting for you,’ ” Kamara recalled.

Sometime this spring, Kamara plans to move NuLife into Nimble Thimble’s location on the lower level of the mall at 45 N. Queen St.

The details are still being worked out, but NuLife is planning to have classroom and retail space there. Nierenberg, an expert sewing machine repairman, plans to continue doing repair work there while passing on his skills to a new generation.

He said the prospect of handing off the shop space to NuLife makes him “joyous.”

The Nierenbergs have owned and operated Nimble Thimble for about a half-century. They moved it into the mall when they bought the building in 1978, according to newspaper records. They subsequently sold the property, but remained as tenants.

“It’s a huge project,” said Howard Jones, a board member of Handz on Hope, the nonprofit organized by Kamara that is NuLife’s parent organization.

MU assisting

Ruth Nierenberg, seated, who owned Nimble Thimble for over forty years, watches as Millersville University students Juan Martinez and Courtney Lynn help to remodel/repurpose the store for a service learning class.
SUZETTE WENGER | LNP Staff Photographer

Kamara has plenty of help, thanks to two Millersville University professors and their students.

About 25 undergraduates in professor Minoo Ghoreishi’s service learning seminar have been visiting Nimble Thimble weekly this semester to take inventory and clean out decades of clutter.

Later on, the students will design and set up displays, create signage and complete other tasks. Last semester, they taught basic business classes to NuLife clients, and that will continue, Ghoreishi said.

Meanwhile, more than 65 students in classes taught by professor Lexi Hutto have been creating brochures, videos and a social media campaign for NuLife.

Future projects include a marketing plan, merchandising and fundraising. Hutto said she is seeking donations of displays and other supplies.

The two professors’ classes are independent of each other, though some students have been in both, including senior Juan Martinez.

The seminar, he said, “teaches us to teach other people,” as well as to identify community needs and take action.

“A lot of people who go to Millersville (University) plan on owning their own business,” senior Courtney Lynn said. The seminar gives students a realistic feel for what’s involved, she said, likening it to an apprenticeship.

Senior seminars are required in a number of MU majors; service learning is one of the options for business majors.

“We want students to be community oriented,” Ghoreishi said. “We really emphasize the ethical angle.”

Helping nonprofits

Adam Good hands off a sewing book to Jordan Johnson, both Millersville University students who are helping to remodel/repurpose the Nimble Thimble for a service learning class.
SUZETTE WENGNER | LNP Staff Photographer

Each year, participants enter a national competition sponsored by Enactus, a nonprofit devoted to using entrepreneurship to promote social welfare. MU has won the regional championship five times since 1998, Ghoreishi said.

Hutto and Ghoreishi have worked with other nonprofits. Students get hands-on experience, and cash-strapped organizations get assistance they could not otherwise obtain.

When students work for a real-life client, “I think they take it more seriously,” Hutto said. “It takes a lot more effort, but I think the rewards are worth it.”

Kamara said it’s been her dream to have a shop to sell NuLife goods.

Besides a retail area in the front room, there’s a workshop, a storage room, a back room where the classroom will be, and even a small kitchen: about 4,000 square feet in all.

A 2015 participant in the Great Social Enterprise Pitch, a project of ASSETS and the Lancaster County Community Foundation, Kamara has received donations through crowdfunding and from the foundation, and is seeking additional support.

“We’ve got a lot to do,” she said.

Small Change. Big Difference.

ASSETS is the #GiveLocal recipient of March and April 2017!


Launched in 2017, Lemon Street Market’s #GiveLocal project is a register round up initiative designed to support Lancaster organizations whose missions align with ours.

Customers can elect to “round up” their purchases to the nearest dollar when they check out, with proceeds donated to the featured organization for that month. Customers can also choose to increase their at-the-register donation by adding to their round up value. By shopping at Lemon Street Market, customers are directly supporting more than 75 local farmers and vendors, and even more through local distributors like Lancaster Farm Fresh, Oasis, and Four Seasons. For each dollar spent at a local, family-owned business, 80% is put back into the local economy. For every dollar spent at large, corporate owned stores, only 20% makes it back into the local economy.

Help us to contribute even more to our community by choosing to #GiveLocal when you check out at Lemon Street Market.

Harvest Moon Bagel Co.: Philly-Style Bagels brought to Lancaster

Chelsea Zawisa has always worked in the food industry. “At times I wondered if I should get a job outside of the food industry, but saw no reason to, I love food.”

