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Think of it as America’s Got Talent – or Retail Talent, at least. With national chains cutting back on expansion, a few retail real estate managers are looking to find and encourage entrepreneurs, holding contests to choose the retailers of tomorrow.

Just ask Ben Wanzo, who will open his first TeachBar café/school at Bayfair Center in San Leandro, CA, the result of Madison Marquette’s Retail*Star contest. TeachBar will offer affordable educational seminars for the community in a 1,300-squarefoot mixed retail environment, coined a learning café. Quick-serve dishes, tea and some coffee will be served on one end, with a classroom offering various subjects to both high-school students and adults, taught by coaches and local teachers.

“From 3 pm to 6 pm every day it will be very high-school-oriented, focusing on English, math, maybe an SAT prep class,” Wanzo said. “On weekends, it might be personal finance or software classes.”

Wanzo was selected from a group of more than 60 concepts whittled down over a five-month period, and will receive $25,000 in start-up costs, a complete store buildout and a year of free rent.

The contest arose from a December 2008 “think-tank” meeting held at Madison Marquette’s regional office. Knowing a recession would cut into sales and possibly occupancy, the team was looking for ways to keep its numbers above the national average. The 850,000-sf center is 93% leased.

“There was a great article in the New York Times about how recessions foster entrepreneurship,” recalled Whitney Livingston, a regional marketing director for Madison Marquette, Bayfair Center’s owner/manager. “We said, ‘Why not cross it with a reality show?’”

The mall teamed with SCORE, a subsidiary of the Small Business Administration to create a program that not only would find promising entrepreneurs but also help prepare them for the realities of operating a retail business. The mall advertised the contest in local theaters and via social media such as Twitter and Facebook.

“I found out about the contest by browsing the Oakland Tribune,” said Wanzo, a former teacher. “I was developing a website to connect people and teachers. I’d wanted to be come an entrepreneur.”

He wasn’t alone. The mall fielded 85 ideas at the first orientation, of which 66 budding retailers visited the center and made a three-minute pitch to a team of judges selected by Madison Marquette – in full view of the mall’s center court. The judges included local business development officials, the Chamber of Commerce president, the San Leandro City Council president and a former vice president of Mervyn’s.

The group narrowed the field to 15 finalists, with concepts ranging from cupcake shops to cosmetics stores for women of color, to who then had to create a formal business plan, with the team’s help.

“We provided seminars throughout,” Livingston said. “We didn’t expect people to know how to create a knockout business plan.”

“I had to learn a lot,” Wanzo said. “I’d never been in retail before. How do you run a coffee shop? How do you run an education center? How do you blend them? They provided weekend seminars and access to experts.”

When the plans were complete, the contestants made a 15-minute presentation to the judges, who questioned their plans. Again, the entire process was conducted as a show in the mall’s center court. This process narrowed the field to four finalists, who then created detailed business and marketing plans in preparation for their last, 30-minute presentation to the judges and a growing mall audience.

“It was fun, but it was nerve-wracking,” Wanzo said. “To pitch it to the judges is one thing, but to an audience was really nerve-wracking. But it also provided encouragement.”

The ingenuity the contestants displayed was deeply gratifying, Livingston said. One contestant built a 10-foot by 4-foot miniature store layout; another recruited the San Francisco Art Academy to design her store and logos.

“The entrepreneurs talked about their business as a living, breathing entity, one already in business,” Livingston said. “It was very cool to see that mentality.”

What put TeachBar over the top was its connection to the community.

“This center is a community place, and Ben got that,” Livingston said. “He has a charisma. He’s as important as the concept was.”

TeachBar will open in San Leandro in November. Some of the other contestants may also see their dreams become reality, Livingston said. Madison Marquette has negotiated a temporary deal with one semifinalist, is negotiating with another, and is assisting others. The center also has helped connect some of the entrepreneurs with possible financing sources. Wanzo noted that he was seeking additional capital.

Madison Marquette’s contest was something of a pre-emptive strike to keep occupancy up. Downtown Tempe, AZ’s Mill Avenue retail competition was created to solve a problem, said Nancy Hormann, executive director of the Downtown Tempe Community. The collapse of the housing market in metro Phoenix left the Centerpoint on Mill development, a cluster of three blocks of high-rise condos, with empty ground-floor retail in what had been a shopping core near the University of Arizona.

“With the retail one-third empty, the perception was that we were decaying, which wasn’t true,” said Hormann, a former shopping center general manager. She approached DMB Associates, Centerpoint on Mill’s developer, to fill a space via a contest. The best concept will receive a free year’s rent (but must pay CAM charges) on a three-year lease.

The entrepreneurs had some very specific requirements: no franchises, nothing that already existed in the area, no national tenants, and an idea that would appeal to both the student population and the residents. The contest received 22 viable applications, which were reviewed by a judging team including Hormann, a DMB principal, a local retail broker, an attorney, the city’s head of economic development and a banker.

“We picked five to make a presentation, and of that five we had a tough time culling them down to the top three,” Hormann said. The city has yet to announce the winner, as negotiations are ongoing. And the other two finalists also will receive leases at reduced, though not free, rent. The winner likely then will open about three months after the announcement.

The publicity surrounding the contest also piqued leasing activity for the remaining space, she reports.

“We have LOIs on 75% of our space,” she said. “And what came out is a great retail plan for Downtown Tempe.”

With space filling up, Tempe has no need to repeat the contest. Madison Marquette, on the other hand, plans to hold the Retail*Star contest annually, though Livingston is still figuring out whether it can be conducted at more than one center at a time.

Wanzo just wants to get his Bayfair Center space open – and then a few more.

“My dream is to open multiple businesses,” he said. “TeachBar is something you can fit into most communities, most urban communities. Though I don’t think I’ll be as ubiquitous as Starbucks.”

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