Nurturing businesses, one tenant at a time
An abandoned historic building in downtown McCook has become a thriving business center, currently housing 19 businesses (including 10 start-ups) and about 25 employees in this rural southwestern Nebraska community.
The Keystone Business Center fulfills a critical piece of rural economic development, said Rex Nelson, executive director of the McCook Economic Development Corporation.
“There’s a presupposition out there that the primary means of economic development is recruiting outside businesses,” Nelson said. “And, in rural communities, that does not hold true. Nationwide, if you look at the data, that has not been a successful strategy for rural America.”
Most jobs come from expansions and new business creation, he said.
“In small communities, one of the things we need to do is help our entrepreneurs succeed and grow into businesses that succeed and grow jobs and help expand the tax base,” Nelson said
The Keystone Business Center, 402 Norris Ave., is filling that role in McCook.
A solution for many problems
The center became a reality five years ago after Nelson said it was seen as a solution for several problems: a local computer software company was seeking a place for an expansion, Nelson was considering starting a local business incubator, and the abandoned former Keystone Hotel was making the downtown unattractive.
“Here’s a historic structure in downtown that was deteriorating and becoming an eyesore,” Nelson said. “We really saw that as an opportunity to meet multiple objectives in the community.”
A plan was created to renovate the building into a place for start-up businesses and to house the expanding software company. The federal Economic Development Association offered to fund a $100,000 feasibility study complete with architectural plans for the renovation and then offered a 50 percent match to any local funds applied to the renovation.
Nelson said the entire renovation cost $4.2 million with half of the funds coming from the EDA, approximately a quarter of the funds coming from local-option LB840 sales tax money and another quarter borrowed from local banks and repaid with income generated from the completed project.
The Keystone Business Center opened in September 2010 and has been mostly filled since that time with retail and service businesses.
Low rents attract young businesses
Keystone offers a tiered rental contract, charging businesses a below market rate rent the first year, market rate the second year and then slightly above market rate the third year and beyond. Other businesses who are not start-ups also rent space at Keystone and are charged a higher rate.
Nancy Collins started Keystone Floral in the building in January 2014 after another floral shop in town closed.
For her, the nostalgia associated with the Keystone building and the low start-up costs persuaded her to make the jump to entrepreneurship. Her grandparents and mother both once worked at the Keystone Hotel. And, Collins began her working career in the coffee shop that once existed in the same Keystone room where her floral shop now serves customers.
Keystone rent is based on square footage, she said, and her start-up space consisted of a small reception desk in the center’s lobby.
“When your rent isn’t any more than your power bill, it makes a difference,” Collins said.
Growing up and out
Because of the low start-up costs, she started Keystone Floral without a loan, using a credit card for her first orders of fresh flowers and plants. Her business slowly expanded over the first two years, and she has now moved to a bigger space in a front room of the center that gives her a street-side display window.
Her business has expanded and now includes unique gifts, jewelry, cards and special event rentals, such as candelabra and punch bowls. She employs one other full-time staff person besides herself and a part-time employee.
Now that Collins has moved to a larger space in the building, it opened up a spot for Jane Geilenkirchen, who started a scrapbook store, Eyelets & More, at the reception desk.
Nelson said there is nearly constant movement among the tenants in the building as they grow and need more space. The Sew Blessed quilt store on the second floor was recently planning to move to a larger space in the dining room on first floor. Business space is available on four floors of the building.
“It seems like everyone has grown, which is exactly what this building is intended to do,” Tidyman said.
Tidyman started his architect and engineering firm from his home in Curtis and then moved to the Keystone shortly after it opened in 2010.
He enjoys the access he has to other building tenants, such as the MEDC, the Nebraska Business Development Center and REAP (Rural Enterprise Assistance Project), which has office hours at Keystone monthly.
“Working with other people and being away from the distractions of the house is huge for me,” he said.
“For me, working at home at my kitchen table was just awful,” she said. “I absolutely love being here. You start creating energy, and people are coming in. It’s just been fun.”
She said the Keystone office gives her a professional image and allows her to be part of the business community by being downtown.
Both Reiner and Tidyman said the tiered system of rental costs was helpful in starting their businesses.
Nelson said the Keystone Business Center isn’t a true “business incubator” because he doesn’t have the staff and resources to offer consistent business planning services. However, he does meet with start-up businesses as needed, and they have access to the other resources in the building.
While the initial software company that spurred the Keystone project went out of business, the center has helped many others get started.
A few Keystone start-ups have already moved on to other locations, including Larisa O’Brien Photography and New Frontier Ag.
“It’s been pretty effective I feel,” Nelson said. “Just watching small businesses get their feet on the ground and develop expertise and confidence.”
Nelson said they are considering renovating the building’s top two floors into downtown housing.
For more information…
Rex Nelson, McCook Economic Development Corporation
402 Norris Ave., Suite 301
McCook, NE 69001
For a listing of Current Keystone Businesses, click here.