Editor’s note: This is the third of a multi-part series reported by Jason Parker exclusively for WRAL TechWire about how the Triangle region’s startup and entrepreneurial ecosystem is adapting to the “new normal” in the wake of the COVID-19 pandemic.
HOLLY SPRINGS – Datelines reflect the preponderance of entrepreneurial news that comes from Raleigh, Cary, Durham, Chapel Hill and the Research Triangle itself. But suburban areas are generating plenty of buzz, too, even as startup hubs and emerging companies make adjustments for a new business climate due to fallout from the COVID-19 pandemic.
Here’s a look at what’s happening.
Holly Springs still blossoms
“Our businesses are bombarded with a lot of information,” said Anna Johnston, a spokesperson for the Town of Holly Springs Economic Development Department. “We created this tool to hopefully take the burden of research off of their plates.”
The Town of Holly Springs updates its COVID-19 Business Resources webpage daily, said Johnston, vetting each program and resource prior to publication.
The Town also contributed, through the approval of the Town Council, $15,000 to the Holly Springs Chamber Foundation Angel Fund, which is available to Chamber members and non-members, said Johnston, with the next round of grants announced today.
In addition, businesses and startups located in Holly Springs can apply for low-interest loans through the new #WakeForward small business relief program, after the Wake County Board of Commissioners voted to make a total of $5 million available with $1 million allocated specifically for sole proprietors, up to $50,000 per business.
“At the outset of the pandemic, we quickly pivoted to supporting small business, existing industry, and rapid response.” said Michael Haley, Executive Director, Wake County Economic Development (WCED) and a Senior Vice President of the Raleigh Chamber. “It will take time to recover, but we should seek solace in the strength of our regional economy to rebound.”
WCED itself provides businesses with an updated, evolving list of resources through its webpage, and supports the 12 municipalities, including Holly Springs, that compose the region.
Business owners are feeling a sense of uncertainty, said Ashley Thompson, Community Manager of the Coworking Station in Holly Springs, which closed to the public in March and April and is now operating at a limited capacity and additional procedures in place during Phase 2. “We have really tried to be proactive in thinking through concerns of those coming in to use the workspace,” said Thompson. (Coworking Station also operates a location in Apex.)
“There’s no denying that COVID-19 has had a negative economic effect on the coworking industry,” said Thompson. “Membership revenue has taken a hit as have opportunities to earn additional revenue through conference room rentals and events.”
But Thompson still believes coworking facilities will provide significant value, and noted that almost all of their current members continued to pay their dues, even when the facility was closed. “It will be interesting to see what the mid-term brings,” said Thomspon. “When people are uncertain, they tend to put things on hold and wait to see how things are going to work out.”
Johnston told WRAL Tech Wire that entrepreneurs aren’t always eligible for federal or state funding. “They need money,” said Johnston.
Some businesses pivoted, such as ASI Signage Innovations in Holly Springs, which typically manufactures architectural signs, and is now manufacturing personal protective equipment (PPE). Others are still navigating programs like the Economic Injury Disaster Loan (EIDL) program or the Payroll Protection Act, or are unclear whether they would qualify, said Johnston.
So is work-from-home really the wave of the future, and what’s the future of coworking in the suburban and exurban counties of the Triangle?
How Rolesville is adapting
“Most of the small business owners in my town are concerned with how their landlords are going to work with them in the coming weeks,” said Michelle Medley, Town of Rolesville Mayor Pro Tem, who owns the Arise Coworking Community & Event Space and is a licensed real estate broker. “Many people still have not received PPP money and those who have are now having to calculate what that additional loan payment will mean in terms of rebuilding their business to where it was before.”
Commercial business is relatively slow in the Town of Rolesville, said Medley, which she described as surrounded by commercially busy cities like Wake Forest, Knightdale, and Raleigh. “It’s not uncommon for town residents to bypass your business and go to either of these surrounding towns.”