In High School, Chelsea worked in various restaurants and bakeries, building a passion for her own cooking. In 2011, she went to YTI for their pastry arts program and began to master baking. Once finished, she worked at bakeries and cafes, including Commonwealth on Queen. During this time, she began to think about owning her own business. “I feel like everyone in the restaurant industry wants to own their own business.” After planning and some research, Happy Belly Bakery was created in 2014.

However, the bakery was only a part-time business and Chelsea would only sell baked goods at the Lancaster East Side Market. An idea began to form inside her mind. For months, Chelsea had visited Philadelphia and saw the success a particular kind of bakery was having: bagel shops. “When we were in Philadelphia, I would walk into every bagel shop I could find and talk with the owners if I could.” After months of research and support from family and friends, Chelsea began planning the transition of her business to solely selling bagels and condiments with a focus on buying fresh, quality ingredients from the Lancaster community. The name would also be changed to the Harvest Moon Bagel Co.

While preparing for this transition, Chelsea knew the ASSETS Learning Circles was a perfect fit for her. While having a great deal of experience within the food industry, she still had only a smattering of experience and knowledge about owning a business. When the first Learning Circles was available, she immediately signed up. She was put into contact with professionals who had real experience and helped her immensely with multiple areas like marketing, the city’s laws, basic accounting, etc. Chelsea found ASSETS itself to be incredibly open and friendly. “I don’t think there is anything like this in many places.”

The owners of Commonwealth on Queen also helped her in starting her business by allowing her to use their oven to bake bagels and also help make the logo for her business. With the support of friends, family, ASSETS and Commonwealth, Chelsea finally officially opened the Harvest Moon Bagel Co. on Sunday, June 26th, 2016.

In the future, Chelsea wants to continue perfecting her bagels and experimenting with different flavors for her butter and cream cheese. She wants to have her own storefront in downtown Lancaster and also have the best bagels in the county while also providing a friendly, community-oriented atmosphere. 

 

Meredith Jorgensen: From Journalist to Entrepreneur

Meredith has, by many journalists standards, had a successful career. After attending Ithaca College, Meredith would land a job with WGAL News 8 in 2003 and has been there ever since. The creation of Life & Legacies, one of her proudest accomplishments, would emerge from one of the most tragic events in her life. The news that her Grandfather and Grandmother were both diagnosed with two different kinds of lung cancer rocked the family.

Meredith, along with her father, raced to Florida with a camera and she asked every question she could think of. “I was afraid that they were going to die and I wasn’t going to know everything I wanted to know.” For two hours, Meredith would learn about her grandparents lives and would have their stories forever. Four months later, her grandmother passed away.

Relieved that she could save their story, Meredith began forming an idea with her good friend Joe Mitton, a cameraman at WGAL. Meredith and Joe wanted to create a business centered around recording the stories of others, helping  their customers create a legacy for friends and family. For seven years, their dream would be just that, a dream. It may have continued to be a dream if Meredith had not learned about the Great Social Enterprise Pitch from WGAL.

Realizing that she and Joe had a great idea for the Pitch, they attended one of the Learning Circles in preparation. Meredith says it was perfect for them. While they had the skills and ability to create their product, Meredith and Joe learned the details of how to run a business through the Learning Circles and the Pitch. “ASSETS was so great about the real nitty-gritty of being a business owner. What is your financial model, how can you make this a viable business? We were able to figure out all of this stuff out at the meetings for the Pitch.”

With a real business plan in place, they were blown away by the support shown by the community when the Pitch began the crowdfunding phase. While Meredith and Joe set the bar at 1,000 dollars, community members in Lancaster donated over 5,000 dollars.

With this money and their own capital, Meredith and Joe opened the doors to Life & Legacies in November 2015. “In seven years, we had done nothing with a great idea. In six months, we took that idea and went from 0 to 60 and finished the Pitch with a fully-formed business.” While running a business is challenging, Life & Legacies is growing faster than they had ever expected. Meredith knew that the business would take a great deal of work to maintain, but she didn’t realize how much it really took until the business was actually started. However, Meredith has loved the challenge and her passion for hearing more stories is what keeps her going. “I just want to interview more people, there’s more stories to tell! The greatest part of my business, is I get to hear all the stories.

Meredith takes great pride in creating the business. “I am a cancer survivor, a wife, a television journalist. And still, opening this business is one of my greatest accomplishments.” For anyone who has a dream or idea, she says “it is very scary, you have to push past the fear, have faith, and be as prepared as possible.” In the end, however, you’re going to have to make a leap of faith.