The Deal Maker
By leveraging his contacts, his knowledge of the nitty-gritty details of business creation, and his ebullient nature, Don Monroe has helped small businesses bring an East Toledo neighborhood back to life
Supporter of Entrepreneurship:
Don Monroe, River East
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You never find a guy this good still working at nonprofit wages," says Tom Bowlus. The guy in question is Don Monroe, who's created a small-business support network among Toledo's banks, city government, a local university, and the businesses themselves. As director of the nonprofit River East Economic Revitalization Corp., Monroe impressed the national Entrepreneur of the Year judges with his single-minded and almost single-handed development of East Toledo's small-business community. "He has a simple formula," says Bowlus, also a nonprofit manager in East Toledo. "He gets cheaper money, and he knows his resources."
For Monroe, it all started as basic urban renewal. In 1972 he and seven other small-business owners (Monroe was co-owner of a cleaning company until 1979) formed River East. Until Monroe took over the directorship, in 1979, the focus was property development. But Monroe was eager to bring business back to his old neighborhood, which had suffered from glass-industry cutbacks. In 1983 he talked the city into leasing River East an abandoned light-bulb factory (the Andrews building) for a dollar a year. Unable to afford renovations, he started begging for tenants.
The roof leaked. There was no parking. The 120,000-square-foot building had one door, one driveway, and two bathrooms. "I acted with total confidence, but I was terrified," Monroe says. Enter BEC Labs, a medical- and laboratory-equipment supplier, which was torn between the pastoral suburbs and cheap rent in the undeveloped building. When BEC chief executive Jim Kulla and Monroe started negotiations, Monroe leaned across the table and handed over an imaginary object. "What's that?" Kulla asked. "I'm giving you the kitchen sink," answered Monroe. "Now we just have to negotiate the size." BEC has been in the building ever since.
With offers of low rent, a common meeting space, and a copier, Monroe eventually persuaded 40 other small businesses to move into the three-story building. Most were service or manufacturing companies with fewer than five employees. Twelve of those companies have since either been acquired or moved to larger quarters, and only two have failed. Not only has rent stayed the same for 10 years, but Monroe has also squeezed profits out of the deal by decreasing overhead. Investments in roof insulation, smaller windows, and a more efficient heating system netted about $42,000 in savings over a 3-year period, which Monroe folded into his next plan.
Scraping together those savings and a hodgepodge of grants and loans, in 1986 Monroe invested in an abandoned building across the street, rescuing the historic Weber Block from the wrecking ball. With a decorator's eye and a plasterer's patience, Monroe, along with two maintenance workers, refinished woodwork, painted walls, and hung wallpaper, lining up volunteers when he could. Monroe paid for only one outsider.
Days after acquiring the property, Monroe started trolling for tenants and making deals. Encouraging a hesitant florist, he offered a corner space rent free for a year, bought her inventory, moved the equipment in, and helped make deliveries on holidays. Now, four years later, she's paid back the first year's rent, bought her inventory back from Monroe, and posted her highest sales to date. When a retailer who sells Windsurfers waffled over the rent, Monroe introduced him to a local kayak retailer. They pooled their resources and now share a shop.
"A lot of what I do is say, 'Here's potential; let's explore it.' It's going on guts," says Monroe. Former Toledo mayor Doug DeGood calls Monroe "the best manipulator of the system I've ever seen." With a staff of only two and at a salary of only $49,000 a year, Monroe navigates around small-business hazards, leading Toledo's small businesses to bankers, local politicians, and the community. He organizes antique-car shows to attract traffic, which fills the three free parking lots he built. Toledo-born and -raised, Monroe's a walking chamber of commerce brochure, constantly spouting public-relations blurbs about the area's attractions and livability.
"His vision is seeing Toledo as a community of small businesses," says Sonny Ariss, director of the Small Business and Entrepreneurship Institute at the University of Toledo (UT). Monroe targeted UT to help with his latest venture, a student-business incubator in the Weber building. "We're trying to stop the Toledo brain drain," he says.
The major difference between River East's newest incubator and others is that five of the six start-ups are run by University of Toledo graduates. To acquire office space, a business must be a start-up, have potential for rapid growth, and be able to create jobs. The owner -- a current student, a graduate, or a resident of East Toledo -- must join the Association of Collegiate Entrepreneurs, complete an approved business plan, and take Ariss's class at UT.
Success hinges on the business plan, Monroe believes. "I demand that business owners make that commitment," he says. "Banks require it, and the owner learns a lot about the business."
What has persuaded companies like BEC Labs to settle in East Toledo is Monroe's tireless support. "He's like a marketing arm," says Kulla. "He sends people to see me. He came and told me about a tax-abatement program -- when you're in the heat of battle, you forget about things like that." UT graduate Christopher Walker, who started his College Prospects of America franchise in the Weber building, leans on Monroe for moral support. "Running a business is lonely, and Don understands the problems you're facing."
He not only understands, but acts, pouncing on any opportunity for River East or one of its tenants. Leading groups through the buildings, he details each business's operations, fishing for deals. "This guy really needs a partner who's good with numbers," he'll say. Or "We've got a woman with a new typing service in the building; she's really fast."
The business owners themselves have adopted Monroe's cheerful networking style, asking one another questions and freely giving advice. Since River East began renting its three buildings, about 40 other businesses have opened nearby, creating a seven-block shopping area. The companies have formed an East Toledo business coalition that lobbies the local government and this year organized a profitable street fair that attracted more than 5,000 people.
As Monroe's influence has spread, he's changed Toledo's attitude toward small business. His banker, Stephen Snead, assistant vice-president of Huntington Bank, follows Monroe through the red tape of government and city funding programs. "The easy way out is to use conventional financing," says Snead. "But Don has educated us, and because of Don's encouragement, I'm looking for other businesses to take advantage of this type of funding."
Four years ago Huntington National's Toledo branch made no Small Business Administration loans. Now it is one of the largest SBA lenders in northwestern Ohio. At Monroe's urging, it has joined with four other area banks and the City of Toledo to form the Neighborhood Economic Development Loan Pool to finance community-based start-ups.
Recently, Jim Kulla turned to Monroe to finance a nearby building for BEC's expanding operations, which Kulla will eventually purchase from River East. If that works out, says Monroe, "maybe there's a role for us in helping the start-ups that outgrow our space to relocate." While the BEC building was being renovated, Monroe rented part of it to a company that needed more manufacturing capacity for a short-term project. "What I learned," says Monroe, "is we need flexible space in Toledo for companies that form for one project and then disband." He also hopes to step up education programs. Even he doesn't know what he'll do next. "There's no formula," he says. "The formula says, Be flexible."* * *
BY THE NUMBERS
For the past 14 years, Don Monroe has been coaxing businesses to East Toledo through the River East Economic Revitalization Corp. Here's how the statistics stack up.
Number of companies
Moved to larger space or acquired 12
Friedman building fully occupied
Andrews building more than 80% rented
Weber Block more than 90% rented
Retail space two-thirds the city average
Remaining space half the city average
Business Tenant Revenues, 1992
Combined buildings $14 million
BEC Labs $10 million
Combined buildings 300
Seven-block River East area 2,000