There have been a lot of new businesses formed in Rolesville in recent years, said Medley. The Town partnered to initiate Launch Rolesville, with the aim of spurring new business formation through mentoring and microgrants of up to $10,000, and Medley participated to launch Arise in March of 2019.
Medley closed the Arise facility during the stay-at-home period, and recently reopened her private office rentals, flexible space, and designated desks, though she’s implemented safety precautions and reduced the maximum occupancy to comply with social distancing requirements. “My event space,” said Medley, “has taken a huge hit.” This was a profit center for her business, and prior to the spread of the novel coronavirus, all bookable event space had been reserved from April through the end of June. Now, all of those events were canceled or postponed to a future date which is still unknown, said Medley, and the business did not generate revenue from those rentals since Executive Order 121 was issued.
It’s not all bad news for Medley. While inquiries from freelancers or sole proprietors have decreased, interest in private office space has increased in the last two weeks, with interest from members of larger companies looking for a telework location.
“While I cannot project with any accuracy what coworking will look like,” said Medley, “I do believe, based on the conversations I have had in the past couple of weeks, that more people will be looking for coworking space in which to work from.” And those people will likely need flexible lease terms, from single-day use to 90-day use, said Medley, as the phased reopening in North Carolina progresses and people wait to see what happens next with COVID-19.
Ready to Rock and Roll in Wake Forest
The Town of Wake Forest sits just northeast of Rolesville, and the majority of businesses in the town are located in Wake County. Among them is Hatch Coworking, which did not close for members who were current in March prior to the issuance of Executive Order 121, said Kathy Jackson, the community manager. The facility, just one of Wake Forest’s coworking spaces, did cancel all gatherings, meetings, and events, as well as stopped walk-in memberships, said Jackson.
“Unlike large coworking spaces, we cater to small businesses, self-employed, and those that might work with out of state companies,” said Jackson. The facility’s two conference rooms are regularly booked, including during the evenings for teachings and trainings that occur on-site, said Jackson, which aren’t occurring during the first two phases of North Carolina’s stay-at-home order.
The Wireless Research Center, also based in Wake Forest, transitioned much of their work to a remote setting, said Scott Yates, a spokesperson for the nonprofit organization. RIot and the Advanced Mobility Collective, who typically work from the WRC offices, also moved to remote-based work and meetings.
“We are still seeing healthy applications to the RIoT Accelerator,” said Tom Snyder, executive director of RIoT. “Which indicates there is still hunger to start a business.”
RIoT launched MISSION-R in response to the spread of the novel coronavirus. The program, which stands for “making innovation and startups succeed in our new reality,” aims to address critical challenges in public health and the economy in the aftermath of the spread of COVID-19. Six teams were announced on April 20, and the organization announced the teams on May 7. According to the organization’s website, teams will join the RIoT Accelerator Program now that the program has concluded.
“We are seeing market changes in fast-forward now,” said Snyder, “which creates huge opportunity for startups that can move fast.” There’s a disruption in all markets, said Snyder, though the economy never closed, it did fundamentally change for many individuals and companies.
And the coworking market is still in flux, particularly in the suburban and exurban areas of the Triangle. Take Hatch, for example. Initially, Hatch didn’t lose many members due to COVID-19, said Jackson, and membership held steady in March, April, and May.
“We are actually seeing more of a difference now in June with the loss of members,” said Jackson, and many of the members who are self-employed have chosen to move back into their home offices due to their own struggles in operating their businesses.
Despite this, Jackson is bullish on the future of work.
“Even though we are slower than normal,” said Jackson, “coworking will be the way of the future even more.” The team is opening the Hatch64 coworking space in Knightdale, located on Knightdale Boulevard, also known as Highway 64 East, which Jackson will lead.
According to Jackson, the new facility will include private offices, coworking spaces, conference rooms, event and training space, and a podcast studio.
“We are ready to rock and roll again,” said Jackson